Federal Contractors Not the Only Ones with Disability Goals

Federal agencies soon will be required to engage in affirmative outreach for individuals with disabilities. The final rule issued by EEOC on December 30, 2016, will require federal agencies to take steps to increase the number of its employees that are individuals with disabilities beginning in January 2018.

This is similar to the affirmative action obligations in the revised Section 503 regulations that went into effect for federal contractors in March 2014.

As a reminder, under the disability regulations contractors are required to aspire to meet an annual 7% utilization goal (per job group) for individuals with disabilities. There is a separate veteran hiring benchmark obligation (currently set at 6.9%). While meeting the goals and benchmark are “aspirational” contractors are required to develop action oriented programs aimed at addressing underutilization and missed benchmarks.  In connection with this, contractors are required, on an annual basis, to “assess the effectiveness” of each of their outreach efforts.

In addition to the relevantly recent veteran and individuals with disabilities affirmative action requirements, contractors also have good faith outreach effort obligations for minorities and females in areas of underutilization. Where underutilized, employers must likewise create an action oriented program designed to address the underutilizations – which primarily includes developing meaningful relationships with local recruitment organizations.

While many things may change under a Trump administration, it is likely OFCCP’s emphasis on, and enforcement of, good faith outreach efforts will not. As a result, contractors need to make sure they are taking appropriate actions to build compliant and effective outreach programs.

Will OFCCP bring back Courtesy Scheduling Announcement Letters in 2017?

Happy New Year!

As we ring in 2017 and prepare for affirmative action and OFCCP compliance in a Trump administration, many contractors are wondering whether 2017 will bring an OFCCP audit their way.

Some may remember in years past around this time OFCCP would send out Courtesy Scheduling Announcement Letters (CSALs) providing advance notification to contractors of upcoming audits.  The list of contractors with establishments to be audited is generated every fiscal year out of the Agency’s national office in Washington D.C. based on an administratively neutral selection criteria.  Previously, after the list was generated, OFCCP would voluntarily issue CSALs to notify contractors that one or more of their facilities had been selected to be audited at some point during the agency’s fiscal year (October 1 – September 31).    Its actually been quite some time, however, since OFCCP provided employers with this advance notice with the last round going out in 2014.

In the past, not all CSALs resulted in an actual audit but, it was a good indication that a facility would be audited at some point.  In fact, since the 2014 CSALs, OFCCP has continued to conduct audits of those identified in the 2014 CSALs, long after the conclusion of the 2014-15 fiscal year.  The list however, was not dispositive as recent years have seen OFCCP conduct audits for which it issued no CSAL. 

We do not know whether OFCCP will again choose to issue CSALs in the future, possibly once a new Director is in place, but in response to our inquiry on the topic to the National Office, it appears, for the time being, the Agency will maintain the status quo and not issue CSALs.

As a result, as contractors prepare to turn over their calendar year affirmative action plans, as well as those who have recently updated or will be soon updating their AAP, its imperative to ensure you are prepared for an OFCCP audit, including the compensation elements of Item 19 and the veterans and individuals with disability requirements set forth in the Scheduling Letter.


Who will be the new head of OFCCP in the Trump Administration?

Who will lead the OFCCP under a new Trump administration?  The short is answer is we still don’t know. 

As we previously reported, OFCCP Director Pat Shiu left the Agency in the days following the election.  Deputy Director, Tom Dowd, a seasoned OFCCP official, has now taken the reins as the “Interim Acting Director” and will remain in place until a new leader is announced by the incoming administration.  Shortly before Director Shiu announced her departure, she obtained approval for the creation of a new leadership position within OFCCP – Director of Enforcement.  This position, which was given to Marika Litras, a senior OFCCP official, was created to “help the agency remain steadfast in carrying out its enforcement mission.”  Dr. Litras was previously the Director of the Division of Program Operations (DPO) for OFCCP.

 In the past, the new Secretary of Labor has provided input on the selection of Department directors, including OFCCP.  Present-elect Trump recently announced Andy Puzder, a pro-employer businessman, as his nominee for Secretary of Labor.  Puzder’s impact on OFCCP remains to be seen, however, his selection is certainly being touted as a “good thing” for employers in terms of reversing the recent trend of increased regulation on contractors.  Even now that Present-elect Trump has identified Puzder to head up the Department of Labor we will still have to wait to see who gets the nod to head up OFCCP.  As always, stay tuned for future developments.


Trump Nominates Businessman to Head Department of Labor

President-elect Trump has announced many Cabinet appointments and last week announced Andy Puzder, head of fast food brands Hardee’s and Carl’s Jr., for Secretary of Labor.  Several names were circulated in recent weeks as possible successors to outgoing Secretary Thomas Perez, including Vicki Lipnic, a current EEOC Commissioner.  However, in recent days it became clearer that Puzder was the top choice.

 Puzder, a lawyer, is well published on topics of employment law and represents a pro-employer perspective, with previously expressed views in opposition to significantly increasing minimum wage and the recently enjoined changes to the FLSA overtime regulations.  He has also been critical of the recent rulings on joint employment relationships.  Viewed as a mainstream Republican – he served as Mitt Romney’s economic advisor during the 2011-2012 campaign season – Puzder will bring years of corporate management experience to the roll of running the Department of Labor   

EEO-1 Pay Data Reporting – Will It Stay or Will It Go?

Predicting what any new presidential administration will or won’t do based on campaign statements is risky.  Nonetheless, we may glean some insights.  For instance, of the equal employment opportunity priorities mentioned during the campaign, the President-elect and his daughter, Ivanka, spent time talking about wage equality and childcare.  For example, on the news program, 60 Minutes, Ms. Trump stated, “I’ve said throughout the campaign that I am very passionate about certain issues. And that I want to fight for them… Wage equality, childcare. These are things that are very important for me… Really promoting more opportunities for women.”   

Does this suggest the new EEO-1 report will survive, despite its burdens?  There are a few likely options:  (1) Throw the baby out with the bath water – get rid of the whole thing – which EEOC and OFCCP could accomplish with relative ease; (2) Leave the report as is.  This option appears unlikely because of the burden imposed on employers:  gathering the data from multiple employer systems – HRIS (race, gender and position information), payroll (W-2 earnings) and timekeeping (hours worked); or, (3) Modify the report to decrease the burden by, for example, replacing W-2 data with annualized base pay.  Annualized pay is accessible from the HRIS with race/gender and job information, and, because pay is annualized, it alleviates the need for work hours reporting. 

 So what do employers do now?  As with the recently enjoined overtime regulations, there are downsides to each option.  Some are sitting tight, waiting to see what happens.  Others are moving forward in preparation by testing their reporting systems and making adjustments and planning a trial run in  first quarter 2017 to mimic the 2018 reporting requirements.  As is the case in many situations, a compromise approach may be the best choice. 

 The fate of the report must, of course, await new leadership from EEOC and OFCCP conferring and determining the best path forward.  We will provide updates as they develop … stay tuned.


Breaking News: Portions of Fair Pay and Safe Workplaces Executive Order Blocked

In a much anticipated, last minute ruling, a U.S. District Court Judge has ordered a nationwide preliminary injunction blocking the labor law violation disclosure requirements and restriction on use of arbitration agreements portions of the Fair Pay and Safe Workplaces Final Rule and Guidance (“Final Rule”), which were set to take effect today.

The pay transparency requirement, effective January 1, 2017 for covered bids, remains intact.

As this is only a preliminary injunction next steps will likely involve an appeal by the government of the order as well as briefing and a full hearing on the request for a permanent injunction.

We will bring you further updates as they develop.


Complimentary Webinar: What should you do now to prepare for EEO-1 Annual Pay Data Reporting

EEO-1 Annual Pay Data Reporting Has Arrived: What Should Employers Do Now? 

As we’ve been reporting, the new EEO-1 reporting rules require employers with 100 or more employees to annually report W-2 earnings, work hours, race/ethnicity and gender for all U.S. employees, separately for each location.

First reporting will be on 2017 data. The first annual filing deadline is March 31, 2018. EEOC and OFCCP will use the newly-reported pay data to launch targeted systemic pay investigations and intend to publish the reported pay data.  So, now is the time to prepare for this new reporting obligation and potential ramifications.

Join Jackson Lewis pay equity experts, Jennifer L. Seda and Mickey Silberman, on November 3,  from 2:00 – 3:00 Eastern for this timely and important webinar during which they will explain the new requirements, increased administrative burdens, and strategic implications of the EEO-1 pay data report.

Registration for this complimentary webinar can be found here.

Director Patricia Shiu to Leave OFCCP on November 6th

We have learned that Patricia Shiu will end her tenure as OFCCP Director in just a few weeks, on November 6th.  Director Shiu assumed the position in mid-2009 and has been one of the longest-serving directors of the agency.

 No information has been announced by the DOL about who will serve as director on an interim basis after Director Shiu’s departure.

We will share additional information as it becomes available.


First Lawsuit Challenging Fair Pay & Safe Workplaces Obligations Filed

As anticipated, the first lawsuit challenging the legality of the Fair Pay & Safe Workplaces executive order and final rules is now on the books. Filed by the Associated Builders and Contractors, a construction trade group, and the National Association of Security Companies, the complaint contains six counts which allege the Obama administration, the FAR Council and the U.S. Department of Labor exceeded their authority as well as violated the due process clause and federal arbitration act with issuance of the executive order and implementing rules .

The regulations and guidance implementing the executive order go into effect in less than a month, on October 25, 2016, and will impose significant information gathering and reporting obligations on covered contractors, as well as prohibitions on pre-dispute arbitration agreements and requirements involving disclosure of pay information.

The suit seeks an injunction preventing implementation of the regulations and guidance recently finalized by the FAR Council and U.S. Department of Labor.

We will provide updates, including information on the injunction request, as they become available so stay tuned for more . . .

Complimentary Webinar: It Pays to Be Sick – Discussion of Executive Order 13706

The final regulations for Executive Order 13706 (“Paid Sick Leave for Workers on Federal Contracts”) were published September 30, 2016.  Under the Executive Order and final regulations, paid sick leave obligations will begin with new solicitations and contracts beginning January 1, 2017.

Join my colleagues Patricia Pryor and Leslie Stout-Tabackman on October 20, 2016 for a complimentary webinar during which they will delve into the details of the new obligations, and discuss how these regulations impact your organization and what you should be doing now to prepare.