The New York Times just reported that President Obama will sign an Executive Order requiring companies to disclose recent wage and hour law violations (within the past three years), and will then encourage agencies not to contract with companies that violate these laws.
This likely means that the online representations and certifications that contractors complete through the System for Award Management (www.sam.gov) will be updated to require disclosure of violations of, for example, the Service Contract Act (SCA), the Davis Bacon Act, the Walsh-Healey Public Contracts Act, and the Fair Labor Standards Act (FLSA).
And the Executive Order is likely to include the potential for debarment. The language used by the New York Times is that, after these violations are reported, “government procurement officials [are] then being advised to steer clear of those with repeated and egregious violations.” But that cannot happen under current law without formal debarment proceedings.
WHAT THIS MEANS: Contractors with wage and hour violations in the past several years will have a brief period to get their houses in order before these violations must be reported. In the past, the Department of Labor had — but did not often exercise — jurisdiction over debarments for these violations. Now, with more widely available certifications, far more debarment referrals and considerations are likely to occur. Any contractor with wage and hour violations should consider using this period wisely by engaging counsel to review and update policies and procedures, plan a mitigation strategy, and in extreme cases, consider whether a proactive visit to their Debarring Official is in order.