Obama order requires potential federal contractors to disclose labor violations

President Obama signed an executive order Thursday that requires prospective federal contractors to disclose labor law violations for the past three years before they can get a contract.

“While the vast majority of federal contractors play by the rules, every year 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,” said the White House in a statement.

The executive order, which governs new federal procurement contracts valued at more than $500,000, covers 14 federal statutes and equivalent state laws that address wage and hour, safety and health, collective bargaining, family and medical leave and civil rights protections, according to the statement.

Besides requiring the contractors disclose past labor violations, the order also gives agencies more guidance on how to consider labor violations when awarding federal contracts.

Among other provisions, the executive order says for contracts valued at more than $1 million, claims arising under Title VII of the Civil Rights Act of 1964 or related to sexual assault or harassment may only be arbitrated with employees’ voluntary consent after the disputes arise.

The executive order is expected to be implemented for new contracts in stages, on a prioritized basis, during 2016.

There are about 24,000 businesses with federal contracts employing about 28 million workers, according to the U.S. Department of Labor, the White House said.