Companies that bid for federal government contracts must start disclosing any past labor law violations, under new regulations established by the Obama administration.
The Department of Labor and the Federal Acquisition Regulatory Council announced the “Fair Pay Safe Workplaces” final rule and guidance Wednesday. The Labor Department said the rule benefits responsible contractors who abide by existing labor laws. Secretary of Labor Tom Perez said that, “Contracting with the government is a privilege, not an entitlement; and we want to make sure that the companies enjoying that privilege comply with our nation’s laws and the values that underpin them.”
The final rule and guidance is part of a series of rules that President Barack Obama directed the Labor Department to issue in order to carry out his “Fair Pay and Safe Workplaces” executive order signed in 2014. The Obama executive order purports to “promote economy and efficiency in procurement by contracting with responsible sources who comply with labor laws.”
The federal government is the largest purchaser of goods and services in the world, and the law will affect everyone from giant, billion-dollar companies like Aramark, down to smaller contractors and firms across the country.
The rule was blasted by employers, who asserted that it would result in fewer qualified bids for federal contracts. The Associated Builders and Contractors told The Wall Street Journal the rules, “will result in needless delays and litigation, crippling the contract award process.”
Three House Republican lawmakers with the Committee on Education and the Workforce criticized the rule, saying that, “unfortunately, this administration would rather spend time and resources creating new layers of bureaucracy instead of using its existing authority to enforce current protections.” Chairman John Kline of Minnesota, along with Reps. Tim Walberg of Michigan and Phil Roe of Tennessee, went on to say that, “This redundant, unnecessary, and unworkable regulatory scheme isn’t about protecting the rights of workers. It’s about growing government and promoting a culture of union favoritism.”
The rules will be phased in starting Oct. 25, and eventually companies will have to disclose violations that have occurred for the three years leading up to the bid placement. The disclosures will include failures to pay for overtime work, hiring discrimination and collective bargaining violations.
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