‘Red flag’ or ‘blacklist’? Contractor disclosure of labor-law violations under debate

Washington – Witnesses at a Feb. 26 House subcommittee hearing criticized last year’s Executive Order that aimed to ensure federal contracts are not awarded to companies that habitually violate labor laws.

The Fair Pay and Safe Workplaces Executive Order, issued July 31, would require employers bidding on federal contracts exceeding $500,000 to disclose recent violations of labor laws, including occupational safety regulations.

During the joint hearing before the Workforce Protections and Health, Employment, Labor and Pensions subcommittees, some witnesses called the order a “blacklist” regulation that could bar good employers from government work because they received technical violations stemming from miscommunication or a misunderstanding about employer obligations.

However, Karla Walter, an associate director of the American Worker Project at the Washington-based Center for American Progress, said the Executive Order merely requires employers to check a box to indicate if they have had a labor violation. The checked box does not bar the employer from receiving a contract, she said, but raises a “red flag” to the federal contracting officer to further investigate the matter before awarding a job.

Angela Styles, a partner at the law firm Crowell and Moring’s Washington office, argued that a robust and fair system is already in place to catch “bad actors,” and some federal agencies are better at using it than others.