Dive Brief:
- Federal contractors may be obtaining contracts with the government for which they are not eligible because the U.S. Department of Labor (DOL) does not consistently inform other agencies about employers that violated wage laws that protect service workers, according to a Nov. 23 report from the U.S Government Accountability Office (GAO).
- Companies that provide security, janitorial and other workers to the federal government must comply with the Service Contract Act (SCA), which requires that employers providing such workers pay them wages and benefits equal to what private workers in the same industries receive in that geographic area. The Labor Department enforces the SCA. From fiscal years 2014 to 2019, DOL conducted 5,000 compliance investigations, recovering $224 million in back wages from a government obligation of $720 billion on covered contracts. Wage or benefit violations were found in 68% of the investigations and some federal contractors were debarred, meaning that they cannot be awarded federal contracts for three years because of the findings. However, because the Labor Department does not consistently provide information on debarments, federal contracting agencies are often not aware of the disqualification, according to the GAO report. Specifically, the report noted that when recording SCA debarments, "DOL does not always include the unique identifier for an employer so that contracting agencies can accurately identify debarred firms" and "also does not have a process that consistently or reliably informs contracting agencies about SCA violations by employers. "
- GAO recommended that DOL analyze its use of enforcement tools and improve information sharing with contracting agencies on SCA debarments and investigation outcomes.
Dive Insight:
DOL reported various challenges to enforcing the SCA, according to the report, including difficulty communicating with other agencies. For example, DOL officials told GAO unreturned emails and voicemails, particularly with the U.S. Postal Service, can affect and delay cases. USPS officials told GAO they were unaware of any communication gaps, according to the report, but DOL and USPS "generally concurred with the recommendations," according to the report.
U.S. House of Representatives democrats, who requested the study, said they were not surprised by GAO's findings. "The Department of Labor's Wage and Hour Division failed to hold contractors accountable and this dereliction fell on the backs of nearly 130,000 workers — many of whom are frontline service employees experiencing the brunt of our current economic crisis. The report also uncovers concerning lapses on the part of the United States Postal Service which must be rectified," Rep. Alma Adams, D-N.C., said in a statement. "Safeguards and protections for workers like those in the Service Contract Act are useless without enforcement. Hopefully these findings prompt the Department of Labor to effectively use the authority entrusted to it by law."
Last year, a GAO report concluded that while DOL tracks changes in the U.S. workforce, the data it collects on technology's effect on the workforce is limited. The government watchdog recommended in that report that DOL develop ways to use new or existing data-collecting methods to identify and track the effects of automation on the workforce. GAO said DOL agreed with its recommendation and said it would continue to collaborate with Census Bureau. And just days ago, the organization declared DOL's unemployment data "flawed," urging the agency to reconsider its methods.