Companies looking to secure contracts worth $500,000 (U.S.) or more with the U.S. federal government will now have to disclose past labour law violations to be considered, according to an executive order signed in late July by President Barack Obama.
The order also requires contractors to ask subcontractors to disclose similar information relating to employee pay, work hours, and health and safety violations, going back three years.
“Every year,” according to a White House backgrounder, “tens of thousands of American workers are denied overtime wages, not hired or paid fairly because of their gender or age, or have their health and safety put at risk by corporations contracting with the federal government that cut corners.”
The executive order will apply to new contracts beginning in 2016. The Department of Labor estimates there are about 24,000 businesses with federal contracts. These contractors employ an estimated 28 million workers.
Obama, during his signing of the order, said the new rules give an edge to companies that are treating employees fairly and taking worker safety seriously. “I don’t want those who don’t to be getting a competitive advantage over the folks who are doing the right thing,” the president said. “That’s not fair.”