Executive Order Will Increase Accountability on Companies to Protect Workers’ Rights

By Catherine Singley Harvey, Manager, Economic Policy Project, NCLR

On July 31, President Obama took a firm stance in defense of workers’ rights by issuing an executive order calling for additional scrutiny in the federal contracting process to weed out the worst violators of basic labor laws. Under the new order, companies applying for large federal contracts must disclose any violations of labor laws that occurred during the last three years. Considering a company’s compliance record in the competitive bidding process will ensure that corner-cutting businesses do not gain an advantage over firms that play by the rules. The order also stipulates that contractors receiving awards of more than $1 million should not force employees to sign an agreement when they are hired saying they will settle out of court in cases of sexual harassment and workplace discrimination.

The existing laws covered by the executive order include minimum wage and overtime pay, occupational safety and health, nondiscrimination in employment, family and medical leave, and migrant and seasonal farmworker protections. While Latino-owned businesses are underrepresented in federal procurement, Latino workers employed by federal contractors stand to benefit from this new guidance. Workers in industries where the government footprint is large can also expect spillover benefits; the federal government indirectly supports nearly two million jobs in industries where Latinos are overrepresented compared to their share of the overall workforce, which is 16 percent. These industries include restaurant and food service (24.4 percent Latino), construction (25.5 percent Latino), apparel manufacturing (38.6 percent Latino), and services to buildings and dwellings (39.9 percent Latino).

While the potential reach of the new executive order is broad, we need federal agencies like the Department of Labor to do more to root out bad actors that violate labor laws and help the majority of businesses who want to follow the rules do so fully. Furthermore, many of the laws protecting workers were created decades ago when our economy was very different. It’s time for Congress to bring those laws into the 21st century to meet the needs of our modern, multilayered workplace. From raising the federal minimum wage to expanding protections for temporary and contingent workers, NCLR is committed to working with policymakers to bring about these essential changes.

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