‘Fair Pay and Safe Workplaces’ Proposal Released; Most Banks Not Covered

On May 28, the Labor Department, the Defense Department, the General Services Administration, and NASA jointly published proposed requirements and related guidance implementing President Obama’s “Fair Pay and Safe Workplaces” Executive Order 13673. The stated objective of the Executive Order and the proposal is to ensure that federal agencies contract with organizations which comply with federal and state workplace laws. Among other things, the proposal would require covered federal contractors to disclose violations of 14 different labor laws which have occurred within the past three years.

The various executive orders issued by the Obama Administration with different definitions of federal government contractor are definitely creating confusion. Thus, it is important to look specifically at how the term “federal contractor” is defined in each executive order and the statutory authority under which it is issued.

Banks are federal contractors generally because they have TT&L accounts or redeem savings bonds, thus triggering coverage under the affirmative action Executive Order 11246. We note that OFCCP asserts in an FAQ that FDIC insurance is a federal contract, although ABA disagrees with that position. However, under the Fair Pay and Safe Workplaces Executive Order and implementing proposal, “federal contractors” are organizations which enter into “procurement contracts” with a federal agency to supply goods or services to the federal agency. The Executive Order applies to these procurement contracts with an estimated value of the supplies acquired or the services required which exceeds $500,000.

According to Steve Greene, managing member of the law firm of Helms & Greene and founding partner of Employment Law Compliance, given terminology contained in the Executive Order and in the proposed regulations, the contemplated procurement contracts would not extend to TT&L accounts, savings bond activities or relationships with the FDIC. As with other Executive Orders triggered by procurement contract language, Greene believes that most banks are not subject to these new terms. We will review this issue again when the final regulations are released.