The 2014 Fair Pay and Safe Workplaces order took effect Oct. 25 last year and required mandatory disclosure of labor law violations from all federal contractors with contracts equal or greater than $50 million.
The Society For Human Resource Management (SHRM) had lobbied against the order when it first came out, noting that “the regulations add significant new reporting burdens on federal contractors, expose them to unclear standards, and improperly add debarment as a new penalty to existing federal labor and employment statutes.”
Trump’s revocation of the order on March 27 also killed two rules that benefited women: requiring paycheck transparency and banning forced arbitration clauses for sexual harassment and assault or for discrimination claims, NBC News reports.
The impetus for the order came after a 2010 Government Accountability Office (GAO) investigation uncovered that widespread violators were still receiving millions in federal contracts. The GAO revealed that of the 50 worst wage theft violators from 2005 to 2009, 60% had won contracts even after being penalized by the U.S. Department of Labor (DOL).
Trump’s action “essentially forces women to pay to keep companies in business that discriminate against them, with their own tax dollars,” says Noreen Farrell, director of Equal Rights Advocates, an anti-sex discrimination law firm. “It’s an outrage.”
But SHRM in a statement called the Obama order a “blacklisting rule” and praised Trump and the Republican-controlled House and Senate for killing it. “While HR professionals diligently focus on compliance with federal and state laws, confusing and complex regulations—like many aspects of the Family and Medical Leave Act and the Fair Labor Standards Act—mean that even the best employers can run into compliance challenges,” SHRM noted in its March 27 statement.
“The federal government already has systems in place to ensure that employers who disregard federal laws are prevented from winning contracts. These regulations, however, would have unfairly denied many employers the opportunity to compete for federal contracts,” SRHM noted.
But proponents of Obama’s order say that calling it a “blacklisting rule” unfairly demonizes it and was used as a tactic to garner support from Republican lawmakers, the Huffington Post reports.
The Obama order would have required disclosure of labor violations dating back three years and cover collective bargaining, civil rights, health and safety and minimum wage and overtime. And of the 14,000 contractors that would be subject to the order yearly, “only a small share of these companies is expected to have reportable violations, and even fewer are expected to have serious, repeated, willful, or pervasive violations to report,” the DOL had noted.
Quashing the order essentially allows businesses with federal contracts to force sexual harassment cases into secret hearings and shield the companies from public exposure about such incidents, NBC News reported. The Obama order also would have required employers to provide details on employee earnings, pay scales, salaries and other details, which could have given women information to know if they were receiving equal pay.
"At the bottom, there's just so far down women's wages can go. They are protected by some degree by the minimum wage," said economist Elise Gould. "But as you move up, women are not occupying places at the top the way men are. The wage gap at the top is much larger."