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Industry groups blast new rule on labor-law compliance

A pair of national construction-industry groups are slamming the final guidelines that have been attached to federal rules meant to keep more contractors in compliance with labor laws, arguing the result will be “unfair and arbitrary punishment.”

The U.S. Department of Labor and Federal Acquisition Regulatory Council, a body that oversees procurement policies and regulations, released various guidelines on Wednesday explaining how federal agencies are supposed to carry out the so-called Fair Pay and Safe Workplaces executive order. That order, signed by President Barack Obama in 2014, requires federal contractors to disclose certain types of labor-law violations and then provides advice on how much influence the violations should have over decisions to award federal contracts.

When fully phased in, the new rule will require federal contractors to tell government officials every time they become aware of infringements of any of 14 different types of workplace protections. A report will have to be made for any violation occurring within the previous three years.

The specific workplace protections being targeted include those dealing with wages and work hours, safety and health, collective bargaining, family and medical leave and civil rights, according to a news release.

Thomas Perez, secretary of the Department of Labor, said the new rule will give federal contractors further reason to comply with labor laws. It will also prevent the majority of contractors who consistently follow labor laws from being at a disadvantage to cheats.

“Federal contracts should deliver value for taxpayers in a way that is consistent with our nation’s values,” Perez said in a written statement. “Contractors that illegally cut corners at the expense of their workers should not benefit from taxpayer-funded federal contracts.”

Not all see the same merits, though. A representative of the Associated General Contractors of America, a large industry group, said the new rule will enable federal officials to punish firms arbitrarily.

“The last thing any of our members want is to compete against a firm that cuts corners on safety or fails to properly compensate hard working craft people,” Stephen Sandherr, chief executive of AGC of America, said in a statement.

That said, Sandherr added, “this new Obama administration rule is a step in the wrong direction when it comes to weeding out the very few unfair and unscrupulous federal contractors.”

He argued the rule will give unelected bureaucrats far too much power to decide which firms should be singled out for punishment. Officials who don’t like a particular company because of the owners’ political leanings will suddenly have a convenient excuse for not awarding a contract.

Brian Turmail, an AGC of America spokesman, said the rule lets officials decide what the punishment should be for any particular infringements of labor rules. Contractors who break the exact same labor laws could find themselves suffering vastly different consequences.

Turmail said the governments’ previous suspension and debarment polices were serving their purpose and were in no need of improvement.

“This is solving a problem that doesn’t exist,” he said, later adding that, “frankly, this is Kafkaesque.”

The new final rule will officially take effect on Oct. 25. But rather than being in full force immediately, it will be rolled out in phases to give contractors time to adapt to their new obligations, according to a Department of Labor news release.

About Alex Zank, [email protected]

Alex Zank is a construction reporter for The Daily Reporter. He can be reached at 414-225-1820.

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