FACT SHEET: Fair Pay and Safe Workplaces Executive Order

Courtesy of  www.whitehouse.gov

The White House
Office of the Press Secretary

While the vast majority of federal contractors play by the rules, 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.  Taxpayer dollars should not reward corporations that break the law, so today President Obama is cracking down on federal contractors who put workers’ safety and hard-earned pay at risk.

As part of this Year of Action, the President will sign an Executive Order that will require prospective federal contractors to disclose labor law violations and will give agencies more guidance on how to consider labor violations when awarding federal contracts.  Although many contractors already play by the rules, and federal contracting offers already must assess a contractor’s record of integrity, these officers still may not necessarily know about companies’ workplace violations. The new process is also structured to encourage companies to settle existing disputes, like paying back wages.  And finally, the Executive Order also ensures that workers are given the necessary information each pay period to verify the accuracy of their paycheck and workers who may have been sexually assaulted or had their civil rights violated get their day in court by putting an end to mandatory arbitration agreements at corporations with large federal contracts.

By cracking down on federal contractors who break the law, the President is helping ensure that all hardworking Americans get the fair pay and safe workplaces they deserve.

  Key Provisions of the Executive Order 

The Fair Pay and Safe Workplaces Executive Order will govern new federal procurement contracts valued at more than $500,000, providing information on companies’ compliance with federal labor laws for agencies.  We expect the Executive Order to be implemented on new contracts in stages, on a prioritized basis, during 2016.  The Department of Labor estimates that there are roughly 24,000 businesses with federal contracts, employing about 28 million workers.

1. Hold Corporations Accountable: Under the terms of the Executive Order, agencies will require prospective contractors to disclose labor law violations from the past three years before they can get a contract.  The 14 covered Federal statutes and equivalent state laws include those addressing wage and hour, safety and health, collective bargaining, family and medical leave, and civil rights protections.  Agencies will also require contractors to collect similar information from many of their subcontractors.

2. Crack Down on Repeat Violators: Contracting officers will take into account only the most egregious violations, and each agency will designate a senior official as a Labor Compliance Advisor to provide consistent guidance on whether contractors’ actions rise to the level of a lack of integrity or business ethics.  This advisor will support individual contracting officers in reviewing disclosures and consult with the Department of Labor.  The Executive Order will ensure that the worst actors, who repeatedly violate the rights of their workers and put them in danger, don’t get contracts and thus can’t delay important projects and waste taxpayer money.

3. Promote Efficient Federal Contracting: Federal agencies risk poor performance by awarding contracts to companies with a history of labor law violations.  In 2010, the Government Accountability Office issued a report finding that almost two-thirds of the 50 largest wage-and-hour violations and almost 40 percent of the 50 largest workplace health-and-safety penalties issued between FY 2005 and FY 2009 were at companies that went on to receive new government contracts.  Last year, Senate Health, Education, Labor, and Pensions Committee Chairman Tom Harkin issued a report revealing that dozens of contractors with significant health, safety, and wage and hour violations were continuing to be awarded federal contacts.  Another study detailed that 28 of the companies with the top workplace violations from FY 2005 to FY 2009 subsequently received federal contracts, and a quarter of those companies eventually had significant performance problems as well-suggesting a strong relationship between contractors with a history of labor law violations and those that cannot deliver adequate performance for the taxpayer dollars they receive.  Because the companies with workplace violations are more likely to encounter performance problems, today’s action will also improve the efficiency of federal contracting and result in greater returns on federal tax dollars.

4. Protect Responsible Contractors: The vast majority of federal contractors have clean records.  The Department of Labor estimates that the overwhelming majority of companies with federal contracts have no federal workplace violations in the past three years.  Contractors who invest in their workers’ safety and maintain a fair and equitable workplace shouldn’t have to compete with contractors who offer low-ball bids-based on savings from skirting the law-and then ultimately deliver poorer performance to taxpayers.  The Executive Order builds on the existing procurement system, so it will be familiar to contractors and will fit into established contracting practices. Responsible businesses will check a single box on a bid form indicating that they don’t have a history of labor law violations.  The Federal contracting community and other interested parties will be invited to participate in listening sessions with OMB, DOL, and senior White House officials to share views on how to ensure implementing policies and practices are both fair and effective.  DOL and other enforcement agencies along with the Federal Acquisition Regulatory Council will consider this input as they draft regulations and guidance, which will be published for public comment before being finalized.

5. Focus on Helping Companies Improve: The goal of the process created by the Executive Order is to help more contractors come into compliance with workplace protections, not to deny contracts to contractors.  Companies with labor law violations will be offered the opportunity to receive early guidance on whether those violations are potentially problematic and remedy any problems.  Contracting officers will take these steps into account before awarding a contract and ensure the contractor is living up to the terms of its agreement.

6. Give Employees a Day in Court: The Executive Order directs companies with federal contracts of $1  million or more not to require their employees to enter into predispute arbitration agreements for disputes arising out of Title VII of the Civil Rights Act or from torts related to sexual assault or harassment (except when valid contracts already exist).  This builds on a policy already passed by Congress and successfully implemented at the Department of Defense, the largest federal contracting agency, and will help improve contractors’ compliance with labor laws.

7. Give Employees Information About their Paychecks: As a normal part of doing business, most employers give their workers a pay stub with basic information about their hours and wages.  To be sure that all workers get this basic information, the Executive Order requires contractors to give their employees information concerning their hours worked, overtime hours, pay, and any additions to or deductions made from their pay, so workers can be sure they’re getting paid what they’re owed.

8. Streamline Implementation and Overall Contractor Reporting: The Executive Order directs the General Services Administration to develop a single website for contractors to meet their reporting requirements-for this order and for other contractor reporting.  Contractors will only have to provide information to one location, even if they hold multiple contracts across different agencies.  The desire to “report once in one place” is a key theme in the feedback received from current and potential contractors.  This step is one in a series of actions to make the federal marketplace more attractive to the best contractors, more accessible to small businesses and other new entrants, and more affordable to taxpayers.

Part of the basic American bargain is that if you take responsibility, work hard and play by the rules, workers can count on fair wages, freedom from discrimination on the job, and safe and equitable workplaces. Taxpayer dollars shouldn’t be used by unscrupulous employers to drive down living standards for our families, neighbors, and communities.  By creating incentives for better compliance and a process for helping contractors come into compliance with basic workplace protection laws, the Executive Order is basic good government that will increase efficiency in federal contracting and will help strengthen our workforce and our economy.

Mass. Window Company Settles Prevailing Wage Law Allegations

BOSTON (Legal Newsline) – Massachusetts Attorney General Martha Coakley announced a $109,000 agreement on Tuesday with an Easthampton window company to resolve allegations it violated the state’s Prevailing Wage Law.

R&R Window Contractors Inc. allegedly failed to pay the proper prevailing wage and failed to submit true and accurate payroll records connected with several public works projects throughout the state.

“The prevailing wage law ensures a level playing field for contractors and their workers who build our public schools, libraries, police stations and other public facilities,” Coakley said. “The enforcement of these laws protects workers’ rights and our taxpayer dollars.”

Coakley’s Fair Labor Division received complaints alleging that R&R was not properly paying workers performing glazier and carpentry work under the prevailing wage laws.

Between June 1, 2010 and March 28, R&R allegedly failed to pay some of its workers the correct prevailing wage rate and failed to submit true and accurate certified payroll records to the awarding authorities on nine of their public works construction projects.

R&R fully cooperated with Coakley’s inquiry and agreed to pay more than $109,000 in restitution and penalties to 43 current and former employees.

(Read More)

Comptroller Scott M. Stringer Settles Prevailing Wage Dispute For More Than $435,000

New York, NY – New York City Comptroller Scott M. Stringer announced an agreement this week between National Insulation & GC, Corp. and the Office of the New York City Comptroller, Bureau of Labor Law, in which the company admitted to willfully and knowingly failing to pay two employees a prevailing wage for contracted work with the Department of Education (DOE). National Insulation will pay a fine of $435,666.72, including more than $39,000 in civil penalties to the City, as a result of the settlement.

“We have found that all too often, employees are fleeced out of money to which they’re entitled by unscrupulous contractors looking to cut corners,” Stringer said. “These employees worked hard for their salaries and they deserve to get every cent that’s rightfully owed to them.  My office will continue to pursue these bad actors that fail to provide a legal wage.”

The two employees, Francisco Ayala and Angel Ribadeneira, were hired by National Insulation to perform insulation work at New York City public schools between December 2006 and November 2010. An investigation by the Comptroller’s office into National Insulation, prompted by a DOE referral and evidence provided, revealed allegations of under reporting hours, misclassification of workers, and use of “ghost workers” on sites.

(Read More)

San Diego Becomes Largest US City to Pass Minimum Wage Hike and Earned Sick Days Policy

Supporters of a hike in local minimum wages left nothing to chance yesterday as a city council decision on a proposal by Todd Gloria neared. Over 400 hundred people showed up at city hall for a 6pm hearing, filling the council chambers and two overflow rooms. Many wore pink signs indicating their support.

Email and social media reminders abounded during the day, including a mid-day Raise Up San Diego-led “Twitterstorm.” More than 100 people testified before the council. Highlights included former basketball star Bill Walton standing up in favor of the measure and United Foodservice and Commercial Workers’ Mickey Kasparian giving an impassioned speech.

In the end, the City Council did the right thing, voting 6-3 to enact by ordinance a minimum wage hike, with raises in three stages effective January, 2015. This means the measure will not be placed before the voters in November.

Additional increases will come in successive years, topping out at $11.50 in January, 2017. Starting in January 2019, further hikes will be tied to the consumer price index.

The measure as passed awards full time employees up to five days a year in earned paid sick leave; part-time workers will earn prorated sick leave based on the number of hours they work.

(Read More)

States That Raised Minimum Wage See Faster Job Growth, Report Says

New data released by the Department of Labor suggests that raising the minimum wage in some states might have spurred job growth, contrary to what critics said would happen.

In a report on Friday, the 13 states that raised their minimum wages on Jan. 1 have added jobs at a faster pace than those that did not. The data run counter to a Congressional Budget Office report in February that said raising the minimum wage to $10.10 an hour, as the White House supports, would cost 500,000 jobs.

The Associated Press writes:

“In the 13 states that boosted their minimums at the beginning of the year, the number of jobs grew an average of 0.85 percent from January through June. The average for the other 37 states was 0.61 percent. Nine of the 13 states increased their minimum wages automatically in line with inflation: Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington. Four more states – Connecticut, New Jersey, New York and Rhode Island – approved legislation mandating the increases.”

(Read More)

More than $1.6M in Unpaid Overtime for 1,543 Workers in the Gulf Coast Recovered by US Labor Department

HOUMA, La. – B & D Contracting Inc., a labor recruiting and staffing agency that caters to oil field services and maritime fabrication facilities along the Gulf Coast, has agreed to pay $1,660,438 in back wages to 1,543 current and former employees. An investigation by the U.S. Department of Labor found that the company engaged in improper pay and record-keeping practices that resulted in employees being denied overtime compensation in violation of the Fair Labor Standards Act. The employees were assigned to client work sites throughout Louisiana, Mississippi and Alabama to work as welders, pipe fitters and shipfitters.

Investigators from the Wage and Hour Division’s New Orleans District Office found the company mischaracterized certain wages as per diem payments and impermissibly excluded these wages when calculating overtime premiums, denying employees earned overtime compensation.

“Temporary staffing agencies serve valuable and legitimate business needs in today’s economy,” said Dr. David Weil, administrator for the Wage and Hour Division, “But employers may not manipulate these arrangements and use evasive pay practices to avoid paying workers their rightful wages.”

“The labor violations we found in this case are not unique to B & D Contracting Inc.,” said Cynthia Watson, regional administrator for the division in the Southwest. “We are increasingly finding the use of per diem schemes as a means of decreasing overtime pay and tax obligations in the staffing and support services industry in this region. The resolution of this case demonstrates our continued focus on combating such labor violations in order to improve compliance in this industry.”

(Read More)

Taking a Bigger Bite out of Wage Theft in the Garden State

Two central New Jersey towns are attempting to crack down on employers who illegally withhold wages from workers — tying local business licenses to compliance with state wage laws.

The new rules, adopted by New Brunswick in December and Princeton on Monday, give the towns the ability to refuse to renew the license of businesses that have been found guilty either in court or by the state Department of Labor of wage theft — not paying for all hours worked, not paying at least the minimum wage, or not paying overtime.

Activists who helped craft the local ordinances say they could be a model for other communities and are reaching out to expand the wage-theft provisions to other towns. They also hope the local efforts can spur action on a state bill — A1317 — that would make it easier for workers to file wage-theft claims and would increase penalties on those convicted of wage theft.

(Read More)

Virginia Is for Compliers: State Can Now More Easily Pursue Misclassification, Subcontracting Violators

Virginia’s penalties for misclassifying workers in order to avoid paying insurance costs got a boost this month thanks to a new law.  The Virginia Workers Compensation Act made it easier for the state to take action against violators, according to Virginia Workplace Law:

The civil penalty is now up to $250 per day for each day of noncompliance, subject to a maximum penalty of $50,000, plus collection costs.”  The VWCA requires every business owner with more than two employees (a part-time worker is counted as one employee) to have coverage for such worker.

Language in the law will curtail unscrupulous employers from rebranding their employees as independent contractors, the Workers Compensation Commission said:

“Employers should also be aware, designating a worker as an ‘independent contractor’ does not necessarily mean they are not an employee.  Workers’ compensation looks to whether the business exerts control over the manner and means of how the work is performed. In the event of a claim, the facts of the work circumstances will determine if the individual is covered for workers’ compensation, regardless of payment on a 1099 designation.”

(Read More)

16th Annual NAFC Conference – September is Fast Approaching, Register Today!


The National Alliance for Fair Contracting will be holding its 16th Annual Conference this year in the lakeside city of Chicago, IL, September 17-19, 2014.

The NAFC Conference provides a national forum for those committed to combating noncompliance of state and federal public contracting laws and draws attendance from contractors, labor unions, fair contracting organizations, attorneys and various officials from local, state and federal governments around the nation.
This year’s conference will be hosted at the Sheraton Chicago Hotel and Towers. NAFC Chairman Rocco Davis and the rest of NAFC’s Board of Directors are diligently planning content and speakers to ensure this will be our most successful conference to date.

 Register Now

September 17-19, 2014

Wednesday (September 17)

02:00pm – 05:00pm – Registration

Thursday (September 18)

07:00am – 08:00am – Breakfast

07:00am – 10:00am – Registration

08:00am – 10:30am – Plenary Session

10:30am – 12:00pm – Workshops

12:00pm – 01:00pm – Lunch

01:00pm – 03:00pm – Workshops

3:00pm – 5:00pm – Plenary Session

05:30pm – 06:30pm – NAFC General Reception

 Friday (September 19)

07:00am – 08:00am – Breakfast

08:00am – 10:00am – Plenary Session

10:00am – 12:00pm – Workshops

12:00pm – Adjournment

** Please note that the agenda is subject to change.

The CCW is Common Sense Construction

Today, the Midwest Economic Policy Institute released Common Sense Construction: The Economic Impacts of  Indiana’s Common Construction Wage with the University of Illinois School of Labor and Employment Relations and Smart Cities Prevail. The report finds that Indiana’s Common Construction Wage (CCW) promotes positive labor market outcomes for both construction workers and contractors.

Ten facts about the Indiana CCW:

1. The Common Construction Wage keeps Hoosier jobs local. (For more, see pages 5 and 11-13)

2. The Common Construction Wage does not increase total construction costs for public projects. (Pg. 4)

3. The Common Construction Wage promotes an upwardly-mobile, high-road economy for working families. (Pg. 5-8)

4. The Common Construction Wage supports almost 2,000 non-construction jobs and nearly $250 million in total worker income throughout the state. (Pg. 13-14)

5. The Common Construction Wage boosts the Indiana economy by about $700 million. (Pg. 13)

6. The Common Construction Wage increases tax revenues for all levels of government. (Pg. 15)

7. The Common Construction Wage fosters safer workplaces for Indiana construction workers. (Pg. 15-16)

8. The Common Construction Wage increases the benefits package paid to workers by around 20 percent. (Pg. 17)

9. The Common Construction Wage produces a highly-skilled, highly-productive workforce. (Pg. 18-19)

10. The Common Construction Wage does not favor union contractors over nonunion contractors. (Pg. 19-21)

(Copy of Report)

YouTube Video: Common Construction Wage Works!