President Barack Obama is using the federal government’s vast array of contractors and subcontractors as a labor policy incubator, ready to sidestep Congress to impose workplace rules on wages, pay disparities and hiring on a segment of the private sector that gets taxpayer money and falls under the chief executive’s control.
Obama this week plans to issue an order prohibiting federal contractors from retaliating against workers who discuss their pay. He will also direct the Labor Department to issue new rules requiring federal contractors to provide compensation data that includes a breakdown by race and gender.
The steps, which Obama will take Tuesday at a White House event, take aim at pay disparities between men and women. The Senate this week is scheduled to take up gender pay equity legislation that would affect all employers, but the White House-backed bill doesn’t have enough Republican support to overcome procedural obstacles and will likely fail.
The moves showcase Obama’s efforts to seek action without congressional approval and demonstrate that even without legislation, the president can drive economic policy. At the same time, they show the limits of his ambition when he doesn’t have the support of Congress for his initiatives.
Republicans say Obama is pushing his executive powers too far and should do more to work with Congress. His new executive orders are sure to lead to criticism that he is placing an undue burden on companies and increasing their costs.
Federal contracting covers about one-quarter of the U.S. workforce and includes companies ranging from Boeing to small parts suppliers and service providers. As a result, presidential directives can have a wide and direct impact. Such actions also can be largely symbolic, designed to spur action in the broader economy. They also can be undone by future presidents or by congressional action.
Tuesday’s executive order and presidential memorandum on pay equity measures come two months after Obama ordered federal contractors to increase their minimum wage from $7.25 to $10.10 an hour — the same increase Obama and Democrats are struggling to get Congress to approve nationwide.
Obama in 2012 issued an order that prohibited government contractors or subcontractors from, among other things, charging employees recruitment fees, a practice that some companies have been accused of employing in their overseas operations.
In his first month in office, he required that certain large federal contractors hire service workers who had been employed by the previous contractor on the job. He also has prohibited federal contractors from using federal funds to influence workers’ decisions on whether to join a union.
Jeffrey Hirsch, a former lawyer with the National Labor Relations Board, said presidential executive orders that affect federal contracting workforces can demonstrate that those practices are less onerous than initially imagined.
“It’s an important step in implementing things in a broader scale,” said Hirsch, now a professor at the University of North Carolina School of Law.
In a separate action Monday, Obama intends to announce 24 schools that will share more than $100 million in grants to redesign themselves to better prepare high school students for college or for careers. The awards are part of an order Obama signed last year. Money for the program comes from fees that companies pay for visas to hire foreign workers for specialized jobs.
Obama’s go-it-alone strategy is hardly new. And his rate of signing executive orders is similar to that of President George W. Bush and lower than that of President Bill Clinton. President Franklin Delano Roosevelt was the most active signer of executive orders, issuing them at the rate of nearly one a day. But Obama has the lowest rate of executive orders since President Grover Cleveland, according to an analysis by the Brookings Institution.
Tuesday’s executive actions are designed to let workers discuss and compare their wages openly if they wish to do so and to provide the government with better data about how federal contractors compensate their workers.
“This really is about giving people access to more information both to help them make decisions at the policy level but also for individuals,” said Heather Boushey, executive director and chief economist at the Washington Center for Equitable Growth. She has been working with the administration to get compensation information about the nation’s workforce.
“This is definitely an encouraging first step,” she said.
Federal contractors, however, worry that additional compensation data could be used to fuel wage-related lawsuits, said James Plunkett, director of labor policy at the U.S. Chamber of Commerce.
What’s more, he said, such orders create a two-tiered system where rules apply to federal contractors but not to other employers. Those contractors, knowing that their business relies on the government, are less likely to put up a fight, he said.
“Federal contractors ultimately know that they have to play nicely to a certain extent with the federal government,” he said.
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