It would apply to federal purchase contracts with a value of more than $500,000, and will take effect in stages during 2016, according to the White House. There are about 24,000 businesses with federal contracts, employing about 28 million workers, according to the U.S. Labor Department.

Lawsuits Seen

John Engler, president of the Business Roundtable, a Washington-based group that includes chief executives of the largest U.S. companies, said the order may encourage more lawsuits against businesses.

"It'll be dressed up — we're protecting these rights or this rights — but when you strip it all away, more work for trial lawyers," Engler said at a meeting with Bloomberg News reporters and editors in Washington today.

Obama in January issued an executive order raising the minimum wage paid by federal contractors to $10.10 an hour. Workers, while welcoming the raise, have said it isn't enough, and they've pushed for other steps, like action to prevent unpaid off-the-clock work and to enforce workplace safety rules.

In the past year-and-a-half, employees of federal contractors have gone on strike nine times to protest low wages and labor law violations. The latest took place on July 29 when employees at federal worksites at Union Station, the Pentagon, the Smithsonian museums and the National Zoo walked off their jobs in the Washington area.

Democrats Push

Democrats in Congress have pushed for more protections. Representatives Keith Ellison of Minnesota and Raul Grijalva of Arizona, the co-chairmen of the Congressional Progressive Caucus, urged Obama to issue a "Good Jobs Executive Order" in a July 24 letter. It quotes from a report by Demos, a New York- based public policy group advocating for workforce changes, that said many federal contracting jobs provide poverty-level wages.

"One of the most effective ways to spur economic growth and build the middle class is to reform federal contracting policy," the letter states.

Senator Tom Harkin, an Iowa Democrat and chairman of the Senate labor committee, released a report in December showing that companies with significant violations of labor laws had won more than $80 billion in federal contracts in 2012.

'Important Step'

Citing a study by the Center for American Progress and the University of California at Berkeley released in 2009, the report said companies that do business with the federal government employ about 22 percent of the nation's workforce.

Obama's action "will be an important step forward to give the government more tools to effectively confront and deter workplace wage and safety violations," Harkin said in a statement yesterday.

Federal contracting officers already must assess the records of companies applying for contracts. The executive order is designed to make it easier for them to find past violations and requires the Labor Department to assess the severity of the employer's actions, the White House official said.

Under the order, potential contractors must disclose labor law violations in 14 federal or equivalent state laws before they can get a contract.

Accurate Information

For example, the order seeks to ensure that workers are given enough information to verify the accuracy of their paychecks and have additional protections against sexual assault or discrimination, according to the fact sheet. Among other required disclosures: violations involving safety and health, collective bargaining, family and medical leave and civil rights protections.

The Government Accountability Office issued a report in 2010 that found that almost two-thirds of the 50 largest wage- and-hour violations and almost 40 percent of the 50 largest workplace health-and-safety penalties issued from fiscal 2005 to 2009 were at companies that later won new government contracts.

"Safe workplaces and fair pay should not be luxuries for America's workforce," Neera Tanden, president of the Center for American Progress, a Washington policy group aligned with Democrats, said in a statement. "Yet today, far too many companies with long track records of violating workplace laws are continuing to receive federal contracts with no strings attached."

–With assistance from Mike Dorning and Brian Wingfield in Washington.