March 06, 2017

Van Hollen Statement on Resolution To Disapprove of the Fair Pay Rule

U.S. Senator Chris Van Hollen submitted the following statement to the congressional record in opposition to the Resolution to Disapprove of the Fair Pay Rule:

"Mr. President, over the years, Congress has enacted laws to make workplaces safer and fairer and to raise wages for American workers. These laws protect American workers. These laws make America more productive. And these laws help to preserve good, safe, middle-class jobs.

"The Fair Labor Standards Act introduced the 40-hour workweek, established a national minimum wage, and guaranteed time-and-a-half for overtime. The Occupational Safety and Health Act ensures that employers keep the workplace free from hazards like toxic chemicals, excessive noise levels, mechanical dangers, or unsanitary conditions. The Civil Rights Act of 1964 prohibits discrimination by employers because of race, color, religion, sex, or national origin. The Americans with Disabilities Act prohibits unjustified discrimination based on disability, and the Rehabilitation Act of 1973 requires affirmative action to employ qualified individuals with disabilities. The Age Discrimination in Employment Act forbids employment discrimination against older workers. The Vietnam Era Veterans' Readjustment Assistance Act requires equal opportunity and affirmative action for veterans. The Equal Pay Act addressed wage disparities based on gender. The Family and Medical Leave Act requires covered employers to provide employees job-protected unpaid leave for qualified medical and family reasons. The Davis-Bacon Act requires paying the local prevailing wages on public works projects. And the National Labor Relations Act protects the rights of private sector employees to organize into trade unions, engage in collective bargaining for better terms and work conditions, and take collective action including strike if necessary.

"These laws are already on the books. It's already against the law for Federal contractors to violate them. The obligation to comply with basic workplace protections applies to employers, whether they are government contractors or not. And that obligation will remain in force regardless of what Congress does on the rule today.

"At issue today is a rule that simply requires contractors to share information about their history of compliance with workplace protections in the last 3 years before getting a Federal contract. The rule does not impose any new compliance obligations on Government contractors.

"It has long been a tenet of Federal Government contracting that it's better to contract with responsible contractors that abide by the law, including labor laws. It also furthers economy and efficiency. Many studies find a strong correlation between labor law compliance and performance. One study found that from 2005 to 2009, one quarter of the companies that committed the top workplace violations and later received Federal contracts had significant performance problems on their contracts. It's not surprising that employers that abide by the law also do a better job on their contracts.

"In the mid-1990s, however, the Government Accountability Office, then known as the General Accounting Office, found that the Government had awarded Federal contracts worth more than $60 billion to companies that had violated the National Labor Relations Act or the Occupational Safety and Health Act. More than 10 years later, the GAO found that the pattern continued. GAO found that almost two-thirds of the largest wage-and-hour violations and almost 40 percent of the largest workplace health-and-safety penalties issued between 2005 and 2009 were made against companies that went on to receive new Government contracts. Between 2007 and 2012, 49 Federal contractors responsible for large violations of Federal labor laws were forced to pay more than $91 million in back wages.

"To help address this problem, in August of last year, the Department of Defense, the General Services Administration, and NASA jointly issued the rule that we are talking about today. The rule amended the Federal Acquisition Regulation to implement Executive Order 13,673 on Fair Pay and Safe Workplaces. That Executive Order was designed to increase efficiency and cost savings in Federal contracting by increasing contractor compliance with labor laws. At the same time last August, the Department of Labor issued guidance to help Federal agencies implement the Executive Order and the rule.

"The rule also prohibited companies with contracts larger than $1 million from denying employees who are the victims of sexual assault, sexual harassment, or discrimination their day in court by forcing them to arbitrate these claims.

"The rule helps to provide a level playing field for businesses that play by the rules. By requiring disclosure of violations, it encourages contractors to pay fair wages and provide safe workplaces. The rule helps to ensure that the Government awards Federal contracts and the taxpayer dollars that fund them to responsible employers that comply with workplace safety laws, antidiscrimination laws, sexual harassment laws, and minimum wage and overtime laws. Without the rule, millions of taxpayer dollars would go to businesses that break these laws.

"After my home state of Maryland implemented a living wage standard for contractors, the average number of bids for state contracts actually increased by nearly 30 percent. Nearly half of contractors interviewed by the state government said that the new standards encouraged them to bid, because the standards leveled the playing field.

"Under the Federal rule, prospective contractors report the information themselves. The vast majority of contractors adhere to labor laws. If a prospective contractor does not have any violations, it simply checks a box.

"Companies that do business with the Government employ one in five Americans, so this rule improves the lives of millions of workers.

"In September of last year, Donald Trump delivered a speech on jobs at the New York Economic Club. In that speech, Mr. Trump advocated what he called "a new policy of Americanism." "Under this American System," Mr. Trump said, "every policy decision we make must pass a simple test: Does it create more jobs and better wages for Americans?"

"The rule at issue today passes that test. It helps to create better wages for Americans. And repealing the rule would flunk the test that Mr. Trump laid out last year.

"Nonetheless, once again, the Republican majority seeks to employ the blunt instrument of the Congressional Review Act to repeal that rule today.

"Some critics label the Fair Pay rule as a "blacklisting" rule. But the rule does not require a contracting officer to deny any contract based on a history of labor violations. The rule simply provides information to contracting officers to help them make decisions that about whether a contractor is responsible. The goal of the rule is to encourage companies to come into compliance - not to bar them.

"Enacting this Congressional Review Act disapproval resolution could effectively stop any new rules on the disclosure of labor law violations or the consideration of labor law violations as a requirement for Federal procurement contracts. Enacting this resolution will send the wrong message to companies who are tempted to skirt the law. And enacting this resolution will make it more likely that Federal dollars once again go to law-breaking contractors.

"This resolution goes in the wrong direction. And thus I oppose it."