WASHINGTON (AP) — President Barack Obama is preparing to sign an executive order cracking down on labor violations by companies that contract with the federal government, the White House said Wednesday.

Obama's order will require companies seeking federal contracts valued at more than $500,000 to make public any labor law violations in the last three years, a step the Obama administration hopes will incentivize companies to resolve labor disputes such as back wage claims.

Federal agencies will be given more guidance on how labor violations should factor into their decision-making as they award lucrative contracts, officials said, with an eye toward pushing the most egregious violators into remediation agreements before new contracts are granted. Under the order, workers will also be given information each pay period to allow them to determine whether their paychecks are accurate.

In a bid to allow potential victims to have their day in court, the president's order will also prohibit companies pursuing government contracts from requiring their workers to agree upfront to mandatory arbitration, in which an intermediary hears both sides and then makes a binding decision. That provision, which applies to new contracts exceeding $1 million, will affect disputes brought under the anti-discrimination section of the Civil Rights Act or to accusations of sexual assault or harassment. It mirrors protections Congress has already enacted that apply to Pentagon contracts.

Obama plans to sign the order at the White House during an event on Thursday.


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The strengthened worker protections reinforce Obama's strategy of scanning the federal government for ways to move his own policies incrementally forward despite being unable to secure the more sweeping changes in the U.S. on which he campaigned. Obama has vowed this year to act on his own where he can despite a political impasse in Congress and staunch opposition from Republicans.

In a negative response to the order, the U.S. Chamber of Commerce noted that Congress has already passed numerous laws covering workplace employment and then criticized Obama for bypassing lawmakers.

"If the president wants to add the penalty of debarment from federal contracts to be determined by procurement officials without expertise in those laws, he needs to go to Congress and get the proper authority," Randy Johnson, the chamber's senior vice president of labor, immigration, and employee benefits, said in a statement.

Already, Obama has signed executive orders requiring federal contractors to pay their workers at least $10.10 per hour, the rate Obama wants Congress to adopt as the national minimum wage, and barring contractors from discriminating against workers who are gay or transgender.

"The president is not going to back away from his efforts to use his authority to solve problems and help American families," Obama's senior adviser, Dan Pfeiffer, wrote in a letter to the White House's email list, minutes after House Republicans voted to move forward with a lawsuit against Obama for allegedly overstepping his authority.

White House officials said Obama's latest move aims to ensure that taxpayer dollars don't reward corporations that break the law, a concern elevated by data that shows that even major labor violations often don't prevent companies from cashing in on major federal contracts in the future. Reports from the Government Accountability Office, the investigative arm of Congress, and from the Senate Health, Education, Labor, and Pensions Committee show that federal contractors routinely are given new contracts despite receiving some of the largest penalties for labor violations.

The executive order, first reported by The Huffington Post, tracks closely with proposals by the Center for American Progress, a liberal think tank with close ties to the White House. Neera Tanden, the group's president and an Obama campaign veteran, said the executive order gives an "extra bite" to laws already on the books that protect the rights of workers.

"It was surprising to me when we started working on this that it wasn't law already — that if you violate labor laws, it wouldn't be a problem for you to get a federal contract," Tanden said in an interview.

 

Some 24,000 companies contract with the federal government, employing about 28 million workers — or roughly 1 in 5 American workers. Because it only applies to new contracts and to contracts above a certain dollar amount, the impact of Obama's executive order is expected to be more modest.

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