President Obama Signs Executive Order Requiring Federal Contractors to Disclose Labor Law Violations and Provide Information on Paystubs, Limits Mandatory Arbitrations
On July 31, 2014, President Obama signed the Fair Pay and Safe Workplaces Executive Order. According to the Fact Sheet released by the White House, the stated intent of this measure is to “crack down on federal contractors who put workers’ safety and hard-earned pay at risk” by imposing new obligations and requirements on companies who contract with the government. This is President Obama’s second recent executive order relating to federal contractors (an earlier measure prevents those companies from discriminating against workers based on their sexual orientation).
The terms of this executive order require companies bidding for federal contracts worth more than $500,000 to make public any previous violations of labor law from the past three years. These covered federal statutes and equivalent state laws include protections for wage and hour, safety and health, collective bargaining, family and medical leave, and civil rights. Contractors will be required to keep a record of their own mistakes; businesses will be required to self-report their labor violations and update government agencies biannually. Furthermore, contractors will be required to collect similar information from many of their subcontractors. Such measures are intended to encourage companies to settle back wage claims, improve the behavior of contractors, and promote efficient federal contracting.
Another provision of the order requires contractors to give their employees, on their paystubs, for each pay period, information concerning their total hours worked, overtime hours, pay, and any additions to or deductions made from their pay.
Finally, the order also forbids companies with federal contracts of more than $1 million from requiring their employees to sign pre-dispute arbitration agreements waiving their right to litigate workplace discrimination lawsuits, such as disputes arising out of Title VII of the Civil Rights Act or torts related to sexual assault or harassment (except where valid arbitration contracts already exist). Given the U.S. Supreme Court’s recent pro-arbitration, pro-employer decisions, this is a decidedly pro-employee move, which will allow employees to take back the rights that have been stripped away from them in recent years.