By Lydia DePillis
The Davis-Bacon Act and Walsh-Healey Acts, which protect construction and manufacturing workers respectively, were enacted during the Great Depression to establish the federal government as a “model employer” to be emulated by the private sector. The Service Contract Act passed in 1965, along with a slew of other bills that served as the basis of President Lyndon Johnson’s War on Poverty, passed with the purpose of making sure government procurement dollars supported decent paying jobs.
And yet, almost from their inception, both contractors and the government have found the laws difficult to enforce. In 1982, the Government Accountability Office documented widespread violations, with the vast majority of agencies not even requesting determinations from the Department of Labor to set the minimums they’re supposed to pay. In 1979 and 1983, the GAO even took the unusual step of recommending that the Service Contract Act and the Davis Bacon Act be repealed, since they were deemed inflationary and impossible to administer.
“I don’t believe that anybody paid much attention to [the Service Contract Act],” says Paul Light, a professor of public service at New York University. “I just don’t think anybody knows how to follow it, and nobody wants to talk about it.”
“I DON’T BELIEVE THAT ANYBODY PAID MUCH ATTENTION TO [THE SERVICE CONTRACT ACT]. I JUST DON’T THINK ANYBODY KNOWS HOW TO FOLLOW IT, AND NOBODY WANTS TO TALK ABOUT IT.”
— Paul Light
The acts were never repealed, but the Department of Labor did carve out most concessions workers who work sell food and rent equipment in federal areas and facilities, and excluded those who work in leased buildings — which left more people uncovered as the government shifted toward renting office space rather than owning it. Meanwhile, the GAO continued to write reports on the number of companies that land contracts despite repeatedly violating labor laws.
So, why does it seem that these laws can be so ineffective?
According to the Department of Labor, it’s difficult to figure out whether a worker is covered by the Service Contract Act at any given moment, since it applies to the work itself, not the whole company (many other laws, for example, apply to all companies with more than a certain number of employees). “It would be virtually impossible for the Wage and Hour Division to maintain a list of covered institutions because such an entity could be covered one day, not covered the next, but covered again a few days later,” Department spokesman Jason Surbey says.
(One might argue that it should be possible to create a database of which laws apply to which contracts, but certainly government agencies don’t always have ideal technology at their disposal.)
So instead of inspecting every company, or even letting them know at the outset what wages they ought to be paying, the Labor Department holds voluntary education sessions for employers, and investigates in response to complaints. When it finds the contractor has violated the Act, it can win back wages through settlement negotiations. Overall, 150,548 workers have received $262.5 million in back wages since 2005.
However, as the GAO documented in 2009, worker complaints are often brushed off, or don’t receive an effective response. Unlike other protections like the Fair Labor Standards Act, the SCA doesn’t allow workers to bring their own cases; the Department of Labor has to do it for them. The department’s Wage and Hour division conducts roughly 30,000 inspections a year, and litigates only about 200. And the department rarely debars companies for violations — it did so eight times in 2014, down from a high of 27 in 2004. Litigation is expensive, time-consuming, and only bans a company for three years.
All that complexity makes it difficult for workers to know whether they’re being deprived of their rightful wage under federal statutes, which makes it easy for a contractor to overlook them.
Take Big Bus Tours, which has landed an exclusive 10-year concession contract to run tour buses around federally-owned areas. When asked by The Washington Post, the National Park Service said that the Service Contract Act should cover all the bus drivers, at a wage rate of $20.85. Open Top Sightseeing, which owns Big Bus Tours, says it complies with all relevant laws.
But Good Jobs Nation’s complaint includes pay stubs from drivers who were paid much less — several at $16.60 per hour. Michele Jackson, after 6 years of working for the company, makes $18.20. That amounts to about $45,000 a year, with which she supports her disabled fiancee and a child. During the winter, when they only have a few days of work per week, Jackson says managers have told drivers to try to collect partial unemployment to make up the difference.
“I’m angry,” Jackson says, of the knowledge that she should be paid more. “That’s like walking down the street and stepping in dog poop.”
“I’M ANGRY. THAT’S LIKE WALKING DOWN THE STREET AND STEPPING IN DOG POOP.”
— Michele Jackson, tour bus driver
Another example: The janitors in the federal buildings in downtown D.C. Sonia Chavez and Anibal Estrada clean the Department of Education headquarters as employees of a company called Ace Janitorial Services, which is a subcontractor of Maryland-based Sabree, Inc. They’re paid $9.50 per hour, even though the SCA wage is $11.83. That’s not a lot, but the extra couple dollars might stop them from having to worry so much about making the rent on their apartment in Maryland, or relying on food pantries to feed their three young children.
Sabree CEO Tajuddin Sabree said he was unaware that his subcontractor wasn’t paying the SCA-mandated wage. The General Services Administration, which hires the companies that clean its buildings, referred questions to the Department of Labor.
“We came to this country with the expectation that this was a country of laws,” Sonia, who emigrated from El Salvador in 1995, says through a translator. Her husband, Anibal, finished the thought. “This is a country not only of laws, but of opportunity as well,” he said. “We’re looking forward to giving our kids that opportunity.”
The question of whether to use federal contracting as a lever to raise wages — rather than using it as a way of getting the most work done at the lowest price — is not new. President Obama, at the beginning of his first term, had an answer: Government spending would go toward putting money in workers’ pockets, which may in turn lead to higher quality product.
Six years later, he’s actually done a lot to make that happen. The Department of Labor added 300 inspectors, bringing the total to just over 1,000, in an effort to beef up targeted, proactive enforcement. Last year, the White House issued executive orders that would raise the minimum wage for contracted employees to $10.10, and prevent companies with records of significant violations from receiving federal contracts, in hopes of solving the problem on the front end rather than trying to police violations down the road.
All that has irked the contracting community. Even the White House’s relatively conservative rule on booting contractors with bad labor records has faced fierce opposition from associations that represent federal contractors, who argue that compliance is too great a burden on the vast majority of contractors who do play by the rules.
“The Department of Labor has not always applied the Service Contract Act deftly according to its terms or in light of its ambiguities,” says Dan Abrahams, a wage and hour litigator at Brown Rudnick, noting that the retirement of the baby boomers from government service has weakened the department’s institutional knowledge on the subject. “Sometimes, DOL is a bully.”
“SOMETIMES, DOL IS A BULLY.”
— Dan Abrahams, wage and hour attorney, Brown Rudnick
Good Jobs Nation, however, doesn’t think those executive orders go far enough — it’s argued before that the administration should actively reward companies during the bid process that pay good wages and whose workers have been able to unionize. That’s a version of the “high road contracting” philosophy long espoused by liberal think tanks like the Center for American Progress.
However, there are many reasons why it hasn’t happened yet. Courts have taken a dim view of attempts to withhold contracts for reasons unrelated to performance, and a late-term bid by the Clinton administration to implement a similar rule in 2000 was kiboshed by the Bush White House a few months later.
So while Robert Glover, Michele Jackson, Sonia Chavez and Anibal Estrada, and the dozens of other employees in Good Jobs Nation’s complaint might get some wages back, it’s not at all clear that future workers like them won’t have to fight the same fight. Instead, they’ll have to rely on the policing powers of an agency that has 135 million other workers to worry about.