On March 6, 2017, the Senate voted 49-48 to eliminate President Barack Obama’s Fair Pay and Safe Workplaces rule through the Congressional Review Act (CRA). The Fair Pay and Safe Workplaces rule was finalized in August 2016 by the U.S. Department of Labor, but subsequently blocked by court order in October 2016.

The Fair Pay and Safe Workplaces rule required federal contractors to disclose any violations of certain federal laws (and equivalent state laws) within the past three years on all bids for new federal contracts in excess of $500,000. These laws included, but were not limited to, the Fair Labor Standards Act, the Occupational Safety and Health Act, the National Labor Relations Act, and the Family and Medical Leave Act.

Opponents of the Fair Pay and Safe Workplaces rule often referred to it as the “blacklisting” rule, claiming it discouraged businesses from bidding on federal government contracts and penalized federal contractors for unsubstantiated allegations. Further, the opponents claimed the rule would result in fewer contractors applying for federal government contracts, which would in turn decrease jobs.

Proponents of the rule claimed it would promote workers’ rights.  Additionally, they asserted that the rule would increase the workplace productivity of employers who contract with the federal government, based on their belief that employers who abide by labor laws are more likely to have labor practices in place that enhance productivity.

Hours before the Senate vote, Senator Elizabeth Warren released a report that concluded “major federal contractors engage in illegal practices that harm workers financially and endanger their health and safety.” Warren’s report also stated that over 50% of the federal government’s largest contractors have violated federal wage and hour laws.

With the Senate’s majority vote, it is believed that President Trump will sign the resolution, effectively terminating the Fair Pay and Safe Workplaces rule. This move is likely to be received favorably by employers because it: 1) decreases the chances an employer will be penalized for unsubstantiated FLSA allegations; 2) decreases the documentation required of an employer to apply for government contracts; and 3) increases an employer’s chances of obtaining a federal government contract.

For the latest regarding the Fair Pay and Safe Workplaces rule, stay tuned to HRLegalist.


Ingram

Malcolm J. Ingram focuses his practice on counseling management in all aspects of labor relations and employment law.  He may be reached at 215-665-3273 or malcolm.ingram@obermayer.com