Secretary of Labor Thomas E. Perez today takes a decisive step forward implementing Fair Pay and Safe Workplaces Executive Order.  The new proposed regulations and agency guidance build on President Obama’s Executive Order last summer, protecting millions of workers involved in federal contracting from wage theft, inadequate workplace safety measures, and banning the abusive practice of denying access to the courts through mandatory arbitration clauses.  Both are being published today in the federal register and opened for a notice and comment period before final implementation.

The proposed regulations that require disclosure and transparency for certain contractors doing more than $500,000 of business with the Department of Defense, GAO, and NASA.  The proposed Guidance provides rules and processes for other federal agencies to effectively implement the Executive Order.

The proposed rules would require disclosure of serious, repeated, willful, or pervasive violations of the law, including specific information regarding claims made against the contractor related to 14 federal laws and executive orders:

• the Fair Labor Standards Act (the FLSA);
• the Occupational Safety and Health Act of 1970 (the OSH Act);
• the Migrant and Seasonal Agricultural Worker Protection Act (MSPA);
• the National Labor Relations Act (the NLRA);
• 40 U.S.C. chapter 31, subchapter IV, also known as the Davis-Bacon Act (the DBA);
• 41 U.S.C. chapter 67, also known as the Service Contract Act (the SCA);
• Executive Order 11246 of September 24, 1965 (Equal Employment Opportunity);
• section 503 of the Rehabilitation Act of 1973;
• the Vietnam Era Veterans’ Readjustment Assistance Act of 1972 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974;
• the Family and Medical Leave Act (the FMLA);
• title VII of the Civil Rights Act of 1964 (Title VII);
• the Americans with Disabilities Act of 1990 (the ADA);
• the Age Discrimination in Employment Act of 1967 (the ADEA); and
• Executive Order 13658 of February 12, 2014 (Establishing a Minimum Wage for Contractors).

The rules would also require a covered contractor to collect and disclose similar information for its sub-contractors involved in a contract.  And they require wage transparency and paycheck disclosures for employees and those treated as independant contractors so workers can have the information to assess whether they are being paid fairly under the Fair Labor Standards Act or other applicable laws or executive orders.  Finally, the proposed regulations would also ban certain forms of forced arbitration of claims related to sexual assault and sexual harassment so that victims have access to the courts for violations of Title VII of the Civil Rights Act of 1964.

If effectively implemented, these interlocked requirements of disclosure, transparency, and supply chain responsibility will go a long way to promote workplace safety and prevent wage theft among the millions of workers involved in government contracting.  In a 2010 study cited by the DOL, the Government Accountability Office found 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.  Since then, other studies have found that these patterns have persisted even despite incremental improvements in the disclosure system.

The public and practitioners will now have sixty days to submit comment on the new rules.

Questions about this post, the status of employment rights law and developments under the Fair pay and Safe Workplaces executive Order can be directed to the author.  David Blanchard is an employment rights attorney.