Washington Update: Safe contracting

Employees working under federal contractors may find their workplaces getting safer, if a new Executive Order pans out the way some worker safety advocates hope.

In July, President Barack Obama signed the Fair Pay and Safe Workplaces Executive Order, which requires employers seeking a federal contract worth at least $500,000 to disclose most Department of Labor violations received in the previous three years. This would include violations of laws such as the Occupational Safety and Health Act and the Family and Medical Leave Act.

Federal contracting officers will take a company’s violation history into account before extending a contract, according to the White House. Federal agencies will appoint advisors to assist these contracting officers in reviewing companies’ disclosures, and the advisors will provide guidance on whether the actions of prospective contractors are at “the level of a lack of integrity or business ethics,” the White House said.

Federal contracts are held by an estimated 24,000 businesses employing nearly 28 million workers. Most companies with federal contracts follow the law, Obama said, but the Executive Order will help ensure companies found to repeatedly violate labor laws won’t receive federal business.

“Our tax dollars shouldn’t go to companies that violate workplace laws. They shouldn’t go to companies that violate worker rights. If a company is going to receive taxpayer money, it should have safe workplaces,” Obama said at the signing of the order.

It appears that prior to the Executive Order, taxpayer money had indeed gone to companies that violated worker protection laws.

In late 2013, the Senate Health, Education, Labor and Pensions Committee released the results of a yearlong investigation into federal contractor safety. Led by committee chair Sen. Tom Harkin (D-IA), the investigation found nearly half of all penalty dollars OSHA assessed for violations in 2012 were against companies with federal contracts that year. In addition, a Government Accountability Office study conducted in 2010 found that from 2005 to 2009, eight of the 50 largest workplace safety and health penalties were assessed against seven companies that had received federal contracts in 2009.

These reports prompted the Executive Order, which Harkin characterized as the federal government leading by example.

“Today’s Executive Order will ensure that we are using taxpayer dollars smartly in a way that improves compliance with our laws and raises workplace standards for workers across the country,” the senator said in a press release.

Despite the excitement that labor advocates are expressing about the Executive Order, it contains a few caveats.

First, it doesn’t go into effect until 2016, and it will be limited to new contracts only, meaning any current federally contracted company with a poor safety record will still be paid by the government. Additionally, it’s possible that employers with safety violations on their records could still be awarded contracts – it will depend on the severity and frequency of the violations, and how contracting officers assess those violations (with input from DOL advisors).

Further, Executive Orders aren’t laws – a new president can issue an Executive Order that overturns a previous order. Obama’s last day in office is scheduled for Jan. 20, 2017, giving this order at least a year on the books. But whether it lasts longer will depend on future presidents.

Despite these slight drawbacks, this order seems pretty logical. Obama noted that companies that cut corners on labor laws are likely cutting corners in other areas – possibly resulting in shoddy work delivered on the taxpayers’ dime. Companies that do follow the law won’t have to try to win contracts over other companies putting out lowball bids stemming from minimal – if any – investment in safety.

The Executive Order also lays out opportunities for how companies with violations on their record can receive guidance on improving compliance with the law. This means companies that have violated labor laws won’t miss out on contract opportunities, provided they are willing to make improvements.

Given these factors, this Executive Order could very well lead to safer federally funded worksites.

The opinions expressed in “Washington Update” do not necessarily reflect those of the National Safety Council or affiliated local Chapters.