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.

U.S. Supreme Court Again Upholds Race-Conscious Admissions Program

Today in the case of Fisher v. University of Texas, the U.S. Supreme Court today held, in a 4-3 decision, that the “race-conscious admissions program in use at the time of petitioner’s application is lawful under the Equal Protection Clause.”  This is the second time the Court has considered the issue but the first time it has issued a decisive decision.

In June 2013, the Court remanded the case to the Court of Appeals to ensure “exacting scrutiny” was applied to the University of Texas admissions program.  The Fifth Circuit Court of Appeal concluded the UT affirmative action program passed that muster and was narrowly-tailored to achieve a diverse student body.  Ms. Fischer appealed again claiming the Fifth Circuit had not applied the required level of scrutiny.

While this decision firmly supports such affirmative action programs, the Court’s opinion cautions:  “The Court’s affirmance of the University’s admissions policy today does not necessarily mean the University may rely on that same policy without refinement. It is the University’s ongoing obligation to engage in constant deliberation and continued reflection regarding its admission policies.”

EEOC Releases New Documents Regarding Pay, Pregnancy

In addition to OFCCP’s release this week of its updated Sex Discrimination Rule, to coincide with White House’s United State of Women Summit in Washington, D.C., the Equal Employment Opportunity Commission (EEOC) released three new resource documents dealing with equal pay and pregnancy discrimination.

The three documents released are:

The documents are not specific to federal contractors, but they nevertheless apply to many federal contractors. We should expect the documents to be referenced by enforcement officials at both the EEOC and OFCCP as these topics continue to be at the forefront of workplace discrimination law.

 

OFCCP Reduces Veteran Hiring Benchmark

Today, OFCCP announced that, effective March 4, 2016, the annual hiring benchmark for veterans pursuant to VEVRAA regulation is 6.9%.  This is a slight decrease from last year’s 7.0% benchmark.

As part of the release OFCCP clarified that

“Contractors who adopted the previous year’s national benchmark of 7 percent after March 4, 2016, but prior to this announcement may keep their benchmark at 7 percent.”

The agency noted that going forward the effective date for the annual benchmark will match the date the Bureau of Labor Statistics publishes the data from which OFCCP calculates the benchmark,  This usually takes place in March every year.

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