The following post was authored by Compliance Advisory Board member and employment law expert, Jon Zimring of Greenberg Traurig LLP. This is the first post in a series that will take a deep dive into what federal contractors need to know about Executive Order 13673, or “Fair Pay and Safe Workplaces.”
Amidst the flurry of Executive Orders President Obama has issued in the past year affecting U.S. Government Contractors, Executive Order 13673, entitled “Fair Pay and Safe Workplaces,” carries the highest stakes. Beyond imposing significant additional obligations and requirements on the contracting community, E.O. 13673 is unique because it directly affects procurement. This, together with the breathtaking scope of what it could mean to have to comply with E.O. 13673, makes it an Executive Order contractors should pay close attention to over the remainder of the Obama presidency and beyond.
The key features of E.O. 13673 are relatively simple and straightforward in concept. E.O. 13673 applies to procurement of any federal contracts in excess of $500,000. It requires contractors, as a condition of eligibility for such high dollar contracts, to self-report on both their own, and eventually their subcontractors’, records of “compliance with labor laws.” With these self-reports, the government itself is then tasked with coordinating between and among federal acquisition, the U.S. Department of Labor and a number of other federal labor and employment law enforcement agencies to determine what, if any, affect each contractors’ compliance record should have on contact awards. Beyond this, E.O. 13673 also requires such contractors to establish special paycheck notifications for employees working on any contracts that are subsequently awarded and, for contracts in excess of $1,000,000, prohibits contractors from imposing mandatory arbitration of employment law claims.
The underlying philosophy of E.O. 13673 is similarly simple and straightforward. The basic premise is that high dollar contracts should go to those contractors who play by the rules, as demonstrated by a sound record of labor law compliance. As explained in E.O. 13673, labor law problems are believed to correlate to poor workplace conditions, leading to lower productivity, workplace disruption and high turnover. This, in turn, results in lower quality products and services, greater risk of project delays, cost overruns and generally unfavorable conditions for the effective fulfillment of government contract obligations. E.O. 13673 is also premised on the belief that those contractors who invest in positive labor relations should not be at a disadvantage in bidding compared to those who cut corners, so E.O. 13673 is meant to level the playing field so taxpayer dollars are only spent on those employers who create good jobs and maintain fair, safe workplaces where worker rights are honored.
As simple and straightforward as the concepts and philosophy underlying E.O. 13673 may be, the obligations imposed by E.O. 13673 are anything but simple or straightforward. Essentially E.O. 13673 requires contractors, at the time of bidding and then periodically on a semi-annual basis, to self-report on any “administrative merits determinations”, “arbitral awards or decisions” or “civil judgments” rendered against them or their subcontractors for violations of any of the following 14 federal labor laws and their state counterparts:
- Fair Labor Standards Act
- Occupational Safety and Health Act of 1970
- Migrant and Seasonal Agricultural Worker Protection Act
- National Labor Relations Act
- Davis-Bacon Act
- Service Contract Act
- Executive Order 11246
- Section 503 of the Rehabilitation Act of 1973
- Vietnam Era Veterans Readjustment Assistance Act of 1974
- Family Medical Leave Act
- Title VII of the Civil Rights Act of 1964
- The Americans with Disabilities Act of 1990
- Age Discrimination in Employment Act of 1967
- Executive Order 13658
With this information, government contracting officers are tasked with seeking feedback from “labor compliance advisors,” which are new officials to be designated at each enforcement agency/division responsible for the fourteen laws cited above. Labor compliance advisors are expected to be responsible as the point person, coordinator and advisor interpreting what each contractor’s self-reported labor law compliance record means. They are expected to have significant input into whether what each contractor has self-reported represents “serious, repeated, willful or pervasive” violations and whether effective remedial steps to correct violations have been taken. In a nutshell, labor compliance advisors at each relevant agency will advise contracting officers on what each contractor’s self-reported record of labor law compliance should mean to that contractor’s eligibility for large federal government contractor awards.
Clearly, the stakes of self-reporting under E.O. 13673 are high. So what specifically needs to be reported? E.O. 13673 itself tasked the Department of Labor with providing guidance on the definitions of “administrative merits determinations”, “arbitral awards or decisions” and “civil judgments” that must be self-reported. That guidance, the FAR Council’s contemporaneous rules on how it will use the self-reported information and the implications of contractors will be the subject of part two of this post.
Jon Zimring practices management side labor and employment law, representing clients before both the courts and administrative agencies, including the U.S. Department of Labor (DOL), the Office of Federal Contract Compliance Programs (OFCCP), the National Labor Relations Board (NLRB), the Equal Employment Opportunity Commission (EEOC), numerous state and local counterparts to these agencies, and additional other federal, state, and local agencies that investigate, audit compliance with, and enforce labor and employment laws. Drawing on this experience, he also has an active practice assisting employers with prevention through proactive audits, compensation analyses, investigations and consultation, and the development of policies, procedures, systems and training. Jon’s practice includes the representation of employers through virtually all workplace issues, including traditional labor relations with unions, affirmative action compliance, wage and hour, leave and disability, and all forms of discrimination, harassment, and retaliation.