Via Federal Register notice, OFCCP has officially stated the Agency

will not request, accept, or use Component 2 data, as it does not expect to find significant utility in the data given limited resources and its aggregated nature, but it will continue to receive EEO-1 Component 1 data.

The notice is a welcomed confirmation for federal contractors that had concerns about OFCCP’s intentions with respect to the recently filed compensation data.

The notice reflects that OFCCP

reviewed the parameters of the EEO-1 Component 2 data collection and has determined that it does not find Component 2 data necessary to accomplish its mission to ensure federal contractors are not engaged in unlawful pay discrimination.

While the use of the collected pay data seems settled for OFCCP, at least at this point, the future of pay data reporting in general remains up in the air.

This week EEOC held a public hearing on the matter, where the Commission heard testimony and feedback on the current EEO-1 Component 2 Pay Data collection form and reporting of pay data in general.

In addition, as ordered, EEOC continues to collect and analyze pay data as part of its evaluation of the utility of the Component 2 collection and potential modifications to the process and form.

As we learn more about EEOC’s intentions and new developments we will continue to bring you updates – so as always, stay tuned for more!

In a welcome turn for federal contractors, OFCCP last week submitted a proposed regulation to codify Directive 2018-01 – Use of Predetermination Notices (PDN).  The regulation would require OFCCP to issue a Predetermination Notice (PDN) in every audit summarizing the Agency’s preliminary “discrimination” findings before issuing a Notice of Violation (NOV).

Regular issuance of PDNs, after approval from the Solicitor’s Office and the National Office of OFCCP, provides transparency to contractors and facilitates resolution of alleged violations before OFCCP issues an NOV.

The proposed regulation is not, yet, publicly available but can be tracked at the Office of Information and Regulatory Affairs (OIRA):  RIN 1250-AA10.  Given the current status – awaiting for approval for publication in the federal register for public comment – we do not know what the actual details of the proposal will encompass.

By way of background, OFCCP issued Directive 2018-01 in February 2018, as interim guidance regarding PDNs until it updated the Federal Contractor Compliance Manual (FCCM).  The Directive provides that rather than leaving the issuance of a PDN to the discretion of regional and district OFCCP offices, they must issue PDNs in some instances.  The Directive also provides oversight of regional and district office discrimination allegations via a mandatory pre-issuance review of all PDNs by the regional Office of the Solicitor and the OFCCP National Office.

In October 2019, President Trump issued Executive Order 13892 – Promoting the Rule of Law Through Improved Agency Guidance Documents – making it more difficult for OFCCP and other agencies to issue guidance document without public review and comment.  And also removing the use of sub-regulatory guidance as the basis for enforcement actions.  The Executive Order favors regulation instead of guidance due to the requirement of rigorous government review, as well as public notice and comment before a regulation may go into effect.  Compliance with this Executive Order as well as providing certainty and transparency in enforcement are likely the driving force behind this proposal.

We will be back with updates once OFCCP publishes the proposed regulations so stayed tune.

Furthering the Agency’s commitment to providing contractors with ongoing Technical Compliance Assistance, OFCCP has released a Guide to assist construction contractors navigate compliance with their equal employment opportunity obligations. The Construction TAG has been added to OFCCP’s ever-expanding technical assistance landing page.

OFCCP drafted the 157-page guide as a

self-assessment tool to review the practices [construction contractors] have in place to eliminate discrimination and achieve their equal employment opportunity goals.

We will dig in and be back with further details and insights.

As Veteran’s Day nears, OFCCP is keeping federal contractors busy reviewing the latest efforts the Agency is undertaking to ensure employers are in compliance with non-discrimination and affirmative action obligations for protected veterans.

In addition to releasing a supplement CSAL list for establishments that have been selected for VEVRAA Focused Reviews, OFCCP also publised the first Directive of FY 2020.  Directive 2020-01: Spouses of Protected Veterans was drafted to

ensure that federal contractors are not discriminating against spouses of protected veterans and to provide compliance assistance during compliance evaluations on how contractors can support the families of protected veterans.

Pursuant to the VEVRAA regulations, it is “unlawful” for a contractor to “exclude or deny equal jobs or benefits to, or otherwise discriminate against,” a qualified individual because of the “known protected status of an individual with whom the qualified individual is known to have a family, business, social or other relationship or association.”

The new Directive states that during the onsite investigation OFCCP will “ask questions of Human Resource (HR) staff, managers, and employees.”

For HR and Managers OFCCP will:

  • Offer compliance assistance by providing a sample nondiscrimination policy statement that the contractor may use; and,
  • Ensure that the contractor understands its obligation not to discriminate against qualified individuals whom the contractor knows to be spouses or other associates of a protected veteran.

More specifically for employees, the Compliance Officer will ask the following questions:

  • if they are a spouse of a protected veteran;
  • if they have coworkers who are spouses of protected veterans;
  • any observations they have concerning the treatment of spouses of protected veterans

It is clear that contractors scheduled for the new VEVRAA Focused Reviews should ensure they are prepared for this line of inquiry.  To be clear, however, the Directive does not state its investigations of compliance with this obligation is limited only to VEVRAA focused reviews.  Thus, all contractors should review their practices to ensure they are in compliance.

 

 

As promised, OFCCP has released the list of organizations that have been selected for Vietnam Era Veteran Readjustment Assistance Act (VEVRAA) Focused Reviews.  The list is published in OFCCP’s FOIA Library.

Labeled as a supplement to the existing CSAL list, the new listing contains 500 establishments that will be scheduled for a review focused on compliance with the Agency’s veteran non-discrimination regulations.  OFCCP has also published the scheduling methodology for this supplemental list.

As it did with the announcement of the Section 503 Focused Reviews, OFCCP unveiled a new VEVRAA Focused Review landing page to coincide with the release of the supplemental CSAL list. Among other forms of assistance, the landing page provides guidance on employer best practices for VEVRAA Compliance.

As a reminder, there is a proposed VEVRAA Focused Review Scheduling Letter currently pending with the Office of Management and Budget (OMB).

We will be back with more as additional details are learned.  Stay Tuned.

As previewed earlier this year, OFCCP is scheduled to publish on November 6, 2019 its proposed rule making addressing jurisdiction for TRICARE contractors and subcontractors.  As a reminder, OFCCP has had an audit moratorium in place since 2014 for employers that participate in TRICARE.

The proposed rule making seeks to codify OFCCP’s most recent position that TRICARE contractors and subcontractors should not be subject to OFCCP jurisdiction – or more precisely, that OFCCP

lacks authority over Federal health care providers who participate in TRICARE.

The Notice explains

[t]he proposed rule is intended to increase access to care for uniformed service members and veterans and to provide certainty for health care providers who serve beneficiaries of TRICARE.

This is the latest chapter in a very long, and winding story as to the question of whether OFCCP has jurisdiction over health care providers that receive TRICARE funds as their sole source of federal funding, with OFCCP taking varying positions along the way.

The agency is proposing to revise the definition of “subcontractor” in its regulations to exclude health care providers “with agreements to furnish medical services and supplies to individuals participating in TRICARE.”

In the event that is not an acceptable amendment, OFCCP proposes to establish “a national interest exemption from Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 for health care providers with agreements to furnish medical services and supplies to individuals participating in TRICARE.”

Today’s proposed rule making reflects OFCCP’s determination that

special circumstances in the national interest justify proposing the exemption as it would improve uniformed service members’ and veterans’ access to medical care, more efficiently allocate OFCCP’s limited resources for enforcement activities, and provide greater uniformity, certainty, and notice for health care providers participating in TRICARE.

To be clear, however, OFCCP’s proposal addresses authority over only TRICARE participants. Specifically, the notice states

OFCCP would nevertheless have authority over health care providers participating in TRICARE if they hold a separate covered Federal contract or
subcontract.

Thus, if they haven’t already done so, health care provides should take steps to understand the sources of their federal revenue to ascertain whether the modification will apply.

When formally published, the proposed rule making will be open for public comment and will remain open for 30 days.

To provide another opportunity to receive input on the Agency’s proposed revisions to the EEO-1 report, EEOC has scheduled a public hearing on the matter for November 20, 2019. The notice comes as EEOC has been ordered to continue with collection of Component 2 of the EEO-1 Report for 2017 and 2018 beyond expiration of the original data collection deadline.

As a reminder, the EEOC has filed for renewed approval for the continued collection of EEO-1 Component 1 race, gender and ethnicity workforce data for the next three years (2019, 2020 & 2021).  While EEOC plans to continue to collect Component 1 data, it reported that it is not seeking renewed authority at this time to collect Component 2 pay data and hours worked.  In furtherance of this, EEOC is seeking to decouple the Component 1 form from the pay data reporting of Component 2.

The hearing is intended to allow the Commission “hear from panels of experts, representing a diverse range of different views” on the proposed changes to the reports and is seen as part of the agency’s evaluation of the future of pay data reporting.

The hearing, which will be held in Washington, D.C. will be open to the public on a first come, first serve basis.  The public also has until November 12, 2019 to file comments in response to the Agency’s pending renewal notice.

 

Following the most recent Court Order, EEOC has provided the court with a current update as to its compliance with the Court’s Order that it continue to keep the EEO-1 Component 2 pay data reporting portal open.  The Court has ordered the portal remain open until at least January 31, 2020 to allow additional filers to submit their reports.

In its report EEOC detailed the efforts made to contact companies that have not yet completed their filings as well as the updated notice now posted on the EEO-1 Component 2 filing website that the portal will remain open.

As of November 1, EEOC is reporting

82.4% of eligible filers have completed submission of Component 2 EEO-1 data.

The Agency also reported that it “continues to receive a small number of requests from filers seeking exemptions from reporting” and the Commission is holding Commissioner votes on whether to grant the exemptions.

Per the Courts Order, EEOC will be required to continue to submit regular updates to the Court until the filing is complete.

 

 

The Technical Assistance Guide for Educational Institutions (the “Guide”) OFCCP released recently is largely a review of existing standards and regulations, but it also includes suggested best practices and concrete guidance specific to educational institutions.

The complete document is available with other guidance on OFCCP’s Technical Assistance website. A summary follows.

Since releasing the Guide, Director Craig Leen and other Agency officials have spoken about it publicly, most recently at its Academic Institutions Town Hall in Washington D.C., and a listening session with the American Association for Access, Equity, and Diversity. In those sessions, they said colleges and universities can expect compliance reviews to be more efficient than in the past, and to start seeing institutions scheduled for review beginning in Spring 2020.

Overview of Laws

The Guide includes an overview of laws enforced by OFCCP, and reminds contractors of “two general rules” —

  • Do not discriminate against applicants or employees based on protected categories; and
  • Take affirmative action to a) ensure equal employment opportunity without regard to race, color, religion, sex, sexual orientation, gender identity, or national origin; and b) to employ and advance qualified individuals with disabilities and protected veterans.

Affirmative Action Programs and Standards

The Guide includes an overview of what contractors must include in their Affirmative Action Programs: Organizational Profile (“Workforce Analysis”), Job Group Analysis, Availability, Placement Goals, the VEVRAA Hiring Benchmark, Section 503 Utilization for Individuals with Disabilities, Outreach, and Compensation, to name a few.

These are regulatory requirements and not new to contractors. However, the Guide does provide some education-specific insights. For example —

  1. Single or Multiple AAPs? The Guide provides that, where a campus includes a collection of buildings, either a single AAP or multiple establishment AAPs might be appropriate. Specifically, where a campus has various schools, colleges or departments that:
  • Operate distinctly, have limited employee interaction, and have different human resources departments, separate AAPs are likely appropriate.
  • Share instructional staff, and the operations of the units are more interconnected, a single establishment AAP is likely appropriate.

 

  1. Is a Worker an “Employee”? The Guide discusses whether educational institutions should count as employees, and therefore include in their AAPs, medical residents and student workers, for example.
  • OFCCP will consider whether the individual’s primary relationship with the institution is work-related. The Guide reminds educational institutions that OFCCP will not issue violations for excluding student workers from AAPs or personnel activity data, pointing to OFCCP’s Directive 2019-05, issued in September.
  • The Guide, like the 2019 Directive, also pointed institutions to the Darden test from the U.S. Supreme Court to determine whether an individual with a relationship to the institution qualifies as an employee.

 

  1. What are Appropriate Pay Analysis Groups? Consistent with OFCCP’s trend to make larger pay groupings then account for differences in duties by introducing variables, the Guide provides:
  • “Because tenure-track instructors have similar job functions and duties,” they can be included in the same pay analysis group, then variables introduced to a regression analysis to control for differences (contractors may not agree with this approach).
  • Variables such as the quality of teaching, publications, research, and community service should be included in the regression “only when they can be objectively and neutrally measured.”

Compensation in a Compliance Review

In the Guide, OFCCP discusses issues unique to tenure or tenure-track instructors, in contrast with issues involving non-tenure track instructors. The Guide also provides example questions it may ask during a compliance review. For example:

  • How does the institution conduct its own compensation analysis?
  • What and who determines the pay of professors, professional lecturers, instructors, and other teaching positions?
  • What are the sources of funding for grants and how do they influence base salaries?
  • What criteria are used to issue awards or honors that impact compensation?
  • How do 9-month and 12-month contracts differ, and what determines their availability?
  • How are tenure promotions reviewed for neutrality and by whom?

Religious Exemption

The Guide clarifies that religious colleges and universities are permitted to make employment decisions based on religious if the institution is, in whole or substantial part:

  • Owned, supported, controlled, or managed by a particular religion or by a particular religious corporation, association, or society; or
  • If the curriculum of such educational institution is directed toward the propagation of a particular religion.

The guidance cites to, and is consistent with, OFCCP’s Directive 2018-03. We provided further context for the Directive in this August 2018 post.

“Specialty Areas” Unique to Educational Institutions

The Guide addresses three “specialty areas” that may surface in compliance reviews of educational institutions: Athletics, Medical, and Online Institutions, and offers insights as to how the contractor – and OFCCP – might approach them.

  1. Athletics

The Guide states that “many specialized factors” (the market, revenue from conference sources, etc.) affect compensation and promotional opportunities for coaches and athletic directors. The Guide says should address such factors in their AAP. (Addressing these in the written AAP is not required by OFCCP regulations.) For example:

  • The existence of written contracts designating job responsibilities and salaries;
  • The level at which performance reviews and merit increases are determined (decisions made by head coaches? Athletic directors?);
  • Whether the physical size of the program plays a role in compensation; and
  • Whether revenue from the program or reputation of the program affects compensation of coaches and directors.
  1. Medical

The Guide recognizes that compensation of medical personnel can be dependent on specific discipline, and encourages contractors to track in their data “major work areas, such as teaching, clinical, or research duties.”

  1. Online Institutions

The Guide acknowledges that, increasingly, institutions function partially or entirely as online schools. These schools may have a majority of instructors who are not full-time employees. It lists practices OFCCP says “the institutions should ensure that its AAP addresses . . .” They include:

  • Define terms such as “faculty, core faculty, and contributing faculty”;
  • Detail recruitment and selection procedures for all staff, especially instructional positions;
  • Detail relevant compensation factors, especially for instructional positions; and
  • Annotate in the Workforce Analysis and Job Group Analysis the actual locations of remote and telework employees.

Again, these are issues that may be relevant in a compliance review, but there is no regulatory obligation to include them in the written AAP.

We will continue to provide updates on OFCCP enforcement trends related to educational institutions.

In an Executive Order issued yesterday, President Trump revoked Obama-Era Executive Order 13495, which provided some protection – a right of first refusal for continued employment – to qualified service workers when a government contract was replaced with a new contract and successor contractor at the same location.  President Trump’s Executive Order provides no explanation for the revocation, but the move was likely influenced by the new Secretary of Labor, Eugene Scalia.

Executive Order (EO) 13495 and its implementing regulations, applied to any contract or subcontract for services entered into by the Federal Government or its contractors covered by the McNamara-O’Hara Service Contract Act.  It required that qualified workers (non-exempt workers covered by the SCA’s requirements) on a covered contract who stood to lose their jobs due to the completion or expiration of a contract be given a right of first refusal for employment with the successor contractor.  Generally, the successor contractor was prohibited from hiring any new employees under the successor contract until qualified workers performing the prior contact were provided the opportunity to accept a job with the successor.  However, EO 13495 applied only to successor contracts for the performance of the same or similar services at the same location.

The revoked Order required the predecessor contractor to provide written notice to eligible employees either via a conspicuous workplace posting or via notices delivered to the employees individually. Federal contractors are no longer required to post or provide any EO 13495 notices. Please note this revocation does not affect contractor obligations with respect compliance with Executive Order 13496.

President Trump’s Order requires the Labor Secretary and others to “promptly move to rescind any orders, rules, regulations, guidelines, programs, or policies implementing or enforcing Executive Order 13495.”  Significantly, the Order terminates immediately any existing investigations or compliance actions based on EO 13495.

You may recall the President has revoked other Executive Orders entered by President Obama, including the “Blacklisting” Order. and there may be more to come.