Investigation Represents the First Comprehensive Report to Connect Dots Between Federal Contracts and Labor Law Violations
Forty-Nine Contractors Engaging in Significant Labor Law Violations Received $81 Billion in Taxpayer-Funded Contracts in 2012 Alone
WASHINGTON, D.C.—An investigation into the federal contracting process unveiled today by U.S. Senator Tom Harkin (D-IA), Chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee, revealed widespread labor law violations among major government contractors. The investigation found that almost 30 percent of companies receiving the highest penalties for violations of federal labor law are also federal contractors. Specifically, the 49 federal contractors accountable for large-scale labor law violations were responsible for almost 1,800 separate enforcement actions taken by the Department of Labor and paid $196 million in back wages and initial penalties over a recent six-year period.
The report shows that these 49 contractors received more than $81 billion in taxpayer dollars in 2012 alone, and demonstrates that the current federal contracting process fails to hold contractors accountable for major or repeated labor law violations. Harkin unveiled the report today during an address at the Center for American Progress Action Fund titled “How the Federal Contracting System Harms Workers and Taxpayers.”
The report, titled “Acting Responsibly? Federal Contractors Frequently Put Workers Lives and Livelihoods at Risk” is the result of a year-long investigation by HELP Committee majority staff. It identifies the shortcomings of the current federal contracting process and offers a list of solutions to remedy these problems to ensure that taxpayer dollars are spent in a way that promotes compliance with federal law and improves the quality of life for working Americans. These recommendations include administrative actions by the Department of Labor (DOL) and the Government Services Administration (GSA), coupled with a White House Executive Order.
“These findings are deeply troubling: almost thirty percent of companies with a significant violation of basic labor laws are federal contractors , and tens of thousands of American workers are paying the price—through shortchanged paychecks, with their safety, or, sadly, with their lives,” Harkin said. “Not only are these contractors violating labor laws time and time again, but our federal contracting system has virtually no reliable tools in place to ensure that these violations of the law are ever considered before a contract is awarded.
“By law, the government is only supposed to contract with companies that it first determines to have a ‘satisfactory record of integrity and business ethics.’ But, as the findings of this report reveal, the federal government is awarding billions of taxpayer dollars to companies with significant violations of federal labor laws,” Harkin added. “We need an effective system in place to respond when federal contractors violate wage or safety laws, and to make compliance with labor laws a meaningful part of federal contracting decisions. Our government owes it to hardworking Americans to lead by example when it comes to following to our labor laws.”
The HELP Committee’s investigation represents the first comprehensive report of its kind to connect federal labor law violations and contracts awarded to private companies. Findings of the investigation include:
The report identifies key areas for improvement and solutions to remedy these problems, on both the agency and executive levels:
The full report, with executive summary, can be seen here.
The appendix to the report can be seen here.