Labor Department Issues Blacklisting Final Rule

Date: August 25, 2016

Executive Order To Add New Burdens For Businesses Looking For Federal Contracts


Following President Obama’s issuance of the Fair Play and Safe Workplaces executive order on July 31, 2014, the Labor Department and the Federal Acquisition Regulatory Council heard public comment on the proposal. This week, the agencies issued the final rule implementing the executive order, and the Washington Times reports that President Obama signed the final rule into law. The Fair Play and Safe Workplaces order mandates that firms “report past labor law violations to qualify for contracts with the federal government.” It mandates “disclosure of even minor violations that businesses or their subcontractors received in the previous three years for contracts worth more than $500,000.” Businesses argue the new regulation will “‘blacklist’ them from doing business with the federal government.” As National Association of Manufacturers President Jay Timmons told The Hill, this final rule means that “hardworking, responsible manufacturers could lose out on valuable job-creating work with the federal government for no good reason.” Bloomberg BNA also reports on the new requirement in the president’s “controversial executive order,” noting that the reporting change to the Fair Pay and Safe Workplaces executive order is a “huge development,” according to a lawyer for defense contractors. The article adds that the new guidance also extends the compliance timeline. U.S. Chamber of Commerce Executive Director of Labor Law Policy Marc Freedman said, “The administration recognizes the initial proposal had many problems.” He added, “They’ve tried to make this more acceptable and I think the big change in the subcontractor reporting provisions are a recognition that what they had initially put out was unworkable. I don’t think we’re prepared to say that this version of it is necessarily workable.”

What This Means For Small Businesses

Although some changes to the initial executive order were made prior to the final rule, at the end of the day the order still represents yet another barrier between businesses and job opportunities. Small businesses in particular can hardly afford to keep up with the added paperwork and regulatory red tape that this order implements. Rules like this make the playing field unfairly stacked against small businesses when competing for Federal contracts.

Additional Reading

The Hill covers the final rule in a second article.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

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