Posted by marykeating on February 27, 2010 under Government contractors, Wage and hour issues | 
Long a punch line, the idea that the government can step in and improve lives has its deep seated detractors. But the Obama administration is discussing using the federal government’s massive economic power to change the way workers are treated. According to a New York Times article, one in four workers is employed by a company with a federal contract.
One in four workers translates into more than a quarter of American families affected, since so many families have two wage-earners. The administration intends to scrutinize the procurement process, and favor companies with good records on labor and the environment, and those with good wage structures. Naturally this potential executive order has drawn fire. Critics contend that the cost of government contracts will increase, that union shops will be favored, and that many companies will drop out of contention. The article points out a Maryland study, however, that shows the opposite. When Maryland required contractors to pay a living wage (higher than minimum wage), more 
contractors placed bids. “Some higher-wage companies said they began seeking government bids because the new policy leveled the playing field.” In addition, the drain on government resources by the working poor would decrease. Moreover, some evidence indicates that the lowest paying contractors do not produce the same quality work as the companies that pay higher wages and provide employee benefits. No executive order has issued yet, and critics questioned whether legislation would be necessary to change the procurement process. The ramifications could be significant, however, in reversing the rising gap between the most and least affluent in this country.
Posted by marykeating on December 19, 2009 under Government contractors, Pending legislation, sexual harassment |
The Franken Amendment has passed the House and is expected to become law. Under the amendment to next year’s appropriations bill, contractors doing more than $1,000,000 of business with the federal government must agree not to require arbitration, rather than court, claims of discrimination, sexual assault, and other employment claims. Six months after the effective date of the law, the contractors are responsible for ensuring that their own subcontractors with jobs of more than a million dollars also abide by the law.
The amendment forbids mandatory arbitration on the following types of claims:
- any claim under title VII of the Civil Rights Act of 1964, and
- any tort related to or arising out of sexual assault or harassment, including assault and battery, intentional infliction of emotional distress, false imprisonment, or negligent hiring, supervision, or retention.
The law arose out of a horrendous situation involving a woman who was raped and terrorized overseas while working for an American company. The perpetrators worked for an American company, and our government. Her employment contract required her to arbitrate her claims, and limited her remedies. Senator Franken’s amendment forbids companies from imposing this waiver of rights on people working as employees or independent contractors on major goverment contracts.
Posted by marykeating on September 13, 2009 under Government contractors |
The United States Chamber of Commerce tried and failed to convince the United States District Court for the District of Maryland to issue an injunction against the implementation of the e-verify system. The Fourth Circuit just refused to overturn the decision. That means that most government contractors will now include in their contracts clauses requiring that new and existing employees pass the e-verify test. The idea is to confirm citizenship or legal working status before the employee can be paid under the government contract.
So, why did the Chamber of Commerce object to this? One complaint, of course, is the cost of doing the verification in time and training. Employers need to keep the same paper records as before, but now have to supplement with the e-verify checking. At first, all government contracts of $3,000 or more would be required to comply. Now the threshold is $100,000 for prime contracts, but subcontractors of $3,000 or more must agree to confirm the legal status of their employees. Secondly, the Chamber challenged the “requirement” of using the e-verify system itself. The Court held that because the regulation applies only to government contractors, it remains voluntary. The companies can choose not to do business with the government, and in that way can avoid the e-verify system. Third, the e-verify system tosses up a fair amount of false problems. Perfectly legal employees are flagged by the system, causing more time and effort to fix. Think the first couple of years after 9/11 at airports, when lots of people were stopped for reasons the airports were not allowed to reveal.
Since the regulation is now in effect, here is what it requires. A contractor has to enroll in the e-verify program within 30 days of the contract award, and then check everyone who will work on the contract within 90 days after that. Contractors already in the program must run the check within 30 days. Employers have to check new hires within three days of their hire.
Given the Court’s analysis, the fear that the e-verify system will spread to the entire universe of United States workers is premature. The use of the system will require congressional action, not just a presidential executive order.
