“If a company is going to receive taxpayer money, it should have safe workplaces. It should pay its workers the wages they’ve earned. It should provide the medical leave workers are entitled to. It should not discriminate against workers… If you want to do business with the United States of America, you’ve got to respect our workers, you’ve got to respect our taxpayers.”
The statement from President Obama seemed about as uncontroversial as they come. The content of his executive order, designed to urge companies with federal contracts to come into compliance with the most basic worker protection laws, was similarly judicious and reasonable. But to the corporate lobbyists from the Associated Builders and Contractors and the International Franchise Association, talk of following workplace safety regulations and anti-discrimination laws sounded like fighting words.
The trade groups, among the most prominent representing federal contractors and concessionaires, immediately denounced favoritism, abuse, and “politically motivated executive overreach” that would result in “blacklisting businesses from federal contracts.” The lobbyists vowed to fight the order through Congress, the courts, and the rulemaking process.
A New York Times editorial this week was incredulous. Were contracting lobbyists really calling for “the right to cheat and maim” their employees? After all, the problems addressed by the executive order are very real: while most contractors surely abide by the law, nearly 30 percent of companies receiving the highest penalties for violations of federal labor law are among the ranks of federal contractors, according to a study by the U.S. Senate Health, Education, Labor, and Pensions Committee. Forty-nine federal contractors liable for major violations of labor law were responsible for close to 1,800 distinct enforcement actions by the Department of Labor over six years and were obligated to pay $196 million in penalties and back wages.
As my colleague Jenn Rolnick Borchetta has repeatedly argued in the context of President Obama’s minimum wage increase for contract workers, claims of executive overreach on contracting ring hollow. The President is on solid legal ground As the New York Times points out:
Under existing law, federal officials can bar contracts to companies with serious labor law violations. Mr. Obama’s order helps to execute the law by requiring bidders for federal contracts to disclose their labor-law violations going back three years and by putting an official at each federal agency in charge of tracking the disclosures.
The administration has been careful not to burden contractors and certainly does not seek to penalize companies for isolated, inadvertent and easily correctable mistakes. If a company has not had any violations, it simply checks a box attesting to that fact. If a company reports violations, procurement officials are to look for evidence of pervasive, repeated, willful or serious wrongdoing in weighing whether to deny a contract.
In addition, the order does not take effect until 2016 — giving companies time to start cleaning up their labor records if necessary.
But while the executive order a sensible move to bring companies whose business depends on taxpayer dollars into compliance with basic workplace protections, it’s not a complete one. New York Times editorial board member Teresa Tritch recently made the case that to truly ensure that “federal contracting is not a contest to see who can pay the least, but a rational process both for ensuring good jobs at fair pay and for setting an example for the private sector”
President Obama should go further, signing a Good Jobs executive order that would encourage contractors to improve workplace benefits and respect their employees’ rights to bargain collectively. This would reach beyond compliance with existing law and the President’s minimum wage increase to put more than 20 million Americans on the pathway to the middle class, as my colleagues explained in a recent study. Representative Eleanor Holmes Norton was thinking along the same lines when she introduced legislation directing the Secretary of Labor to promulgate regulations implementing Good Jobs Model Employer Standards.
The Department of Labor shouldn’t let handwringing by lobbyists stop them from drafting effective regulations to ensure that contractors follow existing laws.
Nor should the President let his detractors slow him down. President Obama’s executive orders—raising the minimum wage for federal contract workers; barring contractors from employment discrimination based on sexual orientation and gender identity; ensuring that contract employees who discuss their compensation are not retaliated against; and now encouraging compliance with worker protections—will improve the lives of millions of federal contract workers and paint a vivid picture of the nation we could be if Congress acted to ensure that all employers are held to the same standard.
A “Good Jobs Executive Order” is the next logical step.