Canterbury, Gooch, Surratt, Shapiro, Stein, Gaswirth & Jones

President Obama’s Latest Executive Order Relating to Federal Contractors

On July 31, 2014, President Obama issued the Fair Pay and Safe Workplaces Executive Order. The Executive Order states that it is, in part, a reaction to studies showing that many federal contracts are let to contractors with major labor law violations. Major provisions of the Executive Order include the following:

The Executive Order requires that prospective prime contractors disclose violations of any of 14 federal statutes and executive orders, as well as state laws. This disclosure requirement applies to federal contracts exceeding $500,000, and will begin in 2016. The Executive Order also requires that subcontractors make similar disclosures if the subcontract is worth over $500,000.

The Executive Order also requires the contractor to disclose hours and pay for each non-exempt employee under the Fair Labor Standards Act, the Davis-Bacon Act, the Service Contract Act, and similar state laws.

Further, the Executive Order will now allow arbitration of employment disputes only after the employee’s voluntary consent is given after a dispute occurs.

Although the new requirements will certainly affect federal contractors, it does not cover federally assisted contracts. Even so, commentators have stated that this latest Executive Order is by far the most far reaching and burdensome that the President has issued, relating to federal contracts.