Benefits Insights, Spring 2017
President Trump has signed a resolution to overturn the Obama Executive Order on Fair Pay and Safe Workplaces, after both the House and Senate voted to repeal the regulation requiring agencies to take into account a contractor’s history of labor law violations in producing responsible determinations. Full implementation of the rule was scheduled to begin on October 25, 2016; however, it was shut down the day before when a federal district court in Texas issued a preliminary injunction.
The original intent of the rule had been to improve federal contractor compliance with workplace protection requirements by issuing a mandatory disclosure and assessment of labor law compliance for all prime contractors being considered for contracts with a total value of $50 million or more. The changes were meant to ensure that the competitive process was fair and taxpayer dollars were used only for contractors that meet their responsibilities to their employees. The rule also limited some arbitration agreements and required employers to include certain information in their workers’ paychecks to increase transparency.
The rule immediately drew opposition from contractors who expressed concern that it would delay the acquisition process and increase compliance costs while offering little benefit to the government or public. Also, the process was seen as being too subjective and judgmental, which could lead to inconsistent results.
It did not take much time before three national and local trade associations issued their formal complaint to a federal district court. The court ultimately issued the preliminary injunction due to concerns with the aspect that requires disclosure of alleged violations of labor law that have not yet been fully adjudicated. Furthermore, the court determined the rule to be overly broad concerning the reporting of prior violations.
With the resolution signed, federal contractors will no longer need to be concerned about any implementation or compliance issues concerning the Executive Order.