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Wage-theft rules create rare phenomenon in Congress: open disagreement between Minnesotans

Rep. John Kline

WASHINGTON — Minnesota’s members of Congress tend to get along relatively well, and only rarely do they have public battles over policy and politics on Capitol Hill.

This week saw an exception to that rule, as 2nd District Rep. John Kline and 5th District Rep. Keith Ellison clashed over federal rules aimed at punishing employers that withhold wages from employees.

In July 2014, President Obama signed an executive order, called the Fair Pay and Safe Workplaces order, that aimed to shut companies with records of labor abuses out from receiving federal contracts.

The abuses targeted by the order were broad, but special attention was paid to so-called “wage theft,” or when employers don’t fully pay employees what they are owed. (For more about what wage theft is, check out this explainer from UCLA.)

The White House has not convinced the Republican-held Congress to pass anti-wage theft legislation, so it has instead enacted the policy only for federal government agencies and the companies they contract with.

This week, Congress considered legislation to fund the Department of Defense, and written into the major budget bill is a provision authored by Kline that would make it so that Obama’s order on wage theft doesn’t apply to the DoD.

Federal contracting represents a huge business nationwide, but defense contracting is in its own category. In fiscal year 2014, DoD contracts with companies totaled $285 billion, more than those of all other federal agencies combined. Those contracts span a broad array of areas, from companies that supply weapons to companies that supply workers for cafeterias in the Pentagon.

As of 2011, the Department of Defense held 8,000 contracts with Minnesota businesses, totaling $1.7 billion, according to Minnesota Public Radio.

Kline, who chairs the House Education and the Workforce Committee and is a longtime member of the House Armed Services Committee, argues that the Obama order is unnecessary, and that current rules to shut out companies with records of fraud and abuse have proven sufficient.

According to the Education and the Workforce Committee, in 2014, the DoD availed itself of existing tools to shut out companies with past offenses against workers, taking action to suspend or debar contractors over 1,000 times.

Republicans also argue that the executive order sets a bad precedent because it permits agencies to deny contracts not just for proven violations of labor law, but also alleged violations.

When his language was approved in committee in late April, Kline said that the White House’s rule is “flawed [and] redundant,” and that it will “undermine the equipment and resources our Armed Forces need to keep America safe.”

“Those who deny workers basic protections shouldn’t be rewarded with government contracts,” he added, “and that is precisely why suspension and debarment rules already exist to hold bad actors accountable.”

Ellison: Kline is doing work of big business

Rep. Keith Ellison

Ellison, who has been a vocal supporter of the White House’s executive action, disagrees. On the House floor Wednesday, he introduced an amendment onto the bill to strike Kline’s language, which was dismissed.

Speaking to MinnPost, Ellison rolled his eyes at the notion that existing rules for protecting federal contract employees from wage theft are sufficient — he said “literally millions of dollars in worker pay is lost to wage theft.”

“I think it’s a disgrace to say we’re not going to try to protect workers from wage theft,” he said. “The law is inadequate, that’s why people are striking, that’s why people are upset and want change, that’s why Obama issued the executive order.”

Ellison added he believes Kline is “doing the bidding of the U.S. Chamber of Commerce and big business against the average working person,” and pledged to fight the provision “every step of the way.”

The Progressive Caucus, of which Ellison is a co-chair, sent out a message late Wednesday asking colleagues to vote “no” on the entire defense spending bill because of the “poison pill” language on the executive order.

The letter cited a report from the Senate labor panel that found the federal government doled out $81 billion in contract money to 49 firms that were found to have significantly violated wage and safety laws.

White House also opposes

The White House also came out specifically against Kline’s provision, saying it would “roll back important safeguards… to ensure that taxpayer dollars to not reward corporations that break labor laws and thereby jeopardize the performance and cost of Federal contracting.”

The statement highlighted that the order gives the government the information necessary to “assess a contractor’s record of integrity and assist contractors with significant labor violations in improving their labor law compliance.”

The White House says the executive order, if fully implemented, will streamline disclosure of pay information to workers, and give federal contract decision-makers more information about companies’ labor histories.

Members of the House approved the defense bill on Wednesday night by a margin of 277 to 147. Ellison, along with Democratic Reps. Betty McCollum and Rick Nolan, voted no on the package. The Senate also must consider its own version.

But whatever defense spending bill emerges from the GOP-held Congress is likely to have much Obama won’t like, beyond Kline’s provision — the White House has suggested he will veto the whole spending package unless changes are made.

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Comments (5)

  1. Submitted by Frank Phelan on 05/19/2016 - 12:22 pm.

    I’m Making Myself Sound Here

    I’m old enough to remember when the GOP accused the Dems of being soft on crime. I guess the GOP doesn’t cater to the “law and order” crowd anymore.

  2. Submitted by lee wick on 05/19/2016 - 05:27 pm.

    Who is the Gatekeeper?

    Seems to me the federal contract decision-makers haven’t been doing their job.

  3. Submitted by Charles Holtman on 05/19/2016 - 05:35 pm.

    Mr Kline is retiring from public service.

    Perhaps with for-profit higher ed on a trajectory of growing disrepute these days, and given his military background, he is buffing up his resume for a more auspicious private-sector future bringing his influence to bear on behalf of DoD contractors.

    • Submitted by RB Holbrook on 05/20/2016 - 09:32 am.


      Or it could just be a Republican’s reflexive rejection of anything proposed by the Obama administration. Add in the fact that this is designed to penalize employers who treat employees unfairly, and you have a twofer.

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