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Companies that violate labor laws will now struggle to obtain federal contracts

Some employers are always willing to ignore state and federal labor laws for their own gain. Fortunately, the federal government has recently moved to crack down on adherence to federal labor law.

Now, any company that violates wage and discrimination laws or other labor laws will struggle to land federal contracts. The signed executive order has mandated that federal contractors report if they have violated any labor laws during the last three years. If they have violated labor and wage laws and/or if those violations are outrageous, they will not be considered for government contracts.

The order was signed into existence based on a study by the Government Accountability Office that revealed that about two-thirds of the 50 biggest wage and hour law violators carry federal contracts. Twenty of the 50 companies had also received huge penalties for safety violations. 

While the order is generally viewed as a step in the right direction, some observers think that a company unfairly accused may lose a chance to land government work, resulting in discrimination. However, if a company has only faced one accusation or committed one violation, it may not necessarily be enough for them to lose a chance to get a federal government contract. The order is aiming to deny companies federal work where the labor violations are repetitive, serious and deliberate.

This latest executive order also prohibits companies with federal contracts over $1.0 million from demanding workers sign mandatory arbitration agreements should they file an assault, sexual discrimination or harassment claim. Those arrangements are typically tilted in favor of the arbitration company.

It is about time that the federal government took steps for fair treatment for workers. Perhaps this new order may level the playing field and send a strong signal to companies that would cut corners and treat workers unfairly.

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