Trump Nullifies Fair Pay and Safe Workplaces Rule For Federal Contractors

The pushback against social justice regulations passed under former U.S. President Barack Obama is in full force. This week incoming President Donald Trump signed a bill into law that essentially rolls back an Obama-era rule requiring companies to disclose labor law violations. It also prevented violating companies from receiving federal contracts.

The Obama-era executive order, called the Fair Pay and Safe Workplaces rule, pertains to federal contracts of $500,000 or more. On its face, the rule was designed to promote “economy and efficiency in procurement by contracting with responsible sources who comply with labor laws.” Obama signed it into law in 2014.

Trump’s statement on administration policy last month characterized the rule and other Obama-era regulations as “unnecessary and burdensome processes that would result in delays and decreased competition for federal government contracts.” He also claimed that rolling back the rule would “help to reduce costs in federal procurement.”

“The rule simply made it too easy for trial lawyers to go after American companies and American workers who contract with the federal government,” White House press secretary Sean Spicer said during a press conference on Monday.

Despite Trump’s campaign promises to help American workers, the president “continues to lard favors on corporate interests, in more of the corrupt inside-dealing he campaigned against,” Robert Weissman, president of Public Citizen, said in a statement . “Trump and congressional Republicans may not be able to join together to roll back health insurance, but when it comes to rolling back protections for the American people from predatory corporations, they know how to work together.”

“Every worker deserves strong protections on the job,” added Teamsters General President Jim Hoffa. “This is a very disappointing development since the Fair Pay and Safe Workplaces Executive Order not only protected workers at federal contractors, but ensured that our tax dollars were not going to be given to companies that violate labor law.”

Several reports found numerous health, safety and wage violations by federal contractors. In 2013, about 40 percent of all federal contracting dollars went to federal contractors with health, safety or wage violations, a report by the think tank Demos found.

Between 1999 and 2013, contractors were fined almost $722 million for serious health, safety and employment law violations. During the same time period, violations of minimum wage laws amounted to anywhere between $8.6 billion and $13.8 billion in lost wages every year. And Americans working for federal contractors lose between $1.6 billion to $2.5 billion a year from minimum wage law violations, the think tank concluded. 

About 22 percent of the American workforce is employed by companies that have at least one federal contract, according to a report compiled by Massachusetts Democrat Elizabeth Warren’s staff. And according to the senator's report, over 300,000 workers have been “victims of wage-related labor violations working while working under federal contracts in the last decade.”

Those men and women worked for almost 12,000 different companies that receive federal contracts. Over 600 companies have been caught violating wage-related contractor laws multiple times, Warren's team concluded, and in some cases the violations affected several thousand workers. Many of those repeat offenders continued to receive millions of dollars in taxpayer-funded contracts. Warren's office also cited violations of safety and health standards that caused a “wide range of physical harm to workers.”

The U.S. federal government pays over $500 billion in taxpayer money to private companies for services and goods every year, and much of that pays the salaries of millions of workers. But many of these employers violate the law: A 2013 Senate analysis found that nearly 30 percent of the top federal wage and safety law violators were federal contractors.

Eighteen federal contractors received one of the largest 100 penalties from the Occupational Safety and Health Administration (OSHA) between 2007 and 2012. Nearly half the total initial penalty dollars assessed for OSHA violations were against companies that held federal contracts in 2012. During that period, 42 American workers died as a result of OSHA violations by companies holding federal contracts.

The message that Congress and Trump are sending to the American people by rolling back an Obama-era rule that prevents violators of health, safety, and labor violations from receiving federal contracts is that only business interests matter. The needs of the American people take a back seat with this administration and with this Congress. 

Image credit: Flickr/Gage Skidmore