As he gets ready to put Americans to work on big-league federal projects, President Trump seeks to cut “burdensome red tape” for federal contractors. But that might mean cutting a few fingers and toes, too. That’s because Trump has repealed an Obama administration executive order ensuring fair pay and safety standards for workers contracted for government projects. So the workers Trump wants to supposedly rebuild bridges and highways will be working under a regulatory regime that’s now more likely to ease up on abusive employers in “public-private partnerships.”
Despite exaggerated criticisms that the executive order would unfairly burden corporations, the 2014 Fair Pay and Safe Workplaces rule was not a major policy change. It simply required that firms bidding for large federal contracts in services like food vending or construction disclose past labor violations. Trump’s repeal seals a congressional rollback on a basic Obama administration measure, which had already been partially hobbled in court last October by business groups that challenged the rule.
Though industry lobbyists’ claimed the requirement to disclose labor violations amounted to “blacklisting,” the rule wouldn’t actually bar an agency from contracting with any firm that had such a record. Instead, it would subject a massively under-regulated sector—which includes influential multinationals like Lockheed Martin and AT&T and encompasses a fifth of America’s workers—to greater scrutiny. The basic concept, as Christine Owen of National Employment Law Center explains, is “the commonsense proposition that businesses profiting from the receipt of federal contracts should demonstrate that they follow the law.”
Many don’t. According to a Demos analysis, “Approximately 40 percent of all federal contracting dollars in 2013 went to contractors with health, safety or wage violations on their record.” A 2016 report by Senator Elizabeth Warren’s office revealed that in fiscal 2015, two-thirds of the 100 largest federal contractors broke federal labor law. Based on federal labor data, “More than 300,000 workers have been the victims of wage-related labor violations while working under federal contracts in the last decade” in projects involving 12,000 companies.
Contractors may now find it easier to conceal a record of harming workers. Warren’s report cites health and safety violations ranging from industrial accidents killing workers at a Virginia Goodyear tire plant, to Mississippi firm Fraser Shipyards exposing workers to dangerous levels of lead and asbestos, according to the Occupational Safety and Health Administration, “after willfully failing to conduct lead monitoring” and leaving workers in an engine room that led to lead poisoning for roughly three in four workers later tested.
Even a few weeks of being underpaid could make a huge difference for low-wage workers. As Washington Post columnist Catherine Rampell noted, the roughly $247 million stolen from 240,000 contractors in 2015, or $1,000 on average per worker, is worth a week’s pay for a typical janitor or cafeteria worker.
More than 670 cafeteria workers at the Capitol, according to Demos, were cheated out of $1 million by Congress’s food-service contractors, for example, and their regular wages are already so low they’ve been known to rely on public benefits or even stumble into homelessness.
Of course, critics say the original order was fairly weak, in the context of the size and complexity of an unaccountable government supply chain: It did not take into account how many violations are never detected or reported, and the Labor Department remains severely underfunded, so enforcement tends to be weak overall. Moreover, the regulation applied only to contracts worth $500,000 or more and provided exemptions for subcontractors.
According to Celeste Monforton, an occupational-health expert at George Washington University, “very few employers have been subject to OSHA citations—even though they may have a terrible safety program—so they would have nothing to disclose.” To get beyond merely disclosing problems, she notes that Trump’s repeal of the Fair Pay executive order could portend a much deeper wave of regulatory rollbacks for contractors. A pending legal challenge against another Obama administration rule, mandating companies’ reporting of injury data, could also lead to the rule getting struck down, and Trump could simply opt to go easy on the defense and let the industry win the case. Going forward, as it barrels through with major construction projects from the Keystone XL pipeline to his proposed $1 trillion infrastructure plan, which focuses heavily on construction jobs, Monforton predicts, “It is very likely that OSHA will have a smaller budget moving forward, so that will certainly limit even further its ability to conduct inspections.”
Given the statistical rarity of documented violations—and facing even further withering of enforcement and reporting requirements—the Fair Pay rule intensified scrutiny of disclosures in important ways: Contractors would be assessed on whether, according to Senator Warren’s report, the violations were “‘serious, repeated, willful, or pervasive,’ and how they figure into an agency’s determination of responsibility or indicate a lack of integrity or business ethics.”
All Obama’s executive order asks is that government workplaces lead by example. This standard for integrity in contracting encourages more efficient and effective leveraging of government purchasing power, and aligns with Obama’s other rules for contract workers—strengthening discrimination protections for LGBT and pregnant workers, raising minimum wages for contract workers above the federal minimum, and providing over a million contract workers paid sick leave, which is currently denied to nearly half the nationwide workforce—all regulations that Trump could now destroy.
When contractors are allowed to become serial labor-law violators, that also sends a message: systematic labor violations not only amount to theft of taxpayer dollars through contracts, but robs billions from taxpaying federal workers on the other end, through their paychecks. In 2015 alone, back wages paid by the top violator totaled over $64 billion. And that is likely just a fraction of the total problem. Although basic whistleblower protections for contract workers have been strengthened through recent reforms, many low-wage workers, typically hired on non-union temporary contracts, may fear retaliation if they report violations, or simply believe, according to surveys, “a complaint would not make a difference.”
Getting robbed of your wages by a crooked boss is one thing; it’s another when your tax dollars pay them as they steal from you.