Fate of Federal Contractor Fair Pay Order in Limbo

Daily Labor Report® is the objective resource the nation’s foremost labor and employment professionals read and rely on, providing reliable, analytical coverage of top labor and employment...

By Ben Penn

May 25 — Senate Democrats are trying to prevent Republicans from using the defense authorization process to dramatically scale back President Barack Obama's executive order requiring federal contractors to disclose workplace violations. The outcome appears to rest in the president's hands.

The Senate is now debating a fiscal year 2017 National Defense Authorization Act bill that includes language exempting most Defense Department contractors from the Fair Pay and Safe Workplaces executive order. And even though a Democrat will likely introduce language this week to remove that provision, it would face an uphill battle in the GOP-controlled Senate.

The House already passed its version of the NDAA (97 DLR A-9, 5/19/16), which would also remove DOD contractors from the executive order and its implementing rules. However, the Senate policy bill contains different language related to the order. When the Senate passes the measure, the chambers will have to sort out the differences in conference committee.

“It is looking extremely probable that this issue will have to be hashed out in conference,” Karla Walter, director of the American Worker Project at the Center for American Progress, told Bloomberg BNA May 25. “We are working with our allies in the House and Senate as well as the White House to ensure that the final bill does not include these damaging provisions.”

Veto Expected

The administration already issued a statement on the House bill declaring that if presented with the current legislation, the president's senior advisers would recommend he veto it. That statement says the administration “strongly objects” to the bill's language pertaining to the Fair Pay and Safe Workplaces executive order.

But several lobbyists who support the order told Bloomberg BNA they will be hard at work to ensure the White House remains committed to the veto stance when the chambers get to conference. Unlike an appropriations bill, the NDAA is a policy bill that must be passed this year.

The executive order would require businesses seeking government contracts worth more than $500,000 to disclose any violations of 14 federal labor and employment laws and state-law counterparts for the previous three years (147 DLR AA-1, 7/31/14). Agencies could deny contracts to egregious violators based on the information.

Those who favor the executive order say this is a GOP effort to gut the president's order because DOD contracts account for a significant majority of overall federal contracting.

Lobbyists from a coalition of business trade associations, including the U.S. Chamber of Commerce, H.R. Policy Association and the National Association of Manufacturers, did not comment May 25. The coalition has referred to it as the “blacklisting” order and has strongly opposed it.

Meanwhile, the Federal Acquisition Regulatory Council and the Labor Department recently sent draft final versions of regulations and guidance that implement the executive order to the White House for final review (86 DLR A-9, 5/4/16).

To contact the reporter on this story: Ben Penn in Washington at bpenn@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com