As we reported earlier today, OFCCP has announced proposed regulations to satisfy President Obama’s mandate that contractors submit detailed pay data.    The NPRM will be officially published in the Federal Register this Friday with a 90 day public comment period after that.

As proposed, the data collection tool, called the Equal Pay Report (EPR) in the NPRM, is an annual supplement to the EEO-1 Report.  The NPRM proposes the following:

  • Annual report to be filed in the first quarter of every year
  • Required for Employers with 100 or more employees
  • To be filed separately for each establishment
  • Report W-2 earnings for all employees aggregated by EEO-1 category – so employers must report on total comp, as opposed to base comp like most employers include in AAP submissions to OFCCP
  • Report aggregated hours for all non-exempt employees by EEO-1 category – and for all exempt employees if tracked by the employer

We continue to digest the 150 pages of the NPRM and will continue to post detailed analyses of the proposed Equal Pay Report and accompanying regulations.  Stay tuned.

The 32nd Annual ILG National Conference opened this morning with an address from Secretary of Labor Thomas Perez.  This was the first time a sitting Secretary addressed the group, and Secretary Perez hoped it would not be the last.  In his remarks, the Secretary acknowledged the “good work” employers have done in past months to increase jobs, noting 22% of the workforce is employed by federal contractors, but commented his belief that the work is not yet done.  To that end, the Secretary relayed to the group the sentiment that while there are many different types of employers “we are in the same orchestra and that is the orchestra of opportunity and you’re sitting in the front row.”

Continuing with his commitment to listen to employers, Secretary of Perez encouraged attendees to “never hesitate to let him know if they think we are screwing up.”  Stating “I don’t know what I don’t know”, the Secretary repeated his desire to hear from contractors about their concerns, trepidations, and positive feedback.

There was speculation that Secretary Perez would unveil during his remarks this morning the much anticipated pay data collection tool or speak to other forthcoming Department of Labor regulations.  This was not the case; however, we have learned that OMB has released the details of the pay data collection tool to be published in the federal register on Friday – which coincides with OFCCP Director Pat Shiu’s address to the conference.  As we learn more about the details of the tool we will make sure to provide you with an update.

We have learned OMB has today released the proposed pay data collection tool to be published in the Federal Register on Friday.  Once published, the public will have 90 days to submit comments.  Details are still emerging on this breaking news.  We will update you as soon as we learn more so make sure to stay tuned.

Hello from the 2014 ILG National Conference in beautiful Washington, D.C.  The theme of this year’s conference is “Celebrate 50 Years of Civil Rights” and the conference opens tomorrow morning with an address from Secretary of Labor Thomas Perez.  Key officials from OFCCP and EEOC as well as leading practitioners are scheduled to present throughout the remainder of the week.  With all of the new regulations and executive orders impacting federal contractors, this year’s conference is going to be chockfull of invaluable insights and information about contractor compliance obligations and enforcement trends.  We’ll bring you the highlights and key take-a-aways so make sure to keep an eye out for our updates.

In the latest in a series of recent Executive Orders signed by the President,  creating significant additional burdens for federal contractors, the President signed today the “Fair Pay and Safe Workplaces Executive Order”.  In addition to releasing the EO, the White House also published a fact sheet on the new obligations contained in the EO.

The EO is misleadingly named in that it primarily covers topics other than fair pay and safe workplaces – these topics are covered among the wide-ranging set of new obligations.  The new requirements will include:

  1.  Federal Agencies considering the three-year record of labor and employment law violations when making contract award decisions,
  2. Contractor reporting of violations of employment laws,
  3. Contractor provision of information to employees to allow them to “verify the accuracy of their paycheck”, and
  4. Prohibition on mandatory arbitration agreements to resolve claims of civil rights violations.

Agencies will be required to take into account violations of 14 Federal statues (and equivalent state laws) when considering contract awards.  Contractors and subcontractors will be required to report violations of these same laws.  Among others, these laws include:

  • Fair Labor Standards Act,
  • Occupational Safety and Health,
  • National Labor Relations Act,
  • Family and Medical Leave Act,
  • Davis Bacon,
  • Service Contract Act, and
  • Title VII of the Civil Rights  Act,
  • Americans with Disability Act,
  • Age Discrimination in Employment Act,
  • Executive Order 11246,
  • Vietnam Veterans Readjustment Assistance Act,
  • Section 503 of the Rehabilitation Act, and
  • Executive Order 13658 (federal contractor minimum wage)

We anticipated much of what was in this Executive Order but there was also one big surprise – a provision prohibiting contractors and subcontractors from requiring new employees enter into pre-dispute mandatory arbitration agreements.  Many employers require employees to sign arbitration agreements at the outset of employment.  This provision of the EO is a “game changer” that government contractors and subcontractors must review and determine how to respond.  It is possible employers will bring litigation challenging this provision of the EO.

In an effort to assist contractors with the burden of the above, and existing reporting obligations, the Executive Order tasks the General Services Administration to develop a single website for contractors to meet their reporting requirements.

This is a breaking story.  We are doing a “deep dive” into the many details.  Stay tuned for additional posts in the upcoming days as we analyze the details and implication of these new obligations.

As OFCCP tries to find new ways to attack the “pay gap,” the Agency is focused increasingly on novel and creative methods to uncover alleged pay discrimination.  These “outside the box” investigations look beyond simply pay decisions (starting salary and pay adjustments) and instead examine employee selection processes – such as hiring decisions – and the impact of these processes on pay.  In that vein, OFCCP recently has greatly increased its focus on “steering” – a theory of discrimination alleging that an employer assigns newly hired employees into different (typically) entry-level positions with different pay rates based on race and/or gender.  A classic example is when new male employees disproportionately are hired for the heavier lifting production entry-level jobs in the warehouse while female entry-levels are hired into the warehouse “clean up” positions (which pay less).

These increasingly common steering investigations often are extremely time-consuming and burdensome on employers.  Moreover, OFCCP is starting to get big results with this innovative approach.   Most notably, in late 2013, G&K Services Co. agreed to settle claims of pay discrimination with OFCCP for more than $265,000.  OFCCP alleged the Company steered female applicants into lower paying “light duty” jobs upon hire.

Contractors should use their affirmative action plan data to identify whether the hallmarks of steering exist in their workforce.  Specifically, contractors should examine jobs that are on the same or similar level (such as entry-level production jobs) with differing pay rates for concentrations by race and/or gender.  If identified, closely examine how those concentrations came about – whether self-selection by applicants (good) or decisions made by recruiters or managers (potentially bad).  If the latter, determine whether there are job-related reasons for the decision-makers disproportionately selecting applicants of a specific race/gender for particular positions.

This is a rapidly developing area of OFCCP enforcement and Jackson Lewis is defending many steering investigations around the country.  We will present a session at the ILG national conference next week in DC on how best to avoid and (when necessary) effectively respond to OFCCP steering investigations.  If you plan to attend the conference, please join my colleagues Matt Camardella and Michelle Duncan as they present on this increasingly important issue.

Earlier this week, OFCCP delivered to the Office of Management and Budget (OMB) proposed regulations implementing the President’s recent Executive Order 13665 prohibiting employers from retaliating against employees for discussing their pay.  A White House Fact Sheet provides more information on how the proposed regulations fit into the President’s pay initiatives.

After OMB reviews (and approves) of the proposed regulations, the public will have the opportunity to comment on OFCCP’s proposed rules.  OMB’s review generally takes 90 days, but this time period may be shorted or extended as needed.  In fact, according to the OMB timetable, the Notice of Proposed Rule Making (containing the proposed rules) is due in September.

We will make sure post an update when the regulations have been released for public consumption.

It’s been a busy spring and early summer for the President and federal contractors with several new Executive Orders and a Presidential Memorandum on the issues of employee pay as well as sexual orientation and gender identity discrimination.  For those of you trying to keep up with it all, below is an up-to-date summary of the current stance of each action.

Please check back as we’ll periodically update the summary with further developments.

Executive Order 13658:  Establishing a Minimum Wage for Contractors

 

Executive Order 13665:  Non-Retaliation for Disclosure of Compensation Information

  •  Signed:  April 8, 2014
  • Effective Date:  applies to contracts entered into on or after effective date of final Rules
  • NPRM:  due 160 days after Order (mid-September 2014)

 

Presidential Memorandum — Advancing Pay Equality through Compensation Data Collection

 

Executive Order 13672:  Further Amendments to Executive Order 11478, Equal Employment Opportunity in the Federal Government, and Executive Order 11246, Equal Employment Opportunity (LBGT Discrimination)

  •  Effective Date:  applies to contracts entered into on or after effective date of final Rules
  • NPRM due 90 days after Order (mid-October 2014)

Jackson Lewis has learned the following about the latest round of OFCCP Courtesy Scheduling Announcement Letters (CSALs).

On July 16, 2014 OFCCP sent out a wave of CSALs giving employers advance notice about impending OFCCP compliance reviews.

The latest CSAL wave included:

  •  568 employers
  • 1,507 establishments
  • 23 industries
  • 30 Corporate Management Compliance Evaluations (CMCEs) were included

Employers slated for audits face increasing challenges due to OFCCP’s evolving enforcement approach in the areas of pay discrimination, new veterans and disability regulations, and other areas.

Jackson Lewis will soon host a webinar to assist employers to prepare for the coming wave of audits.

Stay tuned for webinar details . . .

The President today signed a much anticipated Executive Order prohibiting workplace discrimination against employees and applicants for employment based on sexual orientation or gender identity.  Here is a link to the executive order.

Of particular note, the executive order does not contain a religious exemption.  That topic has been one of intense negotiation between the White House and religious groups and their advocates during the past few months.  Ultimately, the President elected not to include a religious exemption.

The executive order directs the U.S. Department of Labor to issue proposed regulations implementing the order within 90 days. The Office of Federal Contract Compliance Programs likely will be charged with enforcing these new obligations against government contractors.

We will provide additional information and insights about these new obligations and proposed regulations soon.

Stay tuned . . .