In a year in which OFCCP has proposed and released more new and updated regulations than any other in recent memory, it looks as though they are on track to add new Sex Discrimination Regulations to the list.

Late last week, OFCCP released to OMB (the Office of Management and Budget) the Agency’s draft “final” regulations prohibiting Discrimination on the Basis of Sex, which the agency first proposed in February of this year.  While OMB review is one of the later stages in the regulatory process, the regulations are not final.  In fact, the content of the regulations OFCCP sent to OMB are not public and will not be known until OMB completes its review.   The latest schedule projects December 2015 for finalization of the rules.

Since the previous guidelines have been in effective since the 1970s, its guaranteed the new regulations will bring significant changes.  Stay tuned for updates as they become available.

Following the trend set by the Pay Transparency Executive Order 13665 and Governor Jerry Brown’s signing of the California Fair Pay Act, this week New York Governor Andrew M. Cuomo (D) signed a series of bills aimed at significantly strengthening fair pay, “pay transparency” and other legal protections available in the workplace.

The five new bills impact New York employers in the following ways:

  •  Fair Pay and “Pay Transparency”:  S. 1 / A. 6075 adds a number of protections for employees in New York, including: (1) prohibiting employers from discriminating against an employee who inquires about, discusses or discloses his/her wages or the wages of another employee; (2) narrowing the exceptions available to employers under N.Y. Labor Law 194, the state law that prohibits differentials in rate of pay due to sex; and (3) increasing the amount of damages available to an employee for a willful violation of N.Y. Labor Law 194.

 

  • Sexual Harassment:  S. 2 / A. 5360 eliminates entirely the current 4 employee coverage threshold for employers under the New York State Human Rights Law (“NYSHRL”), but only as it relates to sexual harassment protections.  According to the bill, more than 60% of New York employers have less than 4 employees, and these employers will now be covered.

 

  • Collection of Attorney’s Fees By Successful Plaintiffs:  S. 3 / A.7189 allows plaintiffs to recover attorneys’ fees where an employer is found liable for committing an unlawful discriminatory practice in employment or credit discrimination cases involving sex under the NYSHRL.

 

  • Familial Status Discrimination: S. 4 / A. 7317 prohibits employment discrimination based on familial status under the NYSHRL.

 

  • Accommodations for Pregnancy-Related Conditions: S. 8/A. 4272 requires/clarifies that employers must provide reasonable accommodations for pregnancy-related conditions, unless doing so would cause an undue hardship to the employer.

 

These bills become effective 90 days after enactment and will have a substantial impact on employers throughout New York.  This likely will not be the last state we see following this growing trend.  Stay tuned for the latest updates and further insights on the implementation and implications of these new bills.

As the latest example of the heightened focus on addressing pay discrimination, on October 6, 2015, California Governor Jerry Brown signed what many are calling the toughest equal pay law in the country – the California Fair Pay Act, an initiative designed to close the gender wage gap in the state.

At the heart of the Act is a requirement for employers to demonstrate any gender “wage differentials” are the result of legitimate considerations, and not because of sex discrimination.   And the reason why the Act is being heralded as one of the toughest in the country is because it establishes that employees of the opposite sex must be paid for “substantially similar work” rather than an “equal work” requirement.  Additionally, the Act provides only four options for legitimate explanations for the differences in pay:

(A) A seniority system.

(B) A merit system.

(C) A system that measures earnings by quantity or quality of production.

(D) A bona fide factor other than sex, such as education, training, or experience. This factor shall apply only if the employer demonstrates that the factor is not based on or derived from a sex-based differential in compensation, is job related with respect to the position in question, and is consistent with a business necessity.

For these reasons, its imperative California employers, undertake special care to perform a privileged, proactive pay analyses designed uncover any unexplained differences in pay.  This proactive tool, if performed correctly, will enable employers to learn “what they don’t know” about their pay systems and resulting employee compensation and address any issues before they become problematic.

In addition to these stringent non discrimination standards, the Act takes a page from the recently finalized federal Pay Transparency regulations and prohibits retaliation against employees who discuss or disclose information about compensation.

Stay tuned for more information and insights on the implementation and implications of this new law.

As part of its ongoing effort to provide employers with tools to educate and inform employees and non-employees about affirmative action obligations, OFCCP has released a new disability self-identification public service-like video entitled Disability Inclusion Starts With You. 

Coinciding with its recognition of National Disability Employment Awareness Month, the Agency invites employers and community organizations to download the video and use it as a way to inform employees (and potential employees) about the importance of self-identification.  The video also explains the regulatory obligation employers have to request this information and emphasizes the voluntary nature of the process.

The video and additional information can be found of OFCCP’s webpage.

This week OFCCP announced a pair of settlements in cases alleging systemic hiring discrimination.  The payment of back wages to, and commitment to hire allege victims, were part of the settlements in both cases.  In the most recent settlement, OFCCP alleged a contractor with $35 million in federal contracts denied jobs to 145 female applicants for pharmacy attendant positions. While denying liability, the contractor agreed to hire 11 female class members and pay $400,000 in back wages with interest to the 145 females who were denied positions.

As has been the case in recent OFCCP settlements, both reviews involved alleged discriminatory selection practices in the hiring of entry-level positions with large numbers of applicants.  As part of its allegations in both cases, OFCCP cited to a lack of employment records reflecting the adherence to a consistent hiring practice as part of the contractors’ discriminatory practices.  These cases serve as good reminders that having in place proper record keeping and retention policies as well as accurate applicant tracking protocols, including the use of strategic disposition codes, is essential for defending against claims of alleged discriminatory hiring.

 

During a week in which Washington D.C. experienced a historic visit from the Pope, those in the government contractor community had a celebration of their own – the 50th Anniversary of the signing of Executive Order 11246.  The celebrations kicked off on September 24, 2015 – the actual 50th anniversary – with a celebratory reception hosted by The OFCCP Institute.  Numerous former OFCCP Directors joined the celebration and shared memories of their time with the Agency.

In addition to reminiscing about the history of the Executive Order and celebrating the contractor community’s achievements in furthering the goal of equality in the American workplace, the reception was also a time to focus on the future and the Order’s impact on generations to come.

As part of the evening’s celebrations, The OFCCP Institute unveiled a new scholarship for Washington D.C. high school students.  In its inaugural year, the scholarship fund will award $40,000 in scholarships based on essay submissions on the importance of Executive Order 11246.

The event also featured a preview of a full length documentary about the history of the Executive Order.  Once complete the video will become part of the National Civil Rights Museum in Memphis.

Continuing the celebrations the next morning, the U.S. Department of Labor hosted an event at the Department of Labor.  Secretary of Labor Thomas Perez addressed attendees in the standing-room only Cesar E. Chavez Memorial Auditorium.  The crowd also heard from Congressmen James E. Clyburn and G.K. Butterfield, the Chair of the Congressional Black Caucus.

During her address, OFCCP Director Pat Shiu announced the upcoming release of an educational video addressing the importance of Section 503 and the need for self-identification.  Following Director Shiu’s remarks, Secretary Perez moderated a panel discussion of the history and impact of the Executive Order.

All in all, it was a historic week in Washington D.C. and a wonderful celebration of the impact and import of Executive Order 11246.

On September 11, 2015, OFCCP published the Final Rule implementing Executive Order 13665 – Prohibitions Against Pay Secrecy Policies and Actions. The Final Rule will be effective for contracts or subcontracts over $10,000 entered into or modified after January 11, 2016.

The “Pay Transparency” Executive Order amends Executive Order 11246 and the Equal Opportunity Clause to prohibit policies and practices which prevent applicants and employees from freely discussing their pay.

Prohibitions and Exclusions

The Final Rule prohibits contractors from:

(1) Discharging or discriminating against;

(2) Any employee or applicant for employment;

(3) Because the employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant.

But the rule is not absolute. OFCCP has made clear that contractors and contractor employees are not required to disclose information to applicants or employees regarding the pay of other employees or applicants. Rather, the Rule simply prohibits adverse action against those who permissibly discuss or inquire about pay.

Posting Requirements

The Final Rule also requires dissemination of a Pay Transparency Policy Statement prescribed by OFCCP. The Statement cannot be modified and must be:

  • Included in existing employee handbooks or manuals; and
  • Disseminated to applicants and employees by either posting it electronically or conspicuously posting it physically where applicants and employees can see it.

Additionally, the “EEO is the Law” poster will be updated to include a provision regarding pay transparency and employers will be required to post the updated poster (or the available supplement) if they enter into or modify contracts or subcontracts over $10,000 after January 11, 2016.

Best Practices

In addition to the requirements of the final rule, employers may want to consider the following:

  • Review your policies, practices and personnel documents: Amend them as necessary to avoid any implication they either prohibit or “tend to prohibit” applicants or employees from discussing pay. If a policy or practice might “tend to prohibit” such discussion, it may not be a defensible basis for disciplinary action.
  • Determine which jobs have compensation “essential functions:” Does a staff member responsible for shredding confidential information, such as pay reports, have access to compensation information as an essential job function? Does an administrative assistant who reviews sensitive emails, including emails regarding pay, have access to pay information as an essential function?

 

Access to compensation information may be considered an “essential job function” if such access is either necessary to perform a job function or routinely-assigned task; or the duties of the job include protecting and maintaining the privacy of personnel records. Arguably, both the staff member and assistant in the examples above have access to pay information as an essential function.

It may be important to review job functions and job descriptions to make that determination, and to amend job descriptions, as necessary, to reflect that essential function. As with the ADA, a job description may be one way of proving the essential function.

  • Train compensation employees: While contractors will not want to train all employees regarding the Final Rule, they may want to train those with access to pay information regarding their duties under the Rule. The staff assistant responsible for shredding payroll documents may need direction that any pay information gathered in the performance of her job may not be disclosed under the Final Rule or according to her job duties.
  • Train talent acquisition employees: Additionally, employers should consider training talent acquisition personnel and hiring managers on the prohibitions of the final rule to ensure no adverse actions are taken against applicants and/or employees who rightfully engage in discussions about their pay.

 Additional information, including FAQs, may be found on the OFCCP Website.

On February 12, 2014 President Obama signed Executive Order 13658 establishing a minimum wage for federal contractors.  Effective January 1, 2015, the minimum hourly wage for workers performing work on covered contracts was $10.10.  The Executive Order gave the Secretary of Labor the authority to determine the hourly rate for subsequent years.

With this authority, the U.S. Secretary of Labor announced the new minimum hourly rate effective January 1, 2016 will be $10.15 – a $0.05 per hour increase.  The new minimum wage for tipped employees covered by the executive order will increase as well effective January 1, 2016 to $5.85 per hour.

The EEO-1 Joint Reporting Committee has extended the deadline for filing this year’s EEO-1 Reports.  The new deadline to file reports is now October 30, 2015.

This additional 30 days gives employers much needed time to adjust to and incorporate the new filing requirements.

There has been no extension at this time of the VETS-4212 reporting deadline.  The deadline to file the VETS-4212 reports remains September 30, 2015.

OFCCP announced this morning the release of the anticipated final rule implementing Executive Order 13665, commonly referred to as the Pay Transparency Executive Order.  The Rule is expected to be published in the Federal Register on September 11, 2015 and will take effect 120 days from publication –  January 11, 2016. The final rule applies to employers that enter into new, or modify existing, federal contract(s) after January 11, 2016 in excess of $10,000. The final rule amends Section 202 of Executive Order 11246 which already prohibits employment discrimination by federal contractors, and according to OFCCP “helps level the playing field for women and people of color and provides employers access to a diverse pool of qualified talent” by contributing “to building an economy that works for everyone” and helping to “make the contractor workforce more efficient.” Under the final rule employers are required to update their nondiscrimination policies to include a proscribed provision specifically addressing pay transparency.  This language must also be made available to applicants. We are in the process of parsing through the 118 page final rule and will provide additional insights and details soon.