The Obama administration has recently issued several heavy-handed executive actions that affect the federal contracting community, particularly the construction industry. These actions cover everything from potential blacklisting to super-minimum wage to overtime.
Here’s a roundup of all these types of executive actions ABC has covered this year in Newsline. In addition, to learn more about how these actions will impact federal contractors, join ABC General Counsel Maury Baskin Thursday, Sept. 11, 2014, at 2 p.m. (ET), for an ABC member-only webinar as he discusses how federal contractors should prepare for these forthcoming changes.
The new blacklisting executive order
On July 31, President Obama issued Executive Order 13673 that may lead to additional costs and the blacklisting of some federal contractors. The executive order instructs newly appointed bureaucrats at federal agencies to determine whether a business is “responsible” enough to receive a federal contract based on a subjective review of each company’s recent compliance history with 14 federal and similar state workplace laws.
The president’s action attempts to hold contractors to a standard that some federal agencies can’t even comply with for their own employees. The subjective nature of the order opens the door to favoritism and abuse of government contractors by administration officials. In addition, it is expected to increase red tape and serve as a barrier for businesses of all sizes to be awarded new federal contracts.
ABC encourages the merit shop contracting community to participate in the forthcoming regulatory rulemaking process implementing this executive order.
Super-minimum wage rule
The U.S. Department of Labor’s (DOL) proposal to implement Executive Order 13658, issued on Feb. 12, also creates confusion for federal contractors. Beginning Jan. 1, 2015, the minimum wage for federal contractors will rise to $10.10 per hour.
ABC’s primary concerns, expressed in the comments submitted to DOL, aren’t related to the wage rate itself, but to the methods used to raise the rate and the order’s applicability to employees.
The proposal creates uncertainty by extending coverage beyond laborers and mechanics and by not specifying whether apprentices are also included in the proposal. Further, the president and DOL are exceeding their authority by ignoring long-standing precedent and attempting to override acts of Congress by setting minimum wage on their own.
Requirement to report summary data on employee compensation
President Obama issued two executive actions in April that deal with employee compensation, including Executive Order 13665 and an April 8 presidential memo.
On August 8, DOL issued a proposed rule implementing the memo that would require contractors and subcontractors to submit to DOL summary data on compensation paid to their employees, including data by sex and race.
Executive Order 13665 prohibits federal contractors from retaliating against employees who discuss their compensation with fellow employees and requires federal contractors and subcontractors to submit compensation data to DOL. These requirements may create additional costly and burdensome reporting obligations for federal contractors.
“Modernizing” overtime regulations
On March 13, the president issued another presidential memo instructing DOL to “modernize” overtime regulations. In his memo, the president seeks to overhaul the Fair Labor Standards Act’s “white collar” overtime exemption. This memo has the potential to affect all federal contractor employers and private employers covered under the Fair Labor Standards Act.