Biden Orders Some Agencies to Consider Companies’ Labor Policies When Awarding Financial Help

September 12, 2024

What's New

President Biden has issued an Executive Order that will require designated federal agencies to consider an employer’s labor and employment practices when they award federal financial assistance under several recent federal laws. By limiting coverage to grants, loans, and rebates, Executive Order 14126 does not appear to cover federal government contracting.

The E.O. applies to these agencies: the Agriculture Department; the Commerce Department; the Education Department; the Energy Department; the Homeland Security Department; the Housing and Urban Development Department; the Interior Department; the Labor Department; the Transportation Department; and the Environmental Protection Agency.

The E.O. applies only to consideration of projects funded under four laws: the American Rescue Plan Act of 2021; the Infrastructure Investment and Jobs Act; the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act of 2022; and the Inflation Reduction Act of 2022.

What It Means

E.O. 14126, nicknamed the “Good Jobs” E.O., promotes strong labor standards such as family-sustaining wages, workplace safety, and the opportunity to join a union, a White House Fact Sheet says. Recent Democratic administrations have championed using labor standards as criteria in awarding federal funds—which proponents call the “high road” and critics call “blacklisting.”

For now, the E.O.’s impact is limited to entities receiving federal financial assistance from one of ten implementing agencies under four laws. However, the E.O. clearly establishes a policy precedent to potentially use labor and employment practices as a factor in the award of government contracts.

What You Should Do

Stay tuned to CWC as we follow the E.O.’s impact and any future developments.

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