In his newest Executive Order, Fair Pay and Safe Workplaces, President Obama makes access to justice for workers a priority of his administration. Leading in the forum in which he has control-federal employees and companies that contract with the federal government-this the third pro-employee Order the President has signed this year. On July 21, 2014, President Obama banned federal contractors from discriminating against gay workers. Then, in January 2014, President Obama raised the minimum wage for new federal contractors to $10.10 an hour.
Signed on July 31, 2014, Fair Pay and Safe Workplaces has three components: making companies come clean about workplace abuses, ensuring that workers know how and for what they are being paid, and ensuring discrimination claims have access to our judicial system. It affects roughly 24,000 businesses with federal contracts, employing about 28 million workers. This newest Order signals President Obama’s commitment to labor rights and should be celebrated by workers rights advocates everywhere.
First, the Order mandates that companies bidding for federal contracts worth more than $500,000 make previous violations of labor law public if they have any to report. Specifically, companies that wish to contract with the government must disclose labor law violations from the past three years before they can get a government contract. The 14 covered federal statutes and equivalent state laws include those addressing wage and hour, safety and health, collective bargaining, family and medical leave, and civil rights protections. The White House acknowledges that requiring such reporting is designed to encourage companies to settle existing disputes, like paying back wages. Given the proliferation of wage theft across industries, such pressure is one important way to push back. Hopefully, it will encourage businesses to stop abusive wage practices.
Second, the Order ensures that workers are given the necessary information each pay period to verify the accuracy of their paycheck and hours worked. To be sure that all workers get this basic information, the Executive Order requires contractors to give their employees information concerning their hours worked, overtime hours, pay, and any additions to or deductions made from their pay, so workers can be sure they’re getting paid what they’re owed. This critical information in today’s era of rampant wage theft. But it is especially important because wage abuses have a strict statute of limitations that only stops when a person files a wage complaint.
Lastly, companies with federal contracts worth more than $1 million can no longer force their employees out of court and into arbitration to address workplace discrimination. Arbitration is a private dispute resolution process with limited judicial review. Forced arbitration has become a favored employer tactic, where arbitration is a requirement of taking the job. Often, these arbitration “agreements” contain clauses that prohibit class actions. For workers of modest means who experience workplace discrimination or wage theft, foreclosing collective action can prevent their claims from being heard because of the costs and difficulty in finding attorneys who can take their individual case. The Supreme Court’s recent upholding of mandatory arbitration agreements and class waivers makes fighting the “closing of courtroom doors” difficult.
Forced arbitration silences workers who experience workplace harms, leaving many claims unheard while unscrupulous employers gain direct advantage. President Obama recognizes this injustice and effectively combats it for the employees who suffer discrimination or sexual assault while working for large companies that contract with the government. Because it is limited to discrimination and sexual assault claims, it sadly excludes wage theft and other workplace harms. But it is definitely a step in the right direction.
President Obama has made labor rights a cornerstone of his “Year in Action” and workplace rights advocates applaud him for it. Instead of waiting for Congress to take action, President Obama leads the charge in protecting workers and hopefully, this leadership harkens more worker-friendly legal changes in the future.