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President Obama signed the “Fair Play and Safe Workplaces” Executive Order on July 31, 2014, targeting contractor compliance with Federal labor laws.  The Executive Order creates new obligations, both pre- and post- award, on federal contracts for goods and services, including construction, that exceed $500,000.

Under the Executive Order, prospective federal contractors are now required to disclose federal labor law violations before procuring a contract.  Specifically, during the bidding process, a bidder must disclose whether there has been any administrative merits determination, arbitral award or decision, or civil judgment, against the bidder for any labor law violations within the past three years.  Labor law violations will not automatically disqualify a bidder, but the contracting officer will consider such information when determining whether the contractor is a responsible source that has a satisfactory record of integrity and business ethics.  In addition, contractors will be required to represent to the contracting agency that subcontractors with subcontracts exceeding $500,000 will meet the new responsibility standards.

The Executive Order also contains a new paycheck transparency component.  Federal contractors on procurement contracts for goods and services, including construction, in excess of $500,000 are now required to give their employees information concerning hours worked, overtime hours, pay, and any additions to or deductions made from their pay.  This requirements must also be incorporated into certain subcontracts.  In addition, a contractor is also required to inform an individual in writing if they are being treated as an independent contractor, and not an employee.

The Fair Play and Safe Workplaces Executive Order also prohibits federal contractors with contracts in excess of $1,000,000 from entering into mandatory pre-dispute arbitration agreements with their employees or independent contractors to resolve complaints under Title VII of the Civil Rights Act or tort claims arising out of alleged sexual assault or harassment.  This requirement must also be incorporated into certain subcontracts.