Federal Contractors Are Violating Labor Laws, Senate Panel Finds

As many as 30 percent of the companies hit with the highest penalties for labor law violations are federal contractors, a year-long Senate committee investigation unveiled Wednesday found.

Forty-nine contractors were the subject of nearly 1,800 separate enforcement actions taken by the Labor Department from 2007 to 2012, paying penalties adding up to $196 million, according to the report released by Sen. Tom Harkin, D-Iowa, chairman of the Health, Education, Labor, and Pensions Committee. “These findings are deeply troubling,” 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.”

Forty-two American workers died during the period reviewed, as a result of Occupational Safety and Health Administration violations by companies holding federal contracts in 2012, the report said. For example, seven died in 2010 at a refinery owned by Tesoro in Anacortes, Wash., when a heat exchanger ruptured and released explosive vapor and liquid. The plant had not been inspected for 12 years, the report said, yet Tesoro received $463 million in federal contracts in fiscal 2012.

The companies, which taken together employ about 26 million workers, work primarily in services such as cleaning, security, and construction. In addition to the safety violations, 32 violated the Labor Department Wage and Hour Division’s back-wage assessment. Thirty-five companies violated both safety and wage laws.

The report criticized the current federal contracting process, recommending improvements in the quality and transparency of Labor Department information and publication of an annual list of federal contractors that were hit with penalties. It called for tougher enforcement through more-transparent databases at the Government Services Administration. And investigators recommended a White House executive order to create enforcement tools “beyond the existing responsibility determination and suspension and debarment process.”