OFCCP Report Card: GAO Release Report of Its Review of the Agency

This week the General Accounting Office (GAO) issued a report to the House of Representatives Committee on Education and the Workforce on its recent audit of OFCCP.  The report reviews (1) how the Agency conducts audits; and, (2) the Agency’s outreach assistance and guidance efforts. 

The 56-page report – titled “Strengthening Oversight Could Improve Federal Contractor Nondiscrimination Compliance” – finds OFCCP audits only “about 2 percent of federal contractor establishments annually.”  Notably, the report concludes OFCCP “does not have reasonable assurance that it is focusing its compliance efforts on those contractors with the greatest risk of noncompliance.”   

The GAO is also concerned 85% of contractors do not timely submit AAPs within the 30-day deadline which “suggests that OFCCP processes do not ensure that all contractors are complying with their obligation to complete and annually update an AAP.”  Some contractors have already seen requests for extensions to submit their AAPs in response to Scheduling Letters shortened or outright denied.  It is likely this practice will continue, and even intensify, in the wake of this observation from the GAO. 

The report makes six recommendations for OFCCP.  Included are recommendations to:

  •  revamp the audit selection process to better target noncompliant contractors
  • develop a mechanism to monitor AAPs on a regular basis, including possibly electronically collecting AAPs and contractor certification of annual updates
  • make changes to the current scheduling process to addresses “changes in human capital and not rely exclusively on geographic location”

The GAO plans to provide updated information when it confirms what actions the agency has taken in response each recommendation.

In response to the release of the report, the House Committee to which the report was issued, published a statement in which it commented

This report demonstrates that there are tools already in place to protect workers and hold federal contractors accountable. Despite the rhetoric we hear from the administration and its Democrat allies in Congress, this also shows the overwhelming majority of employers do the right thing and follow the law

Stay tuned for GAO updates, other developments and impacts of this report on OFCCP’s enforcement actions.

Complimentary Webinar: Fair Pay and Safe Workplaces Final Rule

As we previously announced, the U.S. Department of Labor (“DOL”) and the Federal Acquisition Regulatory (“FAR”) Council have published the highly-anticipated final guidance and regulations implementing President Barack Obama’s “Fair Pay and Safe Workplaces” Executive Order (E.O. 13673), often called the “Blacklisting” or “Bad Actors” Executive Order. This rule will present significant challenges and have tremendous impact on the federal contractor community.

To help ensure your organization is ready for the October 25, 2016 effective date for the new rules, we have taped a complimentary webinar for your use.

In this webinar, my colleague Leslie Stout-Tabackman joins me to discuss what you need to know about the new regulations, how they can impact your organization, and what every contractor should be doing now, including:

  • Key changes from the proposed rule and guidance;
  • Effective dates, including phased in requirements;
  • Covered entities and contracts;
  • Definitions of disclosable labor law decisions and violation categories;
  • Disclosures by subcontractors;
  • DOL’s new preassessment of violations invitation;
  • Paycheck transparency and pre-dispute arbitration agreements.

Let us know what we can do to assist as you are working through all of the requirements and assessing the impact on your organization.

‘Tis the Season . . . for EEO-1 & VETS-4212 Reporting

It rolls around each year:  back to school, Labor Day, football season and the September 30th deadline for government reporting.  While next year may bring changes given the proposed  EEO-1 pay report, the filing obligations remained unchanged for this year.

Extensions

Of note, we suspect the deadlines may not be automatically extended this year as they have been in years past, so employers should not count on this.  Why?  Unlike in years past, the EEO-1 reporting system has been updated and the Joint Reporting Committee (JRC) is promptly responding to requests for IDs and passwords.  However, employers may request and receive a “one-time” 30-day extension here.  The JRC states, “No extensions will be granted after Oct. 30th.”

Strategic Considerations

As your organization files reports this year and in the future, be strategic and consider the following:

For All Employers

Implications for Pay Reporting in Q1 2018.  Beginning in Q1 2018, employers will likely have to file W-2 earnings from calendar year 2017 and hours worked on every EEO-1 Report.  This pay data will be used by the enforcement agencies to determine which organizations to investigate as well as made public by the agency.

Ensure you are prepared by doing the following:

  • Conduct a pay equity analysis to identify and address pay issues now.

 

  • At the beginning of the year, conduct “test runs” of your 2016 W-2 and hours worked data to determine if your organization is prepared to pull and merge the data required from your HRIS and payroll systems to complete these reports.  This will help inform if new reports need to be queries and the manpower required to complete these new obligations.

 

  • Breaking up Separate Legal Entities and Location.  Employers should accurately break up their reports by separate legal entity and location.  There are specific rules on how to handle locations of less than 50 employees, which notably differ between the two sets of reports.  Ensure they are handled properly – they should not be automatically rolled to the closest location, etc.  We often see issues with employees in these smaller locations placed into incorrect reports.

 

For Federal Contractors and Subcontractors

 

  • Consistency with AAP Structure.  In OFCCP audits, federal contractors and subcontractors must submit these reports, which should be set up relatively consistently (with a few exceptions) to the AAP.  OFCCP will compare to the AAP numbers by EEO-1 category and use for evaluative purposes to determine compliance.  This is also important as the EEO-1 reports are used to select employers for audits and locations of less than 50 are generally not selected for audit.

 

  • Using the VETS-4212 to Evaluate Compliance with the Vets Hiring Benchmark.  The hiring section of the VETS-4212 report reflects progress toward the current 6.9% veteran hiring benchmark and the effectiveness of your outreach efforts.  OFCCP evaluates this in audits.

 

Happy reporting and, as always, let us know if we can help.

Fair Pay & Safe Workplaces Final Rule and Guidance Highlights

As we reported yesterday, the FAR Council and U.S. Department of Labor have published final regulations and guidance implementing Executive Order 13673.  In connection with the much awaited publication, the Department of Labor has created a detailed webpage with FAQs and other informative pages regarding implementation of the final rules.

A few of the highlights from the Final Rules include:

  • Effective date for prime contractors is October 25, 2016
  • However, for bids under $50 million, no disclosure is required for a 6 month period – until April 25, 2017
  • Subcontractor reporting on hold for one year until October 25, 2017
  • Reporting period will be phased in 1 year at a time into a 3 year look back by October 25, 2018
  • Subcontractors are to report violations to DOL, not to primes, and must report back to primes on DOL findings
  • Legal entity required to report its violations is that listed on the bid/offer or contract, not parent, subsidiaries.  A division of a corporation would be required to make disclosures of the corporation
  • Contractors are encouraged, though not required, to go to DOL for preassessment of their violations before bidding contracts
  • Provides “due process” for contractor to receive notice of and respond to recommendation prior to final responsibility determination
  • State law violations (except OSHA equivalents) requiring disclosure will be subject of a future rulemaking
  • The definitions of “serious, willful, repeated, and/or pervasive violations” remain substantively unchanged
  • Pay Transparency and prohibition on pre-dispute arbitration requirements are still in place.

For additional information check out our recent article and stay tuned for more depth analysis in the coming days.

Fair Pay & Safe Workplaces Final Rule Released

The Department of Labor and FAR Council have released, for publication tomorrow, final guidance and regulations implementing Executive Order 13673: Fair Pay & Safe Workplaces (also colloquially referred to as the Blacklisting Executive Order.)

We are in the process of digesting the almost 900 pages of regulations, as well as an amendment to the Executive Order itself, and will be back with an in-depth analysis and our insights soon, so stay tuned.

Experts Share Their Thoughts to Close Out the 2016 ILG National Conference

The final day of the 2016 ILG National Conference wrapped up with a morning of breakout sessions, a keynote address from Beverly Bond, and ended on a high note with the ever-favorite Expert Panel.

This year the experts each shared their top conference “take-aways” which included:

  • Understanding that OFCCP is “going out swinging” in the last months of the Obama administration with audits that are expansive in both breadth and depth;
  • Recognizing we are still on the cusp of cultural change with respect to transgender issues;
  • Realizing employers shouldn’t “wait until the perfect opportunity to take steps to mitigate workplace risk”;
  • Developing solutions for compliance issues that take into consideration that “silos are out and comprehensive approaches are in”;
  • Looking out for “aggregating, aggregating, aggregating” by the Agency in compliance reviews; and,
  • Identifying there is “a checkerboard of government obligations for government contractors” that individuals should “step out of their lane” to help their organizations identify.

The panel’s recap of other topics discussed during the conference highlighted the fact contractors will continue to be challenged to implement new obligations and maneuver the ever-changing compliance landscape.  In the word’s of John Geier – “it’s not your grandma’s OFCCP anymore.”

This year’s conference provided a wealth of information for contractors and we look forward to seeing everyone in San Antonio in 2017!

EEOC Commissioner Victoria Lipnic Shares Her Thoughts on Pay Data Collection with the ILG National Conference

The second day of the 2016 ILG National Conference was filled with many informative sessions including those on implementing affirmative action plans, diversity initiatives, steering, and everyone’s favorite topic – pay.

The day opened with an address from EEOC Commissioner Victoria Lipnic. Commissioner Lipnic shared details of the Agency’s work studying harassment in the workplace. However, the most interesting portion of her presentation came in response to a question from the audience regarding the proposed changes to the Agency’s EEO-1 report to collect pay data.

Prefacing her response by making it clear she was not speaking on behalf of the Agency or the other Commissioners, Commissioner Lipnic shared that she voted against the EEO-1 pay data report proposal. Explaining that, as a policy matter, she felt

“it was past its prime and should be relegated to the heap of bad policy ideas once and for all,”

she emphasized her belief in equal pay for equal work and support of the Equal Pay Act.

Commissioner Lipnic acknowledged and agrees there is an unexplained wage gap but feels the focus should not be on collect pay data from employers that confirms the pay gap, but instead on addressing what have been identified as the predominant reasons for the gap, – females, generally, come in and out of the workforce and self-select into lower paying positions.

By way of example, Commissioner Lipnic shared the story of a small business owner who reported they received a quote from their vendor for $56,000 to modify their data collection system to address the obligations of the proposed changes to the EEO-1 form. She questioned whether that was a good use of the company’s funds or whether the funds would be more impactful if they were instead used to support on-site childcare or to hire another employee.  Her point, as she articulated it, is to question whether there is a different, better way, to address the pay gap than the proposed EEO-1 report.  In her words, pay is “complicated and individualized to each company.”

Following on this sentiment, the day wrapped up with a bookend presentation on pay delivered by Jackson Lewis’ own Mickey Silberman. Mickey started his pay presentation by pointing out

“there has never been an issue that has been more challenging or where contractors have as many forks in the road to choose from.”

His presentation put the “pieces of the puzzle together” of the various issues pay issues companies face today and shared tips and strategies to proactively prepare for the upcoming changes to the EEO-1 report, and other state laws and OFCCP compliance reviews.

If the content of the day is any indication of what’s on people minds, its clear people are thinking (and talking) about pay and will be for the foreseeable future.

The 2016 ILG National Conference – Opening Day

Hello from the 2016 Industry Liaison Group National Conference in Charlotte, North Carolina!

Today marked the first day of this year’s annual conference being held in Charlotte, North Carolina.

The festivities kicked off this morning with opening remarks from Charlotte Mayor, Jennifer Roberts, before conference goers were addressed by OFCCP Director Patricia Shiu.

In her final speech to the NILG as Director of OFCCP, Director Shiu to a look back at the “profound changes” the Agency has seen over the past seven years, including “ground breaking” regulations for veterans and individuals with disabilities as well as LGBT regulations and the recently released updated Sex Discrimination rule.

Director Shiu also highlighted the Agency’s three fundamental principles to:

  1. Protect workers
  2. Promote diversity
  3. Enforce through impartial, thorough and comprehensive compliance reviews

Over the past seven years of the Obama administration, Director Shiu reported 28, 811 federal contractors had been reviewed, encompassing 12 million workers, resulting in $75 million in relief and 12,000 jobs.  Director Shiu acknowledged “most of the time we find contractors comply with the laws,” but “our job is not done until grieved individuals are made whole.”

In addition to highlighting regulatory changes, Director Shiu re-emphasized the Agency’s focus on pay discrimination noting pay is a “high priority for the Agency because it is a high priority of the Obama administration” and commented she doesn’t believe the emphasis on pay “is going to change anytime soon.”

Director Shiu expressed the Agency’s desire to conduct reviews in a “fair, neutral, efficient and expeditious manner” and reminded contractors that the obligation to review pay annually “is not new.”

In closing, Director Shiu shared her thoughts for the future and requested the NILG community “make a business case for change” by engaging senior leadership to set milestones and track progress involving not only veterans and individuals with disabilities but minorities and females as well.

Director Shiu in her final remarks noted that while there may only be a year left in the current administration, the agency “plans to build on successes of the past years”

Stayed tuned for more updates over the coming days as the conference continues.

EEOC To Publish Update to EEO-1 Pay Data Reporting Proposal

EEOC has released, for publication tomorrow, an update with changes to its proposed EEO-1 pay data collection report.  Once published in the federal register, the public will have 30 days to submit comments.  This update takes into consideration public comments received on the Agency’s initially proposed pay data collection tool.  As it did previously, Jackson Lewis expects to submit comments in response to the update.

Quick Take-Aways

  • The revision proposes to change the EEO-1 filing deadline to March 31st of every year (instead of the current September 30th deadline) and proposes to change the workforce snapshot reported to a pay period between October 1st and December 31st of the reporting year (instead of the current July through September time period).
    • This change would take effect for EEO-1 filings in 2018.  Employers would be required to file the new pay data component along with the existing EEO-1 report by March 31, 2018, thereby giving employers a year and a half to comply with the new requirements.  No EEO-1 reports would be filed in 2017.  The reporting period for 2016, however, would remain unchanged – with reports being due by September 30, 2016
  • The EEOC continues to propose to have employers report W-2 earnings as the “measure of pay” for the new pay data collection report.  Specifically, employers will use Box 1 of the Form W-2 to complete their EEO-1 filings.
  • The EEOC likewise continues to propose that employers report “hours worked.”

Jackson Lewis has a dedicated team of experts as part of its Pay Equity Resource Group that will continue to evaluate the Agency’s proposed update and has provided additional insight and guidance.

 

 

OFCCP’s Scheduling Letter Renewed for Three Years

On the eve of the Fourth of July holiday, and just in time for the start of the final quarter of the Agency’s fiscal year, OFCCP announced it had received approval of its revised Scheduling Letter and Itemized Listing.  The revised letter, which, when received by a contractor initiates an Agency compliance review, was initially proposed by the Agency in October 2015 and under review by the Office of Management and Budget (OMB) since April 2016

While not as sweeping as the changes that revamped the letter at the end of 2014 , this version of the letter contains a couple of modifications worth noting.  One of the most significant changes to the letter is the Agency’s statement around confidentiality.  In the previous version of the letter, OFCCP informed recipients that the Agency considered information provided in response to the letter “sensitive and confidential” and any disclosures will be made consistent with the Freedom of Information Act.  In the current version, OFCCP informs contractors that

OFCCP may use the information you provide during a compliance evaluation in an enforcement action. We may also share that information with other enforcement agencies within DOL, as well as with other federal civil rights enforcement agencies with which we have information sharing agreements.

This language is modified slightly from the Agency’s initial proposal which more broadly allowed OFCCP to share information with “other federal government agencies.”

The letter goes on to states that the Agency is “required to comply with the Freedom of Information Act, the Trade Secrets Act, the Privacy Act, and the 1987 Executive Order governing the disclosure of confidential commercial information.”

Additionally, the revised letter clarifies OFCCP’s request with respect to the Veterans Benchmark, requesting

[i]f you are six months or more into your current AAP year on the date you receive this listing, please also submit current year hiring data to measure against your benchmark.

The previous version simply requested “information that reflects current year results.”

The agency has posted FAQs addressing questions involving the renewed letter.

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