Executive Order Directs Agencies to Favor “High Road” Employers

A new Executive Order issued by President Biden directs federal agencies to prioritize “high road” employers when awarding federal contracts and grant money under the CHIPS Act, the Infrastructure Investment and Jobs Act, and the Inflation Reduction Act. 

Why it matters: Stymied by legislative and regulatory failures, the Biden administration is using federal money as a carrot to impose labor standards on employers. 

The bigger picture: The Executive Order is limited to federal money dispensed under three laws and does not mandate specific actions, potentially limiting its impact. 

The Executive Order: Investing in America and Investing in American Workers, EO 14126, directs federal agencies to prioritize high labor standards when selecting projects and employers for grant money under either of the three laws. Specifically, agencies should prioritize projects or employers that feature, among other things:

• Project labor agreements, unionized workforces, employer neutrality, and voluntary union recognition

• “Family sustaining wages,” pay above prevailing wages

• Robust paid leave benefits

• Access to training and upskilling

• Excellent safety records

Nothing new: The Biden administration has been consistent in its approach in using federal grant money under the CHIPS Act and infrastructure laws to nudge participating employers toward more union-friendly practices.