New Rule From Obama Will Punish Contractors Who Cheat Or Endanger Workers

And no, business groups and the GOP don’t like it.

With its time in the White House winding down, the Obama administration plans to add yet another executive order to its list on Wednesday ― one that will bar companies from receiving federal contracts if they recently violated labor laws.

Known as the Fair Pay and Safe Workplaces executive order, the new regulation is meant to reward good actors and punish bad ones, encouraging employers to take the high road if they want government money. It’s part of the White House’s broader strategy, pushed by labor groups, to use federal contracting power in order to improve workplaces in the broader economy.

“This rule affirms the notion that contracting with the federal government is a privilege, not an entitlement,” said Labor Secretary Tom Perez. “The contractors who are doing the right thing should not have to compete for contracts with those who don’t.”

The rule has been in the works since 2014 and has just now been finalized by the Labor Department and the Federal Acquisition Regulatory Council. On a call with reporters, administration officials said different provisions of the rule will gradually be phased in, in order to give contractors time to adjust. They also said that they took feedback from contractors into account before crafting the final rule.

That will probably be little consolation to business groups, who vehemently opposed the regulation and lobbied to have it watered down or spiked. Along with Republicans in Congress, they have dubbed it the “blacklisting rule,” claiming it would add more red tape and unfairly prevent firms from securing federal contracts.