In an update to our post more than a year ago about the National Association of Manufactures’ legal challenge to the posting requirements under Executive Order 13496, a federal district court in Washington, D.C. has rejected NAM’s constitutional challenge to President Barack Obama’s 2010 Executive Order requiring certain federal contractors to post a “Notification of Employee Rights under Federal Labor Laws.”

For a more detailed discussion of this development, please check out the recently published article on our website.

This past March, Labor Secretary Thomas Perez issued a News Release announcing the overall unemployment rate for all veterans has dropped for the fourth consecutive year – this is great news.

In an effort to assist in the employment of veterans, covered federal contractors are required to set a protected veteran hiring benchmark as part of their affirmative action obligations. As we reported earlier this week, OFCCP recently announced a corresponding drop in the national veteran hiring benchmark to 7% from 7.2%. The benchmark is an estimate of veterans in the civilian workforce and serves as the annual target rate for covered veteran hires to which federal contractors should strive.

Veteran Preference Policies

The groundswell of support for veteran employment also raises the topic of veteran employment preferences. The federal government and most states have long mandated government employment preferences for veterans. When challenged, these programs have been upheld as permissible pursuant to Section 712 of Title VII of the Civil Rights Act of 1964 and not found to have violated non-discrimination laws. Similarly, as OFCCP noted in its comments regarding the new VEVRAA regulations, non-veterans have no “reverse-discrimination” claim under VEVRAA or Title VII for employment decisions based on veteran status.

Currently seventeen states have authorized private employers to utilize voluntary veteran preference policies – with three coming in the first several months of 2015 alone. The list of states authorizing voluntary private employer veteran preference policies include:

Arizona, Arkansas, Florida, Idaho, Iowa, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Montana, Nebraska, North Dakota, Oklahoma, Oregon, South Carolina, Virginia, Washington and Utah.

 While increase veteran employment is something we can all support, there is another side to this coin: the impact of veteran preferences on women. In its 1990 Policy Guidance on Veterans’ Preference Under Title VII, EEOC stakes out its position that veteran preferences have a significant adverse impact on women due to the historically low numbers of women in the military services. Therefore, EEOC states, preferences are typically justifiable only if authorized by federal, state or local laws as provided in Section 712 of Title VII. EEOC has not recently indicated a position on whether voluntary veteran preferences authorized by state law are covered by Section 712.

Consider Whether a Preference is Defensible

Consequently, private employers considering a veteran preference policy should also consider:

  •  Whether the state in which the employer operates has a veteran preference law for private employers. Such state laws likely protect voluntary veteran preference policies from Title VII attack. However, it remains to be seen what effect EEOC’s guidance may have and whether female plaintiffs may take issue under Title VII.
  • Without a state law , a veteran preference may not be permitted under Title VII, without a showing that it does not have an adverse impact on women.
  • Finally, some state veteran preference laws impose specific requirements on employer policies, such as:
    • The policy must be in writing;
    • Preferences must be applied uniformly to hires, promotions and reductions-in-force decisions; and
    • Preferences may only be extended to veterans who are qualified or “equally qualified” as compared to competing candidates.

EEOC warns in its Guidance that a voluntary veteran preference policy which is not implemented according to the state law authorizing it, or which is not otherwise consistently applied, may create an argument that the preference is a pretext for sex discrimination.

In summary, while veteran preference policies may be laudable and attractive to many private employers, such policies should be well-informed and implemented with care.

Utilizing 2014 Bureau of Labor Statistics (BLS) year-end data, OFCCP has revised the VEVRAA hiring benchmark to 7 percent – down from the current 7.2% mark. Pursuant to the revised veteran regulations, covered contractors and subcontracts must either adopt the national benchmark, or set their own using the proscribed five-factor method, for each establishment. While OFCCP has said failing to meet the hiring benchmark will not be deemed a violation, the mark should be used by contractors in the required assessment of the effectiveness of the contractor’s good faith outreach efforts.

The Annual National Benchmark, as well as data to be used by those calculating their own benchmark using the five-factor analysis, can be found at http://www.dol-esa.gov/errd/VEVRAA.jsp.

April 14, 2015 has been identified as National Equal Pay Day – the day which symbolizes how far into the year women must work to earn what men earned in the previous year.

President Obama has made fighting pay discrimination a top priority of his Civil Rights Agenda. He has recently taken several executive actions to further this agenda including:

  • Executive Order 13665 – Pay Transparency: Prohibiting discrimination/retaliation against applicants and employees, including employees who discuss pay.
  • Equal Pay Report: A report to be filed annually for employers reflecting company-wide compensation. OFCCP is in the process of evaluating the more than 8,000 comments received during the public comment period.

In addition, OFCCP has taken steps to ramp up its enforcement of pay discrimination:

  • Directive 307: effective February 2013 and outlines the procedures for reviewing contractor compensation systems and practices during a compliance evaluation
  • New Scheduling Letter and Itemized Listing: requires detailed employee-level compensation data to be provided at the outset of every OFCCP compliance review. The data required to be submitted includes:
    • Base
    • Bonus
    • Commissions
    • Overtime Earned
    • Merit Increases
    • Incentive Compensation
  • Proposed Sex Discrimination Regulations: revises obligations for contractors around pay for women, among other things.

What does all of this mean? The President and OFCCP are serious about addressing pay discrimination and are building programs and processes in furtherance of this goal.

The question is – what are you doing proactively to ensure your company is paying people fairly?

Stay tuned for an upcoming blog post where we will delve into the world of proactive pay analyses and what you can do to gain insight into your compensation systems.

Since introducing its new scheduling letter in late 2014, OFCCP has made many important changes to enforcement in audits.  From ramped up enforcement of the Agency’s VEVRAA and Section 503 regulations to new and very different ways to investigate pay systems for discrimination, the Agency has fundamentally changed how it conducts compliance reviews.  And it’s just beginning.  There are new proposed and final regulations regarding pay on the horizon.  Its critical employers understand the quickly changing “rules of the game.”

So, come join me at The OFCCP Institute’s Annual Conference April 29-30 in Washington, D.C. to learn about the Agency’s enforcement trends and network with other federal contractors who are working, just like you, to navigate the changed compliance landscape.  The Institute has the honor of welcoming Consuela A. Pinto, Counsel for Litigation and Regional Coordination, from the U.S. Department of Labor’s National Office of the Solicitor as a guest speaker during the conference.

For the conference agenda and to register, click here.  Hope you to see you there!

As a follow up to last week’s training on implementation of the new sexual orientation and gender identity non discrimination regulations, OFCCP will be holding an upcoming webinar to discuss how the Agency will be processing complaints under Executive Order 13672.

The public webinar will be held on April 8, 2015 ,and again April 9, 2015 , from 2:00 – 3:30 p.m. Eastern.

In light of this week’s Supreme Court decision in Young v. United Parcel Service addressing the issue of accommodations and pregnancy discrimination, OFCCP has extended the public comment period for the Agency’s Sex Discrimination Regulation Notice of Proposed Rulemaking.  The public comment period now closes April 14, 2015.

By extending the comment period by two weeks, the Agency seeks to give the public the opportunity to take into consideration, and comment on, the impact of the Court’s decision in Young on the Agency’s proposed rule on Discrimination on the Basis of Sex.

 

This week OFCCP hosted Webinars on federal contractor obligations with respect to sexual orientation and gender identity under Executive Order 13672.

During the training OFCCP reiterated the following requirements:

  • Contractors are to use the updated EO Clause including sexual orientation and gender identity if the entire EO Clause is incorporated into covered purchase orders and subcontracts.
  • Contractors must include sexual orientation and gender identity in your EEO tagline for job ads only if the tag line lists out all of the protected statuses.
  • As an alternative, contractors may continue to use abbreviated taglines which do not need to include reference to sexual orientation or gender identity; and
  • Contractors must post the updated “EEO is the Law” poster when available. Until it is available, contractors are to use a supplement to the poster when provided by EEOC and OFCCP. The supplement is expected to be available at the EEOC and OFCCP Websites sometime shortly after April 8. As soon as we have access to this supplement we will let you know where to find it.

During the webinar OFCCP clarified while it would be “best practice” to include sexual orientation and gender identity in other anti-discrimination documents such as handbooks, revision of these documents is not required.

OFCCP reiterated that contractors are not required to collect any data regarding sexual orientation or gender identity; engage in any particular outreach or training; or set placement goals based on sexual orientation or gender identity. However, OFCCP informed the audience that if contractors elect to invite applicants and/or employees to voluntarily disclose sexual orientation and gender identity, the collected data could be requested during an OFCCP audit or investigation of a LGBT complaint.

More to Come

OFCCP announced it is working on a set of LGBT FAQs which will soon be available on OFCCP’s Website. While FAQs are non-regulatory, they often provide helpful guidance on the Agency’s expectations. We will be sure to provide an update when these become available.

OFCCP published its long-awaited Sex Discrimination Rules amidst a lot of other activity vying for our attention.  Maybe you’ve not had the chance to review them (yet). But you’ve still got time.  The public comment period is open until Tuesday March 31, 2015 – let your voice be heard.

Comments can be filed via fax or online: Fax: (202) 693–1304 (for comments of six pages or less); or the Federal eRulemaking Portal – www.regulations.gov. Refer to RIN number 1250–AA05.

In summary, the proposed rules would update the 1970’s-era Sex Discrimination Guidelines and impose mandatory obligations on employers.

Below are a few highlights:

  • Purpose: Unlike the former Guidelines, the Rules would create a binding set of EO 11246 regulations.

 

  • Discriminatory Pay: The proposed rules broadly prohibit any practice which denies “equal pay” or “equal access” to opportunities for higher pay on the basis of sex. Title VII prohibits discrimination in pay among similarly-situated employees on the basis of sex or race. The proposed regulations seemingly adopt OFCCP’s current approach to pay discrimination as set out in the Agency’s Directive 307.

 

  • Discrimination Based on Pregnancy, Childbirth and Related Medical Conditions: This proposed Rule states employers “must treat people of childbearing capacity and those affected by pregnancy, childbirth, or related medical conditions the same for all employment-related purposes…as other persons not so affected, but similar in their ability or inability to work.” Perhaps most notable, for example, employers would not be permitted to deny a pregnant employee an accommodation when that accommodation is provided to other employees whose abilities or inabilities to perform their job duties are similarly affected. This prohibition is currently being litigated before the U.S. Supreme Court.

 

  • Harassment and Hostile Work Environment: This Rule clarifies prohibited harassment includes that based on gender identity, pregnancy, childbirth and related medical conditions, and non-sexual harassment which is “because of sex,” such as harassment based on transgendered status. The Rule also suggests but does not mandate anti-harassment best practices.

The NPRM also includes a “Section-by-Section Analysis” portion of OFCCP’s Federal Register. There, OFCCP provides insights on what it believes the Rules mean and how OFCCP may interpret them.

OFCCP announced today a date change for its upcoming sexual orientation and gender identity compliance training.

The webinar previously scheduled for Wednesday, March 18, 2015 will now be held Tuesday, March 24, 2015 at 2:00 Eastern.  The same Webinar will be presented again on Wednesday, March 25, 2015.

If you have already registered for the March 18th webinar there is no need to re-register or take any further actions.