CPR Submits Comments on Labor Department Guidance for Ensuring Federal Contractors are Complying with Labor Laws

Every year, the federal government awards private firms billions of dollars in federal contracts. The contracts are supposed to go to “responsible” companies, but that isn’t always the case. According to the Government Accountability Office, between 2005 and 2009, the Department of Labor’s Wage and Hour Division issued 25 of its 50 largest fines against 20 federal contractors who later received over $9 billion in contracts in 2009. Over the same period, the Occupational Safety and Health Administration issued 8 of its top 50 fines against 7 federal contractors who went on to receive almost $180 million in contracts in 2009.

In an effort to improve the contracting process, on July 31, 2014, President Barack Obama issued Executive Order (E.O.) 13673 on “Fair Pay and Safe Workplaces.” Earlier this year, on May 28, the Department of Labor published its proposed guidance on implementing the E.O. in the Federal Register and opened the docket for public comments. And over the past few weeks, I’ve worked with allies from George Washington University, Nebraska Appleseed, Oxfam America, and the Southern Poverty Law Center to prepare comments and recommendations on the guidance for the Labor Department.

The E.O. seeks to improve the federal contracting process by requiring federal contractors and subcontractors to disclose violations of 14 federal labor laws and their equivalent state laws from the previous three years and then provide semi-annual updates. The order also enhances paycheck transparency by requiring contractors and subcontractors to provide workers with information about how their wages are calculated and to notify workers if they’re classified as “independent contractors” rather than employees.

Our comments express support for these new requirements; however, we also offer the Labor Department several recommendations that would strengthen the guidance and go much further toward stopping the flow of federal dollars to companies that flout our nation’s labor laws.

The guidance could take a tougher stance against awarding contracts to firms with violations involving a worker’s death or serious injury (an amputation or other permanent disability, for example) over the past three years. These types of egregious violations should be disqualifying, and federal contracting officers should be instructed that firms with a history of such violations should be excluded from the bidding process. If such a firm is already performing on a contract, the contracting officer should terminate the contract or refer the firm to the agency’s suspension and debarment official. As our letter states, “In no instance should the federal contractor be permitted to perform on an existing contract or be awarded a new contract while the underlying conduct that constituted the violations remains unabated.”

Among other recommendations, our comments urge the Labor Department to require disclosure of meritorious whistleblower complaints, to verify information reported by contractors, to explicitly state the sanction for false reporting of violations, and to elaborate on the public’s role in monitoring federal contractors’ compliance with labor laws. We believe our recommendations would better serve the E.O.’s objectives, which are: to achieve more efficient contract performance, to assist contractors with complying with labor laws, and to level the playing field for companies that wish to do right by their workers.

Click here to read the complete letter.