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Fair Pay and Safe Workplaces Executive Order - Big Changes Ahead


President Obama recently signed an Executive Order called the "Fair Pay and Safe Workplaces Executive Order" which will impact a wide range of labor and employment law issues.  While the law will not take effect until 2016, here are a few of the big changes that the Order sets out:

  • Among other things, the Order mandates that federal contractors disclose recent labor violations.
  • As well, any company that is attempting to obtain a federal contract for more than $500,000.00 must first disclose all of its "labor law violations" (state and federal) for the previous three years. 

Interestingly enough, "labor law violations" is a widely strewn phrase which includes violations of rules regarding civil rights, wage and hour, collective bargaining, and safety and medical leave, including violations of the FLSA, OSHA, NLRA, FMLA, ADA, and ADEA violations, among a host of others. 

  • Perhaps the most striking requirement in the Executive Order is the requirement that companies that seek to obtain a federal contract for more than $1 million are prohibited from utilizing arbitration agreements which require employees or independent contracts to enter into pre-dispute arbitration agreements.  

This Order should immediately increase compliance costs for contractors and will likely drive some companies to abandon government contract work altogether.  Unfortunately, for those small and mid sized businesses who have government contract work, the implementation of this Order will likely make it unprofitable to continue.  

For those keeping score at home, this Executive Order comes just a few weeks after Obama signed an Executive Order making it illegal for federal contractors to discriminate based on sexual orientation or gender identity and a prior Executive Order in January raising the minimum wage that federal contractors must pay employees to $10.10 per hour.  Unsurprisingly, the justification for such a wide reaching Executive Order is the claim that since Congress is gridlocked and will not pass anything, the only way to get things done on the labor front is by way of Executive Order.


A full copy of the Executive Order can be found here:  http://www.whitehouse.gov/the-press-office/2014/07/31/executive-order-fair-pay-and-safe-workplaces

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