More data to be collected on wage thieves who want federal contracts

Three federal agencies charged with labor law oversight and enforcement – the National Labor Relations Board, the Labor Department, and the Equal Employment Opportunities Commission – are going to start collecting information on federal labor law-breaking firms, storing it in a central database and sending it to federal contracting officers.

The officers, under an executive order President Obama issued two years ago, will then use that data to help determine whether such labor law-breakers can continue to bid on – or get – federal contracts. But it won’t be a straight contract-vs.-no contract scenario.

The process was outlined in a memo in early July from NLRB Associate General Counsel Anne Purcell to all the agency’s regional directors. Those RD decisions about law-breaking will be the ones NLRB sends to the contracting officers. But the NLRB must warn the firm that it comes under the executive order, that it’s been investigated for breaking the law, and that it has the opportunity to settle the case first.

If a firm settles the law-breaking claims before the regional director writes up formal complaints for the central database the contracting officers will use, the complaint won’t be recorded or used against the firm, the memo adds.

Obama’s Fair Play Safe Workplaces executive order “creates in each (federal) agency a new position, Labor Compliance Advisor, who will assist contracting officers in making their responsibility determinations” about whether firms bidding for federal business committed “serious, repeated willful or pervasive violations” of labor law, NLRB’s memo explains.

Obama’s executive order does not totally bar such law-breaking contractors from getting federal business, but it tells the federal officers to weigh the labor law-breaking when they award contracts. They’ll get the law-breaking data from the NLRB, the Labor Department, which enforces wage and hour laws and the EEOC, which enforces anti-discrimination laws.

The order – and the way it’s implemented – are important. The federal government is one of the largest, if not the largest, buyer of goods and services in the U.S. So its decisions to award, or yank, contracts virtually always have huge impacts on firms’ bottom lines.

Many of those firms are labor law-breakers. In just the Defense Department alone, data shows 49 firms with wage and hour law violations got $81 billion in federal contracts last year.

“A contractor who doesn’t follow the law isn’t living up to his or her obligations to you and may endanger your own workers and operations. The same is true for the federal government, which contracts with many thousands of private businesses that employ almost one in five American workers,” a White House fact sheet says.

“Unfortunately, studies have shown many of the contractors with the largest wage-and-hour and worker safety violations go on to receive new contracts. Indeed, while the vast majority of federal contractors play by the rules, every year tens of thousands of American workers are denied overtime wages, are unlawfully discriminated against in hiring or pay, have their health and safety put at risk by federal contractors who cut corners, or are otherwise denied basic workplace protections.

“An analysis by the Center for American Progress examined the 28 companies with the top” number of “workplace violations between fiscal year 2005 and FY 2009 and found that a quarter of these companies went on to have significant performance problems.

“This data suggests a potentially strong link between a history of labor law violations and inadequate contract performance. It also means that the overwhelming majority of contractors who do follow the law-and may be more likely to be good stewards of taxpayer dollars-are unfairly competing against the worst actors who repeatedly violate the rights of workers and put them in danger.”               

Photo: Wisconsin Jobs Now/Photopin (CC), via Flickr