Contractors will have more forms to fill out, and possibly some explaining to do, when the recently issued Executive Order on Fair Pay and Safe Workplaces is fully implemented in 2016. The Executive Order requires offerors to disclose whether they have been found to have violated, within the past 3 years, any of 14 different labor laws.
Covered laws include: Fair Labor Standards Act, Occupation Safety and Health Act, Davis Bacon Act, Service Contract Act, Americans with Disabilities Act, and a host of others. Violations of equivalent state laws must also be reported.
An offeror with violations will be provided an opportunity to disclose steps it has taken to correct the violations or improve compliance. The procuring contractor officer will take this into account in determining the offeror’s responsibility. The contractor will need to update its disclosure every six months.
Agencies are also required to ensure that contractors (and their subcontractors) provide their employees with “paycheck transparency,” providing a document to each employee that shows the hours worked, overtime hours, pay, and any additions or deductions made. Contractors must also state in writing if an individual is considered an independent contractor and not an employee.
These requirements apply to contracts and subcontracts valued at $500,000 or more. GSA is charged with developing a single website for contractors to use in meeting these new reporting requirements.
For contracts (and subcontracts) valued at $1 million or more, contractors may not require that their employees arbitrate claims relating to Civil Rights violations, sexual assault, or harassment. (Once such a claim has arisen, the parties can mutually agree to arbitrate the claim.) This restriction, however, does not apply to employees who are covered by a Collective Bargaining Agreement.
The Executive Order is effective now, but the reporting requirement is not expected to begin until 2016, after the development of FAR regulations and clauses. Since the disclosure form has a 3-year look back period, violations that occurred in 2013 would be subject to the reporting requirement.
Contractors need only report adjudicated labor law violations: a civil judgment, arbitral award, or administrative merits determination that the contractor violated a covered labor law. Settlements of alleged labor law violations are not reported. The Executive Order thus places further pressure on contractors to settle such claims rather than risk a reportable violation.