As scheduled, EEOC and NORC have now provided employers with a way batch upload their EEO-1 Component 2 pay data.  Instructions and details are provided on the More Info Page on the NORC EEO-1 Component 2 website.  Specifically, the following documents are currently available:

The file upload functionality is accessible after securely logging into the Component 2 EEO-1 Online Filing System via the LOGIN to File page.

Additionally, there are new FAQs available on the website, including questions and corresponding answers on topics such as PEO employers, spinoffs and reporting on non-binary gender employees.

Unlike the EEO-1 Component 1 report, the new FAQs state employers are allowed to report data for non-binary gender employees through a manual narrative input in the comment box on the Certification Page.

The FAQs are also now available in a downloadable pdf format for ease of future use and reference.

 

As previewed in the Spring regulatory agenda, the Office of Federal Compliance Contract Programs (OFCCP) has proposed a new rule to clarify aspects of a religious exemption available to federal contractors. In the proposed rule, the agency said it intends to address concerns from religious organizations that ambiguity in the exemption left them reluctant to participate in federal contracts.

The proposed rule was published August 15 in the Federal Register. OFCCP will accept public comments on the rule for 30 days, until September 16, 2019.

The rule would clarify the religious exemption in Executive Order 11246, which includes anti-discrimination obligations for federal contractors. The exemption allows religious organizations to prefer individuals of a particular religion, while still requiring adherence to other anti-discrimination provisions. The rule comes one year after OFCCP issued a Directive reminding its staff to tread lightly when dealing with religious contractors and “proceed in a manner neutral toward and tolerant of . . . religious beliefs.”

As proposed, the rule would clarify that:

  • The exemption covers “not just churches but employers that are organized for a religious purpose, hold themselves out to the public as carrying out a religious purpose, and engage in exercise of religion consistent with, and in furtherance of, a religious purpose.”
  • Religious employers can condition employment upon acceptance of, or adherence to, a religious tenet, provided that they do not discriminate based on other protected bases.
  • Define terms such as “Religion,” “Particular Religion,” and religion “As understood by the employer.”

The rule does not explicitly mention sexual orientation or LGBTQ protections. However, it does cite Masterpiece Cakeshop, the recent U.S. Supreme Court decision involving a business owner’s decision to deny service to gay customers based on the owner’s religious beliefs.  In a news release, OFCCP said it considered that case while drafting the rule, in addition to other Supreme Court cases, statutes, and executive orders.

Today’s proposed rule helps to ensure the civil rights of religious employers are protected,

said Patrick Pizzella, acting U.S. Secretary of Labor.

“As people of faith with deeply held religious beliefs are making decisions on whether to participate in federal contracting, they deserve clear understanding of their obligations and protections under the law.”

The proposed rule also comes at the same time it has been reported by Bloomberg Law that the Department of Justice and EEOC are seemingly taking differing positions on LGBTQ rights before the Supreme Court.

Jackson Lewis will continue to monitor developments related to the proposed rule.

Though we may be in the height of summer, there is no slowing down for OFCCP.  Following last week’s ILG National Conference, OFCCP has continued to release additional guidance and assistance for contractors.  Most recently, OFCCP has introduced its Ombudsperson and unveiled a Contractor Assistance Portal.

Ombudsperson

In September 2018, OFCCP first announced it would be reviving the role of the Ombudsperson.  After a lengthy search, OFCCP has selected Marcus Stergio to fill the role in the agency’s national office.

According to OFCCP’s announcement

Marcus’ first assignment will be to design and implement OFCCP’s Ombud Service to facilitate the fair and equitable resolution for specific types of issues raised by OFCCP stakeholders in coordination with regional and district offices.

Fittingly, his prior experience includes serving as the primary administrator of the dispute resolution process for a number of multi-national organizations, companies and institutions. Per OFCCP’s press release, he received his Master’s degree in conflict resolution from the University of Massachusetts, Boston and his Bachelor’s degree from Northeastern University. Stergio also took part in Harvard Law School’s Program on Negotiation and Dispute Resolution in 2013.

The Ombud Service fits well into the agency’s principal of transparency as the role, according to Director Leen will

provide an independent perspective and facilitate communication between external stakeholders and OFCCP regional and district offices.

OFCCP also recently announced the appointment of a Deputy Director, Bob Gaglione.  Deputy Director Gaglione had a distinguished 30-year legal career in San Diego before joining the agency.

We are looking forward to getting to know Marcus and Deputy Director Gaglione and having the opportunity to work with them both.

Contractor Assistance Portal

Adding to its continually-expanding contractor resources, and in furtherance of its Town Hall Action Plan, OFCCP has unveiled a Contractor Assistance Portal.  Discussed previously in some instances as an “on-line” HelpDesk, the Agency has developed to portal as a place

where companies doing business with the federal government come together to learn solutions to common U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) compliance problems and challenges.

Specifically, OFCCP envisions the portal to be a place where contractors can ask questions (without attribution) to receive verified answers, search our library of frequently asked questions, and access helpful reference and compliance assistance materials.  OFCCP notes the agency intends to “continuously update the online help desk with new features and compliance assistance resources.” 

Stay tuned for more . . .

Under the leadership of Craig Leen, OFCCP has made a renewed commitment to providing technical assistance to contractors.  True to their word, and in furtherance of its Town Hall Action Plan, OFCCP announced on Friday the release of a number of new technical assistance guides (TAGs), with more on the way.  Interestingly, Director Leen did not make any formal announcement of their upcoming release during last week’s ILG National Conference.

These new TAGs are in addition to the previously released “What Contractors Can Expect“ guidance.

Record keeping

OFCCP has released three TAGs to address record keeping obligations:

Brief in nature, the TAGs set out in a quick glance the record keeping obligations for the three regulations.

Applicant Tracking

The agency has also provided guidance around applicant tracking compliance, including definitions and record keeping obligations:

Posting and Notices

The agency additionally, published a lengthy Posting and Notices Guide that provides an explanation of the required posting and notices as well as handy check-lists for self-auditing.

General Information

In addition, OFCCP has published a guide entitled “OFCCP at a Glance” explaining the agency’s mission and enforcement responsibilities.

It is our understanding OFCCP is working on TAGs for Construction Contractors, Institutions of Higher Education as well as Supply and Service Contractors.  We will update as soon as those guides are available.

Well, another ILG National Conference is in the books.  This year’s conference highlighted the continued return to a more collaborative relationship between contractors and OFCCP as well as the agency’s commitment to its four principles.

On the final day of the conference, attendees heard from practitioners as well as a panel of OFCCP Regional Directors, Office of the Solicitor , OFCCP leadership, and again from Director Leen who closed out the conference with a short Question & Answer session.

The Regional Directors and Solicitor panel shared information on OFCCP’s New Student Worker FAQ as well as the agency’s treatment of foreign nationals during audits.  They also discussed the available guidance on pre-employment testing and the status of current training being provided to Compliance Officers to get them prepared to undertake Focused Reviews.

The panel also credited contractors for improving the timeliness of submissions while also acknowledging that improvements can still be made in recordkeeping.  They also encouraged contractors to do more “cross training of employees.”

In his closing comments to the conference, Director Leen discussed his intent behind the ability to obtain an extension during an audit with the timely submission of a contractors affirmative action plan as well as the expectation contractors should be receiving, proactively, information from compliance officers as to any findings at the end of the desk audit.

In the area of “breaking news” Director Leen announced OFCCP’s has completed its search for an Ombudsperson, who will start the position on Monday, August 5, 2019.  And finally, he shared with conference-goers that he has instructed OFCCP staff to review parental leave policies for equity.  This is a good reminder for contractors to review OFCCP’s FAQs on the matter.

All-in-all this year’s conference seems to be a success.  There is a lot on the agenda for OFCCP and, if the conference is any indication, the relationship between the Agency and contractors seems to be headed back in the right direction.

We are already looking forward to seeing you in 2020 in National Harbor, Maryland for an election-year ILG National Conference!

Day 2 of the 2019 ILG National Conference in Milwaukee started with a favorite guest – EEOC Commissioner Victoria Lipnic.  Commissioner Lipnic last addressed the ILG National Conference in 2016, during which time, as she reminded attendees, she was likewise talking about pay data reporting, she had just created the Chief Data Officer role at EEOC and it was several months before the breakout of the #metoo movement.

With respect to the new EEO-1 Component 2 pay data reporting tool, or the “elephant in the room” as she called it, Commissioner Lipnic shared insights and history about the litigation, Court’s Order and how we got where we are today.

She expressed to conference-goers that

the goal is to have everyone comply by the end of September

to satisfy Judge Chutkan’s Order.  She additionally acknowledged that collection of the data is “not easy”; that having to go back to 2017 “is not in any way easy” but that is “what a federal judge has ordered.”  In Commissioner Lipnic’s opinion,

this is no way for public policy to be made.

From this, she offered a bit of advice of a lesson learned by the agency:

If you want your interests to be heard, you must intervene.

She went on to explain how the agency is going to “take a breath” and learn from what they get in the data – to undertake “an honest assessment”.  She desires a bipartisan and open process to learn about the utility and burden associated with the report, and encouraged participants to keep track of the burden associated with filing the required reports.  In her view,

balancing burden and utility is what good policy should be about.

Reflecting back how the agency dealt with issues in the past, she recounted “we took our time to think about it.”

During a subsequent conference session on the modernization of the EEOC, EEOC’s Chief Data Officer, Chris Haffer, answered a few questions about the Component 2 reporting, including whether there would be an “automatic extension” of the September 30th reporting period.  At this time, Dr. Haffer said there would be no automatic extension.  He also mentioned that “data clean up” would likely take until at least January 2020 after which the files would go to EEOC for analysis of data quality and utility.

Following her remarks on pay equity, Commissioner Lipnic turned to another of her favorite topics – age discrimination.  She pointed out that “millennials are just a few years away from being covered by the Age Discrimination Act.”  She also touched briefly on the fact of the 10 year anniversary of the ADA Amendments Act, which increased protections for individuals with disabilities.

As part of a generous Question and Answer session, Commissioner Lipnic answered a particularly simple, yet probing question:  As federal contractors, what do you want us to focus on?  Her response was equally as simple and thought-provoking.  She encouraged contractors to “lead the way in recruiting for populations you traditionally have not gone to before.”

Commissioner Lipnic concluded her remarks by reciting an inscription from the George Washington Masonic National Memorial:

 Let prejudices and local interest yield to reason. Let us look to our National character, and to things beyond the present period.

 

The 2019 ILG National Conference being held in Milwaukee, Wisconsin has officially begun.

OFCCP Director Craig Leen opened the conference with an energized keynote addressed that touched on the agency’s work on behalf of individuals with disabilities and veterans, as well as OFCCP’s continued action in furtherance of the four “bedrock” principles announced at last years’ ILG National conference.

Focused Reviews

Director Leen opened his remarks by suggesting if conference goers remember one thing about his speech they should remember

it is time in this country to treat individuals with disabilities the same.

From that opening sentiment Director Leen explained OFCCP’s continued commitment to individuals with disabilities through Focused Reviews is because

the numbers cry out for action.

The numbers to which he referred are the low hiring rates and wide pay gap for disabled individuals, as well as the relatively low average cost of accommodations.  Director Leen described the disabled community as a

tremendous untapped resource that can help the country succeed.

In addition to discussing the agency’s use of focused reviews to “make a significant positive impact” for individuals with disabilities, Director Leen also shared with conference attendees the agency’s developing plans for VEVRAA Focused Reviews.  Specifically, Director Leen shared that the agency is hoping to publish a listed of veteran specific focused reviews around Veteran’s Day, which occurs in early November.

Director Leen then transitioned to his “hypothesis” that

a lot of compensation issues [the agency] is finding are promotion issues in disguise.

As a result, he believes OFCCP should be looking a promotions, specifically the intersection of race and gender and disability status and other statuses.  In his words, the agency needs to look into promotions because

it is not about equality of outcome, but equality of opportunity.

Director Leen’s keynote address was followed in the afternoon by an informative breakout session in which OFCCP leadership provided additional insights into the Agency’s approach to Section 503 Focused Reviews.  The team, which was comprised of members of the national office, the Solicitor of Labor’s office and regional leadership, provided information about the agency’s expectations for focused reviews and spent a good deal of time answering questions from the audience.  An important take away is contractors scheduled for Section 503 Focused Reviews will receive an On-Site plan prior to their mandatory on-site review, as well as an “What to Expect” Guide, in addition to the guidance available on the Section 503 landing page.

Four Principles

Following his discussion of Focused Reviews, Director Leen went on to share the agency’s current progress on the four principles – Transparency, Efficiency, Certainty and Recognition.

He previewed that OFCCP would be imminently releasing a new Opinion Letter (on FCC contracts giving rise to OFCCP jurisdiction) as well as new FAQs regarding Functional Affirmative Action Plans (FAAPs).

With respect to Transparency, Director Leen reiterated his position that the field should be sharing reasons for an information request when the request for information is made.  He acknowledged however that

it takes a while to steer the boat.

He also shared that OFCCP is looking at a program that would allow non-violating, top-performing companies, to enter into an Early Resolution Program (ERP) agreement with the agency.

Director Leen also addressed the Agency’s “internalization” of the Analogic compensation decision.  He shared he believed OFCCP’s approach is consistent with the case’s holdings by looking at a company’s established pay programs, prioritizing cases that have both statistical and anecdotal evidence, and trying to identify the actual policy or practice causing the disparity.

Efficiency

Reiterating comments he’s made in the past, Director Leen discussed the rescission of the Active Case Enforcement Directive in favor of OFCCP’s current enforcement Directive which marries Active Case Management with Active Case Enforcement principles.  Specifically, Director Leen stated

The evidence doesn’t support the hypothesis that if you spend more time you find more discrimination.

Instead, OFCCP is trying to spend less time so they can “touch” more contractors.

Certainty

Moving down the list of principles, Director Leen acknowledge the Certainty principle ties in with the Transparency principle – noting the agency is trying to provide guidance so contractors have certainty about their obligations under the law noting examples such as FAQs, Opinion Letters, and Technical Assistance.  He also shared that the agency hopes to “very soon” launch its Online HelpDesk so everyone has access to answers to questions so “everyone is treated the same.”

Recognition

Touching on the final principal, Director Leen encouraged organizations to apply for the Excellence in Disability Inclusion Award, noting it is awarded on an establishment (not contractor) basis.  He also shared the Agency is working on a way to close audits “with distinction” to reward contractors who are not only in compliance, but who are excelling in their compliance.

Director Leen ended his remarks where he began – inclusion of individuals with disabilities.  He shared that he hoped contractors “take to heart” what the agency is saying about Section 503 compliance and looking at inclusion within their organizations.

 

As required, EEOC has filed its scheduled update with the Court regarding the progress of collection of the new EEO-1 Component 2 pay data report.

The report is brief, but notes EEOC is still on schedule to allow a data file upload function and validation process as an additional method of reporting no later than August 15, 2019.

The Agency also reports is it scheduled to send out “reminder” notices and e-mails to filers with login information a various times throughout August.

Finally, EEOC reports it is still “finalizing its analysis of the response rates for EEO-1 data submitted over the
last four years to be used to assess whether the EEOC is ‘on track’ to ‘complete’ the Component
2 data collection by September 30, 2019.

EEOC reports it “cannot begin to project what percentage of employers will submit Component 2 data
by September 30, 2019” and will not be able to do so until at least a significant percentage of employers have completed the report.  EEOC did confirm some employers have started submitting the Component 2 reports.

The official rules and authority that govern OFCCP’s actions are set forth in the federal regulations at 41 CFR 60.  These regulations go through notice and comment, as well as substantive review to ensure the appropriate balance of OFCCP’s jurisdiction and tools against the burden they pose on the contractor community.  Due to the formal procedures necessary to amend the regulations, changes can be slow to develop and are long lasting.

But, OFCCP has other tools to change its rules and approach that require less pomp and circumstance.  These sub-regulatory mechanisms include issuing new Directives, updates to the Federal Contractor Compliance Manual (often referenced as the FCCM), and publishing new Frequently Asked Questions and Answers (FAQs).  Because these methods do not involve public notice and comment periods, they do not actually change contractor requirements—but they do provide guidance on how OFCCP intends to proceed in its mission.

With that background, on July 23, OFCCP announced that it had released new FAQs on Validation of Employee Selection Procedures, Practical Significance in EEO Analysis, and Project-Based or Freelance Workers.

  1. Validation of Employee Selection Procedures

OFCCP’s new FAQs on validation translate the key takeaways from the Uniform Guidelines on Employee Guidelines on Employee Selection Procedures, which are a part of OFCCP’s regulations (41 CFR 60-3), into plain English.  In short, “any measure, combination of measures, or procedure that a contractor uses to make employment decisions” is a “an employment test” that must be “validated” by a subject matter expert if it causes adverse impact.

This information is not new, but the FAQs help make it more digestible.

  1. Practical Significance in EEO Analysis

The Agency’s FAQs on practical significance is an important regulator to its statistical approach.  Specifically, these FAQs recognize that “severe disparity in employment opportunities or outcomes reflects meaningful harm to the disfavored group.”  The FAQs also explain how OFCCP will measure practical significance and that the Agency will consider it “as part of a holistic evaluation of the review.”

  1. Project-Based or Freelance Workers

In our growing “gig-economy” world, these FAQs provide meaningful guidance on who contractors should include in their AAP analyses.  Specifically, OFCCP’s new guidance clarifies that project-based or freelance workers are “typically [] classified as independent contractors rather than employees” and that “independent contractors should not be included in the contractor’s AAP.”

(OFCCP had previously explained the specific approach it will follow to determine if a worker is an employee or independent contractor – not surprisingly –  in another, earlier FAQ.)

We recommend staying up to date on these FAQs.  They were important enough to OFCCP to issue them, and they provide guidance the Agency will expect contractors to understand.

Functional affirmative action plans (FAAPs) are not new.  While the regulations require AAPs be prepared on an establishment-basis, OFCCP has permitted contractors to structure their AAPs by “function” or “business unit” – with Agency approval.

Implicitly, the Agency’s 2013 Directive on the subject recognized that business structures had evolved since the 1960s.  Establishment-centered chains of command were fading, and geographically diverse teams were rising.  Since then, this workforce evolution has only gained steam, including a substantive revision in 2016.

Dating back to town hall sessions in early 2018, the current OFCCP administration under Craig Leen has been doing some deep thinking on how to “best” incentivize contractors to adopt AAP structures, that may better reflect how recruiting is done in certain organizations, and empower them to better meet the goals of Executive Order 11246.  If contractors are not organized by establishment, why should their AAPs be so rigid?

In answer to that question, OFCCP has issued an updated FAAP Directive.  OFCCP summarized the highlights of the update as follows:

  • OFCCP will no longer consider compliance history when reviewing a request for a new FAAP agreement or termination.
  • The agreement term is extended to five years, up from three years.
  • There will be a minimum of 36 months between compliance evaluations for a single functional unit. This is 12 months longer than an establishment review.
  • Complete FAAP applications will be determined within 60 days. Historically, there was no deadline.
  • OFCCP no longer requires that FAAP contractors undergo at least one compliance evaluation during the term of their FAAP agreement.

Procedurally, these changes reduce the burden of a FAAP Agreement by extending its term and committing to act on all applications within 60 days.  And, substantively, these changes may seem advantageous —audits are no longer required, and should they occur each plan would be immune from a second audit for a year longer than an employer who prepares establishment plans.

There are a multitude of issues to considering before changing to a FAAP program.  If you are assessing whether a FAAP is right for your organization, please reach out—we’re happy discuss.