President Obama on Monday worked around Congress again to influence domestic policy, although his decision to require all federal contractors to offer paid sick leave to their workers will end up being mostly symbolic, since most federal contractors already do what the White House is requiring.
The Monday executive order will affect only businesses that work on federally-funded projects, a significant part of the overall economy. Total federal contract spending in fiscal year 2014 was $447 billion, according to a study by Bloomberg, and the Labor Department said an estimated 28 million people are employed by federal contractors or subcontractors.
However, the White House anticipates its order Monday will affect 300,000 workers, about one percent of the people employed through contracting. In other words, offering paid leave is already the norm among the vast majority of federal contractors.
The situation was similar when Obama issued an executive order in 2011, finalized last year, setting a $10.10 an hour minimum wage for people working on the federally-funded projects. The White House claimed that 200,000 people would be affected by the rule, indicating that most workers covered were already being paid more than $10.10.
Last year, the White House announced it would extend federal anti-discrimination laws to transgendered people working for federal contractors. In response to an inquiry from the Washington Examiner, a spokeswoman for the Labor Department could not cite a single incident of alleged discrimination against a transgendered federal contract worker.
Other changes to contracting rules could have a significant economic effect. Earlier this year, the White House proposed a new rule requiring businesses to divulge all allegations of labor violations made against when bidding for a contract. Business groups have called this a proposed “blacklist” designed to make it easier for unions to pressure businesses through frivolous complaints.
The advantage of issuing the executive orders for Obama is that it allows him to circumvent Congress since the White House alone sets policy in this area. That allows him to pressure Congress to go along with similar reforms, and the White House was fairly open that this was the real intent of Monday’s action.
“In addition to issuing today’s Executive Order, the President is renewing his call for Congress to pass the Healthy Families Act, which would require all businesses with 15 or more employees to offer up to 7 paid sick days each year,” the White House’s announcement said.
Business groups warned that a blanket rule might work in federal contracting, but said other businesses wouldn’t necessarily be able to adapt.
“Mandatory paid leave is a great benefit for workers whose employers offer it. For workers whose employers can’t absorb the cost, it’s an arbitrary expense that will ultimately result in shorter hours, lower pay or disappearing jobs,” said Jack Mozlom, spokesman for the National Federation of Independent Business.
