Breaking News: EEOC/OFCCP Proposed Merger Resulting in Unexpected Allies

As we speculated yesterday, the White House’s proposed budget for fiscal year 2018 proposes to merge the Office of Federal Contract Compliance Programs (OFCCP) with the Equal Employment Opportunity Commission (EEOC).

In the proposed budget, released this morning, the OFCCP would see its budget reduced from $105 million to approximately $88 million and have its operations merged with those of the EEOC, the other civil rights enforcement agency within the Department of Labor.  Funding for the EEOC is proposed to essentially stay the same at roughly $364 million.

Just a few hours after the budget was released, the House Subcommittee on Workforce Protections held a previously scheduled hearing regarding the EEOC.  Taking advantage of the opportunity to discuss the newly released proposal to merger OFCCP with EEOC, representatives from both civil rights organizations as well as employer organizations spoke out against the merger.  Not often do you have the NAACP and the U.S. Chamber of Commerce align (quickly) in opposition to an administration’s proposal.  In fact one media outlet reported the occurrence as the “moment of strange bedfellows.”

And it appears the concern about this consolidation is not isolated to those in attendance at the hearing.  In anticipation of the proposal, Jackson Lewis has previously discussed the possible merger with employers, employer associations focused on AAP compliance, business and industry associations and other stakeholders and learned that the business community is squarely against the merger.  This, coupled with the fact that it appears civil rights/women’s rights organizations and other employee advocates are opposed as well, looks to present an uphill battle for this proposal to actually come to fruition.  But, in an unpredictable administration unpredictable things happen so stay tuned for updates.

 

Is a Merger of OFCCP and EEOC on the Horizon?

In February 2017, we speculated whether the Trump Administration would eliminate the OFCCP as a possible cost-cutting measure.  The discussion has continued since that time, and has, in the past weeks gathered more interest.

The latest on the topic of the Office of Federal Contract Compliance Programs’ (OFCCP) fate stems from a recommendation by the Heritage Foundation that OFCCP be merged into the Equal Employment Opportunity Commission (EEOC). According to the Heritage Foundation report the EEOC and OFCCP are redundant:

Taxpayers should not fund two separate and duplicative anti-discrimination agencies, one for federal contractors and one for all employers.

There are differing opinions, of course, but the Foundation’s premise above overlooks many fundamental distinctions between the two agencies, the primary one being OFCCP unique authorization to oversee and enforce compliance with affirmative action obligations stemming from the federal procurement process.

As federal contractors know well, anti-discrimination, as handled by EEOC, is not the same as the affirmative action obligations faced by contractors. Nor do the come from the same source of authority.  While Executive Order 11246 can be amended by executive order, the statutory authority to enforce the Vietnam Veterans Readjustment Assistance Act and Section 503 of the Rehabilitation Act is provided to the Department of Labor.  Thus, enforcement authority over VEVRAA and Section 503 cannot be shifted to EEOC by executive order; rather, congressional action would be necessary.

And, if the obligations of the two agencies do not align, the question looms whether shifting OFCCP under the wing of EEOC would actually achieve any economic benefit – which seems to be an intended benefit of the consolidation. The Trump Administration has issued a number of cost-cutting executive orders and taken various actions aimed at minimizing burdens on the business community.  In fact, the White House  is soliciting input until June 2017 on this very topic as part of President Trump’s Executive Order on a Comprehensive Plan for Reorganizing the Executive Branch.

Also timely is the anticipated release of the Administration’s fiscal year 2018 budget, due out this week. The budget’s suggested funding level for OFCCP may signal whether the Trump Administration has an OFCCP/EEOC merger on its mind.  Specifically, OFCCP might be eliminated from the budget or have its budget significantly reduced as a signal that its days are numbered.

As soon as the budget is released by the Office of Management and Budget (OMB) we’ll provide an update so stay tuned.

Department of Labor to Recognize Employers Who Recruit, Employ Veterans

Coming out of the Honoring Investments in Recruiting and Employing American Military Veterans Act (HIRE Vets Act), signed by President Trump on May 5, the U.S Department of Labor has created the HIRE Vets Medallion Program.  The program will award employers who “recruit, retain, and employ veterans, and who offer charitable services in support of the veteran community.”

The newly sworn in Secretary of Labor, Alexander Acosta, expressed that

The Department of Labor looks forward to shining the spotlight on employers who make hiring veterans a priority and encouraging other employers to hire our nation’s heroes.

There will be two levels of awards for large, as well as small – to – mid-size employers.  The criteria for the awards include:

  • Percentage of employees who are veterans;
  • Percentage of veteran employees who are retained;
  • Establishment of veterans’ assistance and training programs;
  • Employment of dedicated human resources professionals for veterans; and
  • Income and tuition support for veterans.

The Department announced companies will be presented with awards under the program in connection with celebration of Veteran’s Day.

Trump Signs Religious Liberty Executive Order

During a ceremony in the Rose Garden, President Trump signed a much-anticipated “Religious Liberty” executive order.   The Executive Order states it is the

policy of the executive branch to vigorously enforce Federal law’s robust protections for religious freedom.

The relatively short Executive Order also recognizes that

the United States Constitution enshrines and protects the fundamental right to religious liberty as Americans’ first freedom.

Among other items, the order calls for the Secretary of the Treasury to relax prohibitions on political activities of tax-exempt religious institutions as well as instructs the Attorney General to “as appropriate” issue guidance interpreting religious liberty protections in Federal law.

Absent from the final version of the order, however, is a provision that would have made it permissible for federal contractors to discriminate against LGBT individuals on the basis of religious beliefs.  The initial draft of the order permitted that type of action.  The removal of this provision may be a sign of the still-evolving support of the Trump administration for the LGBT community.

 

 

Senate Confirms Alexander Acosta as Secretary of Labor

In a long-awaited, much anticipated, yet relatively low-key vote, the Senate has confirmed Alexander Acosta as the next U.S. Secretary of Labor.  Following a moderately contentious hearing last month before the Senate Health, Education Labor and Pensions Committee, the full Senate approved Acosta with a 60-38 vote, finally filling a key position in President Trump’s cabinet.

Acosta has a full slate of items awaiting him following his official swearing in, including selection of OFCCP Director.  It remains to be seen, however, how quickly he will fill the position in light of the other matters he has to address, notably revisions to the FLSA classifications of exempt and non-exempt employees.  We will be sure to update as soon as developments occur.

Impact of “Hire American” Executive Order on Federal Contractor Staffing

At a ceremony in Wisconsin this week, President Trump signed yet another executive order, this one entitled, “Buy American and Hire American.”

What does this mean for federal contractors?  It’s not exactly clear at this point, but as our colleagues have previously discussed, the “hire American” portion of the President’s latest Executive Order is focused on revamping the H-1B visa program.  This will impact the make-up of employers employee populations for those contractors who rely on the program to help meet their staffing needs.  As a result, the executive order could possibly necessitate a change to recruiting strategies for contractors.

To be prepared, contractors should start planning ahead and working with their recruiting teams to develop strategies for recruiting and filling open positions going forward.  This is also an opportunity to revisit and bolster your good faith outreach programs to address staffing needs.

Veteran Hiring Benchmark Reduced – Again

OFCCP has released its revised VEVRAA hiring benchmark for 2017.  The agency has lowered the benchmark to 6.7 percent, down from the previous 6.9 percent mark.

As was the case last year, the agency provided guidance for contractors to implement the new benchmark stating:

Contractors who adopted the previous year’s national benchmark of 6.9 percent after March 4, 2016, but prior to this announcement, may keep their benchmark at 6.9 percent.  

This move is the third reduction of the benchmark since its inception in March 2014.

It’s Official: Blacklisting Executive Order Revoked

As anticipated, President Trump has put an end to Executive Order 13673 – Fair Pay & Safe Workplaces, also known as the “blacklisting” executive order.  As expected, the President signed legislation disapproving of the Executive Order pursuant to the Congressional Review Act.  He also issued an Executive Order officially revoking the initial authorizing Executive Order signed by President Obama. President Trump’s Order directs the Department of Labor and other executive agencies to “consider promptly rescinding any orders, rules, regulations, guidance, guidelines, or policies implementing or enforcing the revoked Executive Orders.”

With the underlying authorization for the regulations eliminated, this spells the end for the Executive Order as well as the DOL Guidance and the FAR provisions implementing the Blacklisting Rule.  The end result – federal contractors will not be required to report alleged labor violations to federal agencies as part of the bid process, are not required to implement procedures to comply with required paycheck transparency, and will not be prohibited from entering into mandatory arbitration agreements concerning employee Title VII claims.

 

Audit Letters Are In The Mail

As an update to last month’s report that OFCCP has put 800 establishments on notice of upcoming audits, we have learned that as of Friday, March 17, 2017, OFCCP has started sending out letters actually initiating audits.

Unlike the courtesy scheduling announcement letters (CSALs) which provide advance notice of an audit, the Scheduling Letters put in the mail by OFCCP of Friday initiate audits and starts the 30-day response time clock.  As a result, it is imperative that your establishments are on the look out for these letters from OFCCP and forward them to the proper people within your organization as soon as they are received.  Time is of the essence . . .

Update: Acosta Confirmation Hearing Pushed Back

The confirmation hearing for new Secretary of Labor nominee, Alexander Acosta, has been pushed back until March 22 to allow him to travel to Nashville with the President.  Its anticipated once the hearing moves forward, the Health, Education, Labor and Pensions Committee, will vote within on Acosta’s confirmation within the following week.  Stay tuned for new developments.

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