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Government Contracts Increasingly Further Labor-Policy Goals

Albert E. Dotson, Jr. & Eric Singer

This past year, the federal government implemented a variety of rules requiring that its contractors meet certain fair-labor requirements.  For example, a federal rule finalized in September requires federal contractors to provide their employees with up to 56 hours of paid sick leave, and another new rule, the Fair Pay and Safe Workplaces Rule, permits the government to withhold contracts from firms that have violated labor laws.

Similarly, at the local level, new regulations impose greater labor obligations on government contractors than ever before.  For example, in June of this past year, Miami-Dade County adopted the “Employ Miami-Dade Program,” which requires that County construction contractors provide construction-labor employment and training opportunities to Miami-Dade residents.  This new program supplements several existing County fair-labor programs, including those that require its contractors to pay their workers a living wage and provide opportunities to local small businesses.

The trend of requiring government contractors to meet more stringent fair-labor standards coincides with a marked increase in the use of public-private partnerships (P3s), which results in greater private-sector involvement in the provisions of public facilities and services.  Although the benefits of P3s are often framed in terms of reduced costs, shorter time frames, and improved quality, these new regulations highlight that P3s can also be used to further social-policy goals.  The fair-labor requirements that a government contractor must meet, for example, far exceed those ordinarily applicable to the private sector.  Of course, the benefits to the public of these heightened requirements may, in certain situations, be offset by increased costs.  But this tradeoff highlights the flexibility of P3s and their ability to address and balance many different types of public-policy goals.

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