Recent Executive Orders Impose New Restrictions on Government Contractors

September 18, 2014

This week, the U.S. Department of Labor issued a request for public comment on proposed rules relating to a recent Executive Order that imposes new requirements on government contractors.

Executive Order (EO) 13665 prohibits contractors from taking adverse actions against employees who discuss their compensation or the compensation of coworkers. The EO aims to decrease the salary disparity between men and women employees by allowing employees to discuss compensation with their colleagues. In its request for public comment, the Department of Labor lists various potential contractor benefits from the new rule, but also concedes that the rule will result in contractors paying increased wages to employees.

The new proposed rules highlight not only EO 13665, but several other recent EOs that create significant new obligations for contractors. Last month, the White House issued another EO requiring contractors to track and self-report adverse employment decisions. Under the rules to be issued pursuant to the EO, prime contractors will be responsible for checking the labor violation history of their subcontractors. Agency procurement officials will be given authority to debar contractors based on the number of labor violations listed in the reports – to be filed at a new government website created and maintained by the GSA.

Finally, the White House recently amended EO 11246 to add sexual orientation and gender identity to the list of grounds on which contractors are prohibited from discriminating. The new EO also requires that all federal contractors maintain policies forbidding discrimination against employees based on sexual orientation or gender identity.