Overview. Pursuant to the Congressional Review Act, on March 27, 2017, President Trump signed legislation disapproving of then-President Obama’s Fair Pay and Safe Workplaces Executive Order. President Trump also issued an Executive Order directing the Department of Labor and other executive agencies to “consider promptly rescinding any orders, rules, regulations, guidance, guidelines, or policies implementing or enforcing the revoked Executive Order[].” As a result, federal contractors will not be required to report alleged labor violations to federal agencies as part of the bid process, are not required to implement procedures to comply with required paycheck transparency, and will not be prohibited from entering into mandatory arbitration agreements concerning employee Title VII claims.
Background. On July 31, 2014, President Obama signed the Fair Pay and Safe Workplaces Executive Order (EO 12673) to require prospective federal contractors to disclose labor law violations and give agencies guidance on how to consider labor violations when awarding federal contracts. On August 24, 2016, the U.S. Department of Labor and the Federal Acquisition Regulatory (“FAR”) Council published the highly-anticipated final rule and guidance implementing EO 13673. This so-called “Blacklisting” rule ultimately required contractors to disclose 3 years’ worth of labor law decisions (as defined in the Rule), when bidding for a federal contract. It also imposes certain paycheck transparency obligations on federal contractors and prohibited mandatory arbitration agreements in certain instances. More information can be found on the Department of Labor’s website by clicking here.
The final regulations set out a phased-in reporting requirement with regular reporting beginning October 25, 2016. The effective date for the arbitration provision was also October 25, 2016, but the effective date for paycheck transparency was January 1, 2017.
Subsequently, the construction and security industry groups filed a lawsuit to block the Fair Pay and Safe Workplaces Executive Order and related rule. On October 21, 2016, a U.S. District Court Judge blocked the labor law violation disclosure requirements and the restriction on use of arbitration agreements portion of the Fair Pay and Safe Workplaces Final Rule and Guidance. The Pay Transparency requirements, which were set to take effect on January 1, 2017, were not enjoined and they took effect on that date.
President Trump’s action on May 27, 2017, has assured that the federal contractors and subcontractors will never be subject to the mandates set forth in the final rule implementing Executive Order 13673, including the pay transparency provisions.
Call to Action. Federal contractors and subcontractors will not have to report labor law violations when bidding for a contract, they are not prohibited from entering into mandatory arbitration agreements regarding Title VII claims, and they do not have to abide by any wage statement requirements applicable only to federal contractors. All employers should, however, continue to comply with state specific wage statement requirements. For more information on the wage statement requirements in your jurisdiction, please contact your Relationship Manager or Service Team.