A government contractor is any private company that has a contract with the federal government to produce goods or services, and may range anywhere from small businesses to corporate giants. Federal government contracts are extremely important to the economy in the United States. Government agencies pay approximately $500 billion every year in contracts to companies that employ 22 percent of the United States workforce.
In choosing companies with which to contract, federal agencies are required to consider whether the company has a “satisfactory record of integrity and business ethics,” according to Federal Acquisition Regulation 9.104-1. Furthermore, Executive Order 11246 requires that all companies with over $10,000 in annual contracts obey antidiscrimination laws and the Federal Acquisition Regulations require any company doing over $5 million in business with the government to have a Code of Business Ethics and Conduct in place.
Though federal agencies are supposed to use discretion when choosing contractors, results of a recent investigation show that federal government contractors regularly violate labor laws. The Senate Health, Education, Labor, and Pensions Committee conducted a year-long investigation and discovered that nearly one third of the top labor law violators hold government contracts.
Wage and Hour Violations
32 of the top 100 violations recorded with the Department of Labor’s Wage and Hour Division came from federal government contractors. Companies who committed “severe and repeated” wage violations include Marriott International, University of Pittsburgh Medical Center, Sprint Nextel, C&S Wholesale Grocers (Piggly Wiggly), and United Health. Other wage and hour law violators included Hewlett Packard, AT&T, Nestle, Home Depot, Manpower, Lockheed Martin, Vanderbilt University, and General Dynamics.
18 of the top 100 workplace safety violators recorded with the Occupational Safety and Health Administration (OSHA) were companies with government contracts, causing 42 employee deaths during the time period investigated. OSHA also notes when a company is a “severe violator,” which means it committed repeated, willful, or failure to abate violations that caused employee fatalities or exposed employees to the most severe hazards, such as chemical releases or extreme toxins. The government contractors that committed the most severe safety violations were Blackstone Group, Tyson Foods, Johnson Controls, Verizon Communications, Bridgford Foods, Bartlett and Company, and Cenex Harvest States (CHS). Other companies with OSHA violations were Chrysler, GM, Cintas, BP, and Louis Dreyfus Group (Imperial Sugar).
Many politicians have made expressed concern over the recent report, stating the government should have a better process for examining potential federal contractors. However, the responsibility also lies with the companies that repeatedly violate labor laws. Companies that break wage and hour or safety laws should be held accountable and should compensate any injured employees. If you believe your employer has violated labor laws, you should contact the experienced employment attorneys at HKM today.