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.

OFCCP Releases Updated Sex Discrimination Rule

As anticipated, OFCCP has released its new Sex Discrimination Rules – replacing the outdated Sex Discrimination Guidelines that have been in place since the 1970s.  The release coincides with the White House’s United State of Women Summit being held today in Washington D.C..

The new rule will go into effect on August 15, 2016 and addresses the issues of “sex-based barriers to equal employment and fair pay, including compensation discrimination, sexual harassment, hostile work environments, a lack of workplace accommodations for pregnant workers, and gender identity and family caregiving discrimination.”

OFCCP is holding a complimentary webinar on Thursday, June 16, 2016 2:00 pm Eastern, on the requirements of the new rule.

The Final Rule is just shy of 200 pages.  We are in the process of digging in and will be back soon with detailed analyses and insights.

EEOC Increases Penalties for Employment Law Posting Violations

The EEOC has announced an increase to the monetary fine for employers who fail to post the proper Title VII postings.  The penalty is now $525 per violation, a 150% increase from the previous $210 fine.  Pursuant to Title VII, the Americans with Disability Act and the Genetic Information Nondiscrimination Act (GINA), employers are required to post in conspicuous places Department issued postings “describing the applicable provisions of title VII, the ADA, and GINA.”  The Department of Labor’s EEO is the Law poster contains the required postings.

Companies Feeling Pressure to Confirm they Pay Employees “Equally”

Increasingly, high-profile companies in the tech industry are feeling the pressure to publicly share employee pay information and address any existing “pay gaps.”  This has led to a number of recent press releases from Silicon Valley employers proclaiming “equal pay” within their organizations.

Most recently, in connection with Equal Pay Day, Facebook, Inc. and Microsoft Corp both publicly announced they pay male and female employees equally.  Microsoft went so far as to disclose its female employees earned 99.8 cents for every 1.00 dollar earned by men in the company and also shared data on pay equality for minority employees.

While other companies likely have, or soon will, feel the pressure for pay transparency, there are important considerations to take into account before doing so.  Some things to keep in mind include:

  • What type of analyses will the company rely on to substantiate such a pronouncement?
  • How will the analyses be conducted to protect them under privilege?
  • How will this information be utilized by the company, existing and former employees and other third-parties?

Importantly, if employers are going to make public statements about paying their employees “equally,” they first should conduct pay equity analyses to substantiate these claims and ensure the analyses are protected under privilege.  [Note: By “pay equity analyses,” we mean comparing employees to one another, not to market.  Many organizations conduct market analyses, but do not actually review pay equity for their employees within their organizations.]  However, with this increasing pressure on employers to make “equal pay” statements, many requests to analyze pay data come directly from the C-suite, so ensure you are aware of when this occurs and your organization is running these analyses properly and they are protected under privilege.

Department of Labor Regulatory Agenda Update

The Department of Labor has released its Spring 2016 regulatory agenda.  While the agency has accomplished many things already this year there are still a couple of items it would like to check off its list, including the following:

There was no new information provided in connection with EEOC’s proposed changes to the EEO-1 report for the collection of pay data.

Stay tuned for further updates.

Final Revised Overtime Rule Released by Department of Labor

The U.S Department of Labor’s Wage and Hour Division has finalized its much anticipated revisions to the rules governing overtime compensation. The revisions, in part, increase the income level of those who are exempt from overtime pay to $47,476, almost doubling the prior threshold, allowing a greater number of employees to qualify for overtime pay.

According to the White House, the modifications are expected to extend overtime protections to an additional 4.2 million Americans and significantly increase wages for workers over the next decade. The revisions come at a time when the country, and federal contractors in particular, are seeing the Obama Administration and the federal agencies “double-down” on commitment to fair pay.

The new regulations, with which employers will have until December 1, 2016 to comply, are yet another addition to the Agency’s pay enforcement toolbox which already includes Federal Minimum Wage, Pay Transparency regulations, Directive 307 and Item 19 pay data submission requirements for OFCCP audits. The toolbox will soon be expanded further with the new EEO-1 pay data collection tool.

Employers have experienced invigorated pay investigations during OFCCP compliance reviews, and have already started seeing compliance officers inquire about compliance with Federal Minimum Wage standards. Consistent with its pay enforcement agenda, we expect to see inquiries about compliance with these new overtime standards once they go into effect.

For more information about these new regulations, please join our Wage & Hour colleagues on Monday, May 23, 2016 at 11:30 Eastern for a webinar discussing the changes.

Webinar on New FAAP Directive Announced

In connection with the release of its updated FAAP Directive, Directive 2013-01, OFCCP will host a complimentary webinar on May 19, 2016 discussing Functional Affirmative Action Programs.

Information about registering for the webinar is available on OFCCP’s website.

OFCCP Publishes Finalized Updated FAAP Directive

OFCCP has received approval from OMB for revisions to the Agency’s Functional Affirmative Action Program (FAAP) directive.  The revised Directive 305 went into effect on April 28, 2016.  In response to public comments received, OFCCP made modifications to its proposed revised directive, as reflected in the supporting statement filed with OMB.

OFCCP last updated its FAAP directive in January 2013 which significantly changed the Functional Affirmative Action Program.