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White House Issues New Executive Order on Contractor Fair Pay and Safe Workplaces

August 26, 2014

On July 31, 2014, the White House issued an Executive Order (EO) titled “Fair Pay and Safe Workplaces” that imposes many new requirements on federal contractors. The purpose of the EO is to “increase efficiency and cost savings in the work performed by parties who contract with the Federal Government by ensuring that they understand and comply with labor laws.”

This sweeping EO achieves this purpose by identifying 14 labor requirements, such as the Fair Labor Standards Act, Davis-Bacon Act, Service Contract Act, and National Labor Relations Act, that contractors must report violations and contracting officers can rely to make a responsibility determination when awarding contracts with a value greater than $500,000.

In addition to contracting officers making responsibility determinations when awarding prime contracts, prime contractors must make the same determination in regards to subcontractors when compensation exceeds $500,000.

The EO requires the General Services Administration to create a new website for contractors to report violations and requires each agency to designate a senior official who will serve as that agency’s Labor Compliance Advisor.

This new requirement applies to contracts for goods, services, and construction. The Federal Acquisition Council and the US Department of Labor are also charged with developing regulations but no implementation deadlines were provided. Developing guidance will be a lengthy and complicated process.