A new report issued by the Senate Health, Education, Labor & Pension Committee’s (HELP), Acting Responsibly? Federal Contractors Frequently Put Workers’ Lives and Livelihoods at Risk, focuses the spotlight on federal contractors’ compliance with labor laws including the Occupational Safety & Health Act, and the results are not pretty.
The review of 5 years of compliance data reveals that some of the nation’s largest federal contractors fail to pay their workers the wages they have earned or provide their employees with safe and healthy working conditions. The analysis found that almost 30 percent of the top violators of federal wage and safety laws are also current federal contractors. Eighteen federal contractors were recipients of one of the largest 100 penalties issued by OSHA between 2007 and 2012. Almost half of the total initial penalty dollars assessed for OSHA violations were against companies holding federal contracts in 2012.
In addition, 42 workers died during this period as a result of OSHA violations by companies holding federal contracts and 35 of these companies violated both wage and safety laws. Overall, the 49 federal contractors responsible for large violations of federal labor laws were cited for 1,776 separate violations of these laws and paid $196 million in penalties and assessments. In fiscal year 2012, these same companies were awarded $81 billion in taxpayer dollars.
The study included construction contractors engaged in federally funded projects, and the publicly available report lists, by name and amount of violation penalties, the key offenders involved in the top 100 OSHA violation cases between 2007 and 2012. This could impact the companies’ abilities to obtain new contracts, as well as influencing their ratings for other competitive bidding on private sector work.
The report was released on December 11, 2013, by Sen. Tom Harkin (D-IA), committee chairman. It is the result of a year-long investigation by HELP Committee majority staff and identifies the shortcomings of the current federal contracting process, while offering a list of solutions to remedy these problems and ensure that taxpayer dollars are spent in a way that promotes compliance with federal law and improves the quality of life for working Americans. The 59-page report (with a nearly 450-page appendix that includes specific detailed information for each federal contractor) is available at: www.harkin.senate.gov/documents/pdf/52a876b0e4d63.pdf.
“These findings are deeply troubling: Almost 30 percent of companies with a significant violation of basic labor laws are federal contractors, and tens of thousands of American workers are paying the price—through shortchanged paychecks, with their safety, or, sadly, with their lives,” Senator Harkin says. “Not only are these contractors violating labor laws time and time again, but our federal contracting system has virtually no reliable tools in place to ensure that these violations of the law are ever considered before a contract is awarded.” By law, the government is only supposed to contract with companies that it first determines to have a “satisfactory record of integrity and business ethics.”
While each violation of OSHA requirements is not detailed for each company involved, the report examines the involvement of federal contractors in the agency’s “Severe Violator Enforcement Program” (SVEP). SVEP targets companies with willful or repeated serious violations of health and safety standards. The SVEP list includes companies who have demonstrated recalcitrance or indifference to their Occupational Safety and Health Act obligations by committing willful, repeated, or failure-to-abate violations in fatality or catastrophe situations, in “High-Emphasis Hazards” sectors, where employees have potential exposures to highly hazardous chemicals, or where the employer has been subject to an egregious enforcement action.
The Senate report expresses concern that the SVEP status is not currently being considered in ongoing bids for federal contracts by these companies. It found no evidence that any agency has acted to make a determination that a specific contractor is not a responsible entity or to suspend or debar any of these firms as a result of their status as a severe violator of workplace health and safety laws. However, this can be expected to change as a result of the report and implementation of its recommendations in the future.
The Department of Labor is also responsible for ensuring that federal contractors (and, indeed, all employers) pay employees appropriate wages and overtime, as well as required benefits under the Fair Labor Standards Act, the Davis-Bacon Act, and the Service Contract Act. The Wage and Hour Division of the Department of Labor investigates claims that employees are being improperly compensated (or that workers are misclassified as independent contractors rather than regular employees) and enforcement actions can result in back pay awards. Many such violations were found by the Senate investigation. So, violation of any of these laws in the future, as well as the track record of OSHA compliance, may lead to debarment proceedings in the future.
The report identifies the following areas of improvement and action items:
- Improve the quality and transparency of Department of Labor information regarding violations of federal law.
- Publish an annual list of federal contractors that were assessed penalties or other sanctions, and as well as additional information concerning contractor compliance with labor law, by the Department of Labor.
- Improve contracting databases administered by the General Services Administration, including increasing public transparency and expand the amount of misconduct information included in those databases.
- Issue an Executive Order requiring contracting officers to consult with, and obtain recommendations from, a designated official at the Department of Labor about violations of federal labor law when making responsibility determinations.
- Develop an Executive Order to establish additional tools—beyond the existing responsibility determination and suspension and debarment process—that contracting officers, in consultation with the Department of Labor, can use to ensure that contractors comply with federal labor law. ■
About the Author:
Adele L. Abrams, Esq., CMSP, is an attorney and safety professional who is president of the Law Office of Adele L. Abrams PC, a ten-attorney firm that represents employees in OSHA and MSHA matters nationwide. The firm also provides occupational safety and health consultation, training, and auditing services. For more information, visit www.safety-law.com.
Modern Contractor Solutions, January 2014
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