Obama to sign executive order requiring companies to fess up bad behavior

The White House in Washington, D.C.
The White House in Washington, D.C. McClatchy

President Obama today signed an executive order aimed at requiring prospective federal contractors to disclose labor law violations.

The “Fair Pay and Safe Workplace” measure will also give federal agencies more guidance on how to consider labor violations when awarding federal contracts and “ensure that all hardworking Americans get the fair pay and safe workplaces they deserve,” the White House says.

White House officials say federal agencies currently don’t have a formal way to get a sense of whether a contractor has a history of poor performance such as wage theft or discrimination. Indeed, they noted that a recent government survey found that 50 percent of companies with such records continued to get future contracts.

White House officials said the act isn’t aimed at rooting at companies with a single offense, but rather those who have displayed a pattern of violations or “particularly egregious” conduct. It will govern new federal procurement contracts valued at more than $500,000.

The actions come as part of Obama’s proclaimed “Year of Action” -- a series executive actions he’s taken this year to push past a gridlocked Congress in order to help struggling Americans. But for all his strong rhetoric, his actions this year are mostly minor, in line with previous presidents and within his scope. His most consequential actions took place well before 2014.

The action comes just a day after the House voted to proceed with a lawsuit that charges him with exceeding his presidential authority.

White House officials say that although the “vast majority” of federal contractors don’t break workplace laws, “every year tens of thousands of American workers are denied overtime wages, not hired or paid fairly because of their gender or age, or have their health and safety put at risk by corporations contracting with the federal government that cut corners.”

Workers’ groups hailed the move, with Change to Win, a campaign of low wage federal contract workers, saying it sends the message that “if you are breaking the law, you don’t get to do business with the biggest employer in the country -- the federal government.

“Just like the executive order raising the minimum wage had a ripple effect across the economy, we hope that this bold step by the president sends a clear signal to the private sector that you need to do right by your workers,” said Change to Win deputy director Joseph Geevarghese.

But the National Association of Manufacturers panned the move, saying it will create “significant problems” for businesses that want to provide goods and or services to the federal government.

“The order will require federal procurement officers to effectively act as enforcers of labor laws that even the Department of Labor itself has difficulty understanding, which is a dangerous game for our President to be playing with federal contracts,” said the group’s Vice President of Human Resources Policy, Joe Trauger. He warned that some businesses “may decide the additional hoops, hurdles and hassles just aren’t worth it anymore – particularly if they are a small to medium-sized business.”