Final Rules and Guidance Published Implementing Fair Pay and Safe Workplaces Executive Order, aka ‘Blacklisting’

By Nancy Hammer Sep 2, 2016

On August 25, the U.S. government published final regulations and the U.S. Department of Labor (DOL) issued a guidance document on implementing President Barack Obama's 2014 Fair Pay and Safe Workplaces Executive Order.

Often referred to as the "blacklisting" regulations because of concerns that the government will use these regulations to prohibit employers from contracting with the U.S. government due to actual or alleged labor law violations, the main provisions of the order require certain federal contractors to report violations of 14 different federal labor and employment laws in order to compete for federal contracts. SHRM's summary highlights additional provisions limiting arbitration and requiring certain disclosures to employees.

Although the regulations and guidance did not change significantly from the proposed versions, one key change made in response to stakeholder comments requires that subcontractors report violations directly to the DOL through a dedicated portal rather than reporting violations to the prime contractor as originally proposed. In addition, the final rule phases in the three-year period for reporting violations. The regulations go into effect on October 25, 2016, but will be implemented in stages.

SHRM raised several concerns about the regulations, pointing out that the government already has a process for evaluating the fitness of federal contractors and debarring them when appropriate. The regulations add significant new reporting burdens on federal contractors, expose them to unclear standards, and improperly add debarment as a new penalty to existing federal labor and employment statutes. Over the course of two years, SHRM has played a lead role in the industry Blacklisting Coalition by conducting numerous Capitol Hill visits, activating the SHRM A-Team to oppose similarly themed amendments in Congress, and explaining the impact on HR before the House Small Business Committee through testimony from SHRM A-Team member and congressional witness Debbie Norris. Congress is focusing on various efforts to blunt the impact of the final rule.

Both the Senate and House versions of the National Defense Authorization Act contain provisions that would exempt the Department of Defense and the National Nuclear Security Administration from the executive order. Because the language in the two versions is slightly different, it will have to be addressed when the Senate and House meet in a conference committee to resolve differences in the two versions of the bill. Provisions to minimize the impact of the executive order also exist in various appropriations bills before Congress.

As Congress wraps up "must pass" legislation later this year, it is possible that some provision regarding the executive order will be included. The DOL has made additional information available on its website.


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