The Coronavirus Aid, Relief, and Economic Security Act (CARES) provides potential reimbursement to federal contractors whose employees (1) cannot perform work on a “site that has been approved by the Federal Government ” during the coronavirus (COVID-19) public health emergency due to facility closures or other restrictions, and (2) cannot telework because their job duties cannot be performed remotely.

Click here for the full article from our JL Government Contractor’s Industry Group.

The National Industry Liaison Group has worked with OFCCP leadership to clarify contractor obligations and OFCCP expectations for compliance reviews that are moving forward during this unprecedented time.  The below are in addition to the National Interest Exemption recently announced by the Agency.

By e-mail, NILG shared OFCCP has informed it of the following protocols the Agency will put in place going forward:

  • Grant an automatic 30-day extension for submission of AAPs after receipt of Scheduling Letter
  • Grant an automatic additional 30-day extension to contractors who submit their written AAP narrative within 60 days of receipt of scheduling letter (i.e. provide another 30 days for submission of all data reports and analyses)
  • Grant an automatic extension of 14 days, and more commonly of 30 days, for contractor response to information requests, with opportunity for further extensions as needed
  • Conduct 503 focused review onsites via video or phone conference only until contractors begin resuming normal operations

The protocols will allow OFCCP to continue operations to the extent feasible given the current emergency as well as address contractor concerns as their operations become impacted by the pandemic.  The key, as it always should be, is for contractors to communicate with OFCCP during an audit to the best extent possible.

The OFCCP and the NILG recommend contractors concerned about receiving Scheduling Letters during the emergency consider providing an email address for the responsible contractor representative to the applicable Regional Director, with a copy to Deputy Director Patricia Davidson at  Davidson.Patricia@dol.gov.  The OFCCP assures the NILG that

contractors providing this information will receive the Scheduling Letters via email in addition to the mailed copy.

OFCCP and NILG recommend that “contractors who believe the OFCCP is not taking the pandemic emergency into sufficient account, either in general or in a relation to a specific audit,” contact the OFCCP Omsbud, Marcus Stergio,  Stergio.Marcus@dol.gov or 202-693-1174.

NILG and the contractor community appreciate Director Leen’s and the Agency’s swift attention to these matters during these trying times.

Be Safe and Stay Well.

As an update and a clarification to the below post we have learned from EEOC that there is not currently a deadline in place for submission of the 2019 EEO-1 reports.  In fact, EEOC currently does not have authority to collect 2019 EEO-1 Component 1 data.

Since the advent of Component 2 pay data reporting, the deadline for filing EEO-1 reports has been March 31 annually.  Because its authority to collect data pursuant to the previously used EEO-1 form expired September 30, 2019, EEOC has had to seek renewal of authority to collect data using the EEO-1 form, and as a result there is no deadline for submission.

The following appears on EEO-1 Survey login page:

The EEOC is currently in the process of seeking approval under the Paperwork Reduction Act (PRA) to collect the EEO-1 survey for 2019, 2020, and 2021. The EEOC is seeking to collect Component 1 of the survey and to discontinue the collection of Component 2 pay data. See, EEO-1 30-Day PRA Notice. The opening of the collection, as well as the new deadline date, will be announced by posting a notice on the EEOC home page and sending a notification letter to eligible EEO-1 filers. When the survey opens, the EEOC will provide online resources to assist filers with their submissions and the EEOC’s helpdesk will be available to respond to filer inquiries and to provide additional filing assistance (including, for example, guidance on processing mergers and acquisitions and other corporate changes).”

As always we will be back with any new updates.

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Although we are about a week from the current March 31, 2020 deadline for filing 2019 EEO-1 reports, the EEO-1 Portal has yet to open.

That is due, at least in part, to the fact the fact EEOC does not yet have authority to continue to collect Component 1 race or gender data.  On Friday, however, EEOC filed another request for approval with the Office of Management and Budget that, in a bit of housekeeping, seeks a new “control number” that unties the Component 1 data from the prior control number that also authorized collection of Component 2 pay data.  In September 2019, EEOC requested approval to collect Component 1 data under the prior control number, and announced that it would not seek to collect Component 2 pay data.

Aside from the housekeeping effort, EEOC also says that if, in the future, it seeks to again collect pay data, it will provide advance notice and allow for public comment.  In its notice, EEOC says:

Based on the Commission’s evaluation of the public comments…and the agency’s own burden calculations, and because the PRA requires an agency to demonstrate that the practical utility of the information collection outweighs the burden of the collection, the Commission cannot justify continuing to collect Component 2 data.

The EEOC believes that there should be a transparent and open process, aligning with the recommendations in the EEOC-commissioned 2012 study from the National Academy of Sciences (NAS), entitled “Collecting Compensation Data from Employers,” (NAS Study), that the EEOC:

  1. Develops a plan for using pay data before initiating any data collection. Clearly articulating the ultimate uses of the data will help determine both which data elements need to be collected as well as the best approach to collecting the data to ensure the validity, reliability, and utility of the data collected.
  2. Initiates a scientifically sound pilot study to test the pay data collection instrument and the plan for the use of the data; and
  3. Uses a definition of compensation that is measurable, collectable, and meaningful.

The public will have 30 days to comment on EEOC’s request for approval to collect Component 1 data, which also means that employers and federal contractors will not be able to file 2019 EEO-1 reports for at least another 30 days…and probably more.

Please stay tuned and we’ll let you know as soon as we hear anything about a new deadline.

Although we are about a week from what has historically been the annual deadline for filing 2019 EEO-1 reports, the EEO-1 Portal has yet to open.

That is due, at least in part, to the fact the fact EEOC does not yet have authority to continue to collect Component 1 race or gender data.  On Friday, however, EEOC filed another request for approval with the Office of Management and Budget that, in a bit of housekeeping, seeks a new “control number” that unties the Component 1 data from the prior control number that also authorized collection of Component 2 pay data.  In September 2019, EEOC requested approval to collect Component 1 data under the prior control number, and announced that it would not seek to collect Component 2 pay data.

Aside from the housekeeping effort, EEOC also says that if, in the future, it seeks to again collect pay data, it will provide advance notice and allow for public comment.  In its notice, EEOC says:

Based on the Commission’s evaluation of the public comments…and the agency’s own burden calculations, and because the PRA requires an agency to demonstrate that the practical utility of the information collection outweighs the burden of the collection, the Commission cannot justify continuing to collect Component 2 data.

The EEOC believes that there should be a transparent and open process, aligning with the recommendations in the EEOC-commissioned 2012 study from the National Academy of Sciences (NAS), entitled “Collecting Compensation Data from Employers,” (NAS Study), that the EEOC:

  1. Develops a plan for using pay data before initiating any data collection. Clearly articulating the ultimate uses of the data will help determine both which data elements need to be collected as well as the best approach to collecting the data to ensure the validity, reliability, and utility of the data collected.
  2. Initiates a scientifically sound pilot study to test the pay data collection instrument and the plan for the use of the data; and
  3. Uses a definition of compensation that is measurable, collectable, and meaningful.

The public will have 30 days to comment on EEOC’s request for approval to collect Component 1 data, which also means that employers and federal contractors will not be able to file 2019 EEO-1 reports for at least another 30 days…and probably more.

Please stay tuned and we’ll let you know as soon as we hear anything about a new deadline.

In a Memorandum issued yesterday, OFCCP has granted a three-month, national interest exemption and waiver from AAP obligations for new federal contracts “entered into specifically to provide Coronavirus relief.”

In summary, the “exemption and waiver extends to all affirmative action obligations of supply and service and construction contracts, and other obligations as specified in” FAR clauses 52.222-26 (EEO-Executive Order 11246); 52.222.35 (veterans); and, 52.222-36 (individuals with disabilities).

The exemption and waiver, although limited in time (expires after June 17), is broad and suspends the following obligations under EO 1124, Section 503 and VEVRAA:

  • Affirmative action efforts, but not the prohibition against discrimination;
  • Written AAPs;
  • EEO Policy Statement and other posting requirements;
  • The requirement to include the EEO Tagline in job postings;
  • Listing of job openings with state workforce agencies;
  • Union notices regarding the EEO Policy Statement;
  • EEO-1 filing requirements (unless the contractor also has 100 or more employees); and,
  • On-site audit access, but not access to contractor premises for complaint investigations.

OFCCP has also issued helpful FAQs, which explain:

Only new supply & service and construction contracts solely for the specific purpose of providing Coronavirus relief are covered by the exemption.

The coronavirus National Interest Exemption only applies to new supply & service and construction contracts specifically for coronavirus relief efforts. Contractors that hold contracts unrelated to coronavirus relief, and thus were already required to comply with the affirmative action requirements of laws enforced by OFCCP, must continue to do so.

As always, thank you for tuning into our blog and we wish everyone good health through this unprecedented time.  Please take care of yourselves and your loved ones.

As part of its overarching effort to provide federal contractors with better compliance assistance, OFCCP announced this week its Town Hall Action Plan, intended to address issues raised by federal contractors during the seven Town Hall meetings it conducted in 2019.   Based on “consistent themes across the Town Hall meetings,” OFCCP has identified a six-point action plan, with action items intended to implement each point:

  1. Update and develop new resources to assist contractors in conducting outreach to diverse talent pools.
  2. Provide more compliance assistance and resources for contractors to develop effective affirmative action programs and allow for more dialogue with contractors during compliance evaluations.
  3. Enhance avenues for collaboration between contractors.
  4. Enhance resources for protected veterans and their spouses, family, and other associates.
  5. Enhance resources to increase the effectiveness of the Indian and Native American Employment Rights Program.
  6. Enhance resources for disability inclusion.

The Agency had identified a number of action items that should be helpful to all federal contractors.  For example:

  • Outreach Assistance:  “Increase collaboration with organizations to keep the Employment Referral Resource Directory up to date. This directory provides contact information for diverse recruitment resources across the country and is used by contractors when advertising openings to candidates from diverse pools.
  • Protected Veterans:  “Develop new resources (e.g., frequently asked questions and best practices for contractors hiring protected veterans). OFCCP will develop material and update existing VEVRAA resources to include links to existing resources from other agencies and community-based organizations (e.g. the Career One Stop’s military skills translator).”
  • Individuals with Disabilities:  “Develop additional best practices for disability accommodations. OFCCP will use lessons learned that are identified during focused reviews … to address challenges where contractors need guidance in meeting their obligation to provide reasonable accommodation. OFCCP will compile best practices and other resources for contractors gleaned from these focused reviews to assist in this area.”

We look forward to seeing OFCCP’s progress toward implementing the Plan and will continue to blog about those developments.  Stay tuned.

 

On Tuesday, February 18, 2020 the National Industry Liaison Group (“NILG”) and the Office of Federal Contract Compliance Programs (“OFCCP”) held a Compensation Roundtable at the US. Department of Labor in Washington D.C.  Director Leen introduced the program by emphasizing the need for advancement of females to higher level management positions, the right to parental leave for both men and women, and his continuing commitment to advancing his administration’s agenda.   You may recall that on February 3, 2020 President Trump announced his intention to nominate Director Leen to be the next Inspector General at the Office of Personnel Management.  Director Leen emphasized this will not impact his current agenda at OFCCP and that he expects OFCCP to issue many new directives or guidelines while he remains at the Agency, including:

  • a Mediation Directive designed to assist the Agency and Contractors in resolving disputes before enforcement referral;
  • a new Transparency Directive to provide for further disclosures of OFCCP findings prior to the issuance of Pre-Determination Notices;
  • an Efficiency Directive supporting prompt and effective resolution of compliance reviews.

Director Leen also noted that the Agency remains “focused on focused reviews.”  Contractors already have been selected for the next round of reviews, but the Agency still is working on preparation of the announcement letters.

Director Leen also shared that the Agency will be issuing new compensation guidance that he hopes will incorporate some of points to be made panel at the Compensation Roundtable.

The remainder of the event consisted of a panel discussion among a number of contractor representatives, including attorneys, labor economists and statisticians, and OFCCP representatives Robert LaJeunesse, the Branch Chief for Expert Services/Acting Director of Enforcement and Labor, and Economist David Garber.

The contractor side of the panel discussion was broken down into what is perceived as good, the bad (and even the ugly) with Compensation Directive 2018-05, and recommendations for change.

The Good

All of contractor representatives acknowledged that much good has come from Directive 2018-05, OFCCP’s current Compensation Directive.   For example, the panel fully supported the Directive’s:

  • recognition of the importance of analytical differences between modeling for base v. other forms of compensation;
  • focus on contractor’s own pay systems;
  • emphasis on increased predictability and transparency;
  • recognition of need for the use appropriate control variables,
  • approval of outlier review; and
  • use of age as a proxy for experience in appropriate circumstances.

The “Not So Good”

However, the panel also focused on the “not so good” side of Directive 2018-05 and its enforcement by OFCCP.   The contractor representatives criticized OFCCP’s narrow focus on regression as the only tool for compensation analysis.  This focus has caused OFCCP to force the aggregation of non-similarly situated employees into the same Pay Analysis Group (“PAG”) for the sole purpose of ensuring adequate pool size and statistical power.   For example, OFCCP has formulated rules including that PAGs must have at least 30 employees, at least 10 employees for every variable included in the model, and at least 5 observations for every variable.  Through strict adherence such rules OFCCP has inappropriately aggregated  non-similarly situated employees, dropped variables that help explain pay variability, and combined dissimilar variables that are not appropriately interacted.   The result is that the Agency: (1) creates PAGs that do not conform to Title VII of the Civil Rights Act of 1964’s mandate that comparisons be made only of similarly situated employees; (2)  ignores important aspects of a contractor’s own compensation systems; and (3) combines dissimilar levels of categorical variables.

Other issues raised by the panel include OFCCP’s lack of a definitions related to indicators of systemic discrimination, practical significance and tainted variables. For example the panel posited that OFCCP is inappropriately assuming that mere “correlation” is enough to show a variable is tainted.  In fact, OFCCP needs to show, among other things, how that a variable is related to a specific pay process that discriminates to establish that a variable is tainted.

Contractor Recommendations

To address these concerns, the contractor representatives recommended that OFCCP should:

  • use regression analysis only when appropriate, and use other forms of analyses, such as rank sum, T-Tests adjusted for degrees of freedom, matched pair/cohort analyses, a combination of such tools,  when not.
  • carefully evaluate a contractor’s pay system and include what it learns in its models – i.e., how does the contractor pay; what factors does it consider, etc.;
  • group similarly-situated employees carefully and in accordance with Title VII; OFCCP should not aggregate, add or drop groups or variables solely for the purpose of statistical power;
  • accept the contractor’s units of analysis if at least 70% of the facility’s workforce is covered by some type of legitimate compensation analysis;
  • provide a specific definitions related to systemic discrimination and tainted variables; and
  • adopt the following rules for practical significance:
      • if there is a less than a 2% pay disparity, regardless of whether statistical analysis results are significant, there should be no further review.
      • if there is 2 to 5% pay disparity, OFCCP should review differences with understanding that result may not be practically significant.

OFCCP’s Response

Bob LaJeunesse and David Garber responded to many of the items noted above.  Both emphasized that OFCCP is investigating for indicators of systemic discrimination, which are often not isolated to a single group of similarly-situated employees.  According to OFCCP, its focus on systemic issues necessitates a broader view of PAGs, especially in cases where trend or other analyses show a pattern favoring one group over another.   If there are a series of extremely small units of analysis, which show such a trend, then OFCCP cannot commit itself to using such small groups as PAGs because such tests do not allow one to control for legitimate differences in pay.  In sum, OFCCP claims it is balancing the similarly situated standard with the “need” for statistical power.

In defending such practices, Mr. LaJeunesse and Mr. Garber emphasized that the Agency models its regression analyses in a very careful and deliberative way.   For example, OFCCP uses a “nearest nesting” approach to avoid the aggregation of dissimilar variables.   Mr. Garber stated that it is “common place in social science statistics to engage in variable fusion,” such as the combination of performance ratings into larger groupings.  They both further emphasized that OFCCP looks at more than just differential distributions is determining a tainted variables and that its models “follow what we learn, not the other way around.”

Conclusion

The panel discussion succeeded in highlighting several points of disagreement between contractors and OFCCP regarding the best means to investigate potential compensation discrimination.  At the same time, certain points of agreement were reached during the discussion.   For example, both sides agreed that pay discrimination is an important societal issue that the Agency should be investigating and remedying.  In addition, all agreed that contractors and OFCCP alike benefit from transparency and consistency when it comes to the process and the methods of compensation analysis.

At this point the Agency committed to taking the recommendations under review and continuing the dialog.

As of today, federal contractors have a new tool for understanding a variety of compliance obligations enforced by the Office of Federal Contract Compliance Programs (“OFCCP”). The Agency has launched a Contractor Compliance Institute (“CCI”) where contractors can take free, on-demand courses on a variety of OFCCP-related topics.

The CCI is designed to help contractors learn more about their obligations; evaluate current personnel and affirmative action practices; and stay current with OFCCP initiatives, according to a news release from OFCCP.

To access the courses, contractors must create an account at the CCI website. After registering, the contractor is directed to a training module depending on the organizational role of the participant. There is currently posted a single training for each of the following:

  • Compensation Manager
  • Hiring Manager
  • Human Resources Manager
  • Front Line Supervisor/Manager
  • Recruiter

The CCI website also includes definitions of Section 503 Disability Focused Reviews and Functional Affirmative Action Plans (FAAPs), as well as links to OFCCP’s existing pages that contain downloadable posters and self-identification forms.

The Agency created the tool in furtherance of its commitment to providing meaningful technical assistance to contractors.

It seems the end has finally come for at least one part of the pay data reporting story.  Today, Judge Chutkan ordered the EEO-1 Component 2 pay data reporting portal closed.  The closing of the portal signals the end of the required collection of pay data for 2017 and 2018 from eligible employers.

The direction for the next turn in the story hinges on what EEOC decides to do about collecting pay data going forward.  Stay tuned.