Two Executive Orders signed recently by President Barack Obama will further regulate how federal contractors hire, recruit, and promote employees, and require additional disclosures to employees and others related to violations of employment laws and payroll information, among other mandates.

Under the amended version of Executive Order 11246, promulgated on July 21, 2014, contractors transacting more than $10,000 per year with the federal government will soon be prohibited from discriminating against employees or applicants on the basis of sexual orientation or gender identity. The protected categories included in the order prior to the amendment mirrored those currently in Title VII of the Civil Rights Act (“Title VII”), which forbids employment discrimination based on religion, national origin, race, color, and sex.

Compliance will likely require employers subject to the order to seek counsel and review current contracts, anti-discrimination and anti-harassment policies, and the language in employment applications, job advertisements, and other similar documents.

Regulations consistent with the Obama Administration’s amendment to the order will be implemented within ninety days of the order’s issuance. The new rules will likely require covered contractors to file compliance reports and create and carry out written affirmative action plans showing that the employer is actively recruiting and hiring diverse employees. Contracts entered into on or after the effective date of the regulations will be impacted.

Notably, there are no religious employer exemptions under the order. The directive does, however, leave intact President George W. Bush’s 2002 amendment which permits certain religiously-affiliated corporations, associations, educational institutions, or societies to favor individuals of a particular religion when making employment decisions.  Whether this would permit denial of employment on the basis of sexual orientation is uncertain under the order.

To view the order, visit http://www.whitehouse.gov/the-press-office/2014/07/21/executive-order-further-amendments-executive-order-11478-equal-employmen.  Information related to the order as it existed prior to the Obama Administration’s amendment can be accessed on the U.S. Department of Labor’s website at http://www.dol.gov/ofccp/regs/compliance/ca_11246.htm.

A second Executive Order, promulgated on July 31, 2014, will require certain federal contractors to publicly report employment law violations, refrain from the use of mandatory arbitration agreements, and provide employees with additional payroll information. The effect of this order is to provide government agencies, labor unions, and plaintiff’s attorneys with enhanced means to pursue litigation and other actions against federal contractors that are out of compliance with federal and state employment laws.  

On procurement contracts for goods and services exceeding $500,000, the order requires employers to report all labor and employment law violations occurring in the past three years. “Violations” include an administrative merits determination, arbitral award, or civil judgment. The laws covered include several federal and parallel state statutes, including the Fair Labor Standards Act, Occupational Safety and Health Act, National Labor Relations Act, Family and Medical Leave Act, Title VII, Americans with Disabilities Act, Age Discrimination in Employment Act, as well as Executive Order 11246 (as recently amended). During performance of the contract, contractors must update the information provided every six months. If violations occur while a contract is in place, the U.S. Department of Labor may require the contractor to agree to remedial or other measures, such as termination of the agreement or referring the contractor for suspension.

Additionally, some contractors are restricted from using mandatory arbitration to resolve claims arising under Title VII or arising out of alleged sexual harassment without voluntary consent of the employee or independent contractor after the dispute arises. This section is not applicable to employees covered by a collective bargaining agreement or contracts secured prior to the order’s issuance.

Finally, some contractors will be required to provide a document to employees showing hours worked, overtime hours, pay, and any additions or deductions from pay. This provision does not apply to employees exempted from overtime requirements under federal law, provided the employer has informed the individual of his or her exempt status.

To view the order, visit http://www.whitehouse.gov/the-press-office/2014/07/31/executive-order-fair-pay-and-safe-workplaces.  The Obama Administration’s fact sheet on the order can be accessed at http://www.whitehouse.gov/the-press-office/2014/07/31/fact-sheet-fair-pay-and-safe-workplaces-executive-order.