As it has done periodically since the release of the new regulations, OFCCP has posted six new “frequently-asked questions” (FAQ) regarding the revised VEVRAA and Section 503 Regulations.  Each is highlighted with a “new” tag.  The FAQs are responsive to questions we’ve been hearing – and some asked during the SWARM conference during the Q&A session with Regional Director Melissa Speer and Regional Deputy Director Aida Collins.

Among others, the topics addressed include:

  • whether the calculation of the number of “jobs filled” should include “step or ladder movements”
  • whether an employer can include an individual who self-identifies at the applicant stage but does not self-identify at the post-offer stage when assessing its attainment towards the veterans hiring benchmark
  • how, when calculating the disability utilization goal, employers should treat employees who do not responded to the self-id survey

Over the next few days we’ll share our thoughts and insights on this new guidance. Our first comment is that while FAQs may be helpful, they are not the regulations and do not have the force of law or regulation. Contractors should take the guidance with a “grain of salt” and refer to the Regulations for ultimate authority.

 

As an update to our post last week, the Department of Labor’s Notice of Proposed Rulemaking establishing a minimum wage for federal contractors has now been formally published in the Federal Register.  With this publication, the 30-day public comment period starts to run, making the deadline to submit comments July 17, 2014.

Comments can be submitted with Regulatory Information Number (RIN) 1235–AA10 in either of two ways:  (1) Electronic Comments: http://www.regulations.gov ; or (2) Mail:  Address written submissions to Mary Ziegler, Director of the Division of Regulations, Legislation, and Interpretation, Wage and Hour Division, U.S. Department of Labor, Room S–3510, 200 Constitution Avenue NW., Washington, DC 20210.  Additional instructions for comment submission may be found at page 43568 of the proposed rules.

We encourage you to review the NPRM to see if it applies to your organization and let your voice be heard by submitting comments by the July 17, 2014 deadline.

President Obama will soon issue yet another federal contractor Executive Order, this time prohibiting sexual orientation and gender identity discrimination by federal contractors.  We do not have details of the proposed executive order yet, but the announcement comes on the heels of the President’s recent delcaration of June 2014 as LGBT Pride Month.

As with other, recent Executive Orders, this executive action appears to be the President’s response to Congressional inaction; in this instance, the failure to pass the Employment Non-Discrimination Act prohibiting sexual orientation or gender identity discrimination and harassment.  The Executive Order will likely require proposed regulations from the Department of Labor.

We are on the look out for the proposed Executive Order and will post an update as soon as we have more details.  Please check back.

OFCCP has announced Dr. Marika Litras as the new Director of the Division of Program Operations.  Dr. Litras has dedicated her career to public service.  She has previously held roles within OFCCP as a Senior Statistician, Director of Regional Operations in the Pacific, Director of the Functional Affirmative Action Program and, most recently, as Deputy Director of Program Operations.   Those in the contractor community may have heard Dr. Litras recently speak about pay equity investigations at the 2014 SWARM Regional ILG Conference.

In her new role Dr. Litras will oversee a number of important operational programs including “strategic enforcement initiatives, expert statistical analysis, program evaluation, quality assurance, the Functional Affirmative Action Program and the Indian and Native American Employment Rights Program.”

As part of its training for employers on the new Veterans and Disability Regulations, OFCCP partnered today with the Office of Disability Employment Policy (ODEP) to provide employers with effective practices for hiring and retaining individuals with disabilities.

The presentation was based on ODEPs seven key Business Strategies that Work and highlighted the following five strategies:

  • Build It: Inclusive Corporate Culture
  • Hire (and Keep) the Best: Personnel Processes
  • Ensure Retention and Productivity: Reasonable Accommodations
  • Create the Talent Pipeline: Outreach and Recruitment
  • Be Tech Savvy: Accessible Information and Communication technology

The slides from the presentation should be available soon and we will be sure provide a link once we receive them.

The Department of Labor released today its Notice of Proposed Rule Making to raise the minimum wage for federal workers to $10.10 an hour.  The proposed rule implements Executive Order 13658, which was announced by the President on February 12, 2014.

Once the proposed rule is officially published in the Federal Register the public will have the opportunity to submit written comments.  We suggest you let your voice be heard.

We are in the process of digesting the proposed rule and will share our insights soon.

  • Public Service Announcement

During her keynote address at the AAAA conference last week, OFCCP Director Patricia Shiu said the Agency is working on a public service announcement to help explain why federal contractors will soon begin requesting disability status from applicants and employees.  We’ve heard from many in the contractor community that there are concerns, as a result of the multiple times employers are now required to request individuals to self-identify as disabled, applicants and employees will be put-off by the employer’s new found “obsession” with their disability status.  During her comments Director Shiu acknowledged that she’s heard these concerns as well and wanted to do something to assist contractors address the issue.  Shiu reported that the idea for OFCCP to issue a public announcement on the issue came from the contactor community.

Regardless of what OFCCP releases in its announcement, its important to think carefully about the message you put out in connection with the new disability (and additional veteran) surveys.

  • Training

Following up on its promise to offer continuing guidance on the new Veterans and Disability regulations, OFCCP is offering two upcoming training Webinars:

June 12:  Office of Disability Employment Policy (ODEP) Best Practices.  We understand this Webinar is full but look for our recap following the program and materials on OFCCP’s Website in the near future.

June 17:  New and Small Federal Contractors/Subcontractors –Changes to VEVRAA and Section 503.  Register here.

The DOL and OFCCP regularly offer a number of programs both nationally and locally, a schedule of which can be found here.

The Department of Labor and OFCCP recently released its 2014 Spring Regulatory Agenda and there really are no surprises.  The Agenda reflects some of the Agency’s same agenda items as in years past along with items prioritized by President Obama’s recent executive actions.

The old:

What’s new?  As previously discussed here and here, the President’s drive towards pay equity will be keeping OFCCP very busy this summer:

  •  Compensation Data Collection:  topping the list are proposed regulations requiring federal contractors to submit summary pay data to OFCCP which would allow it to target for audit those contractors whose pay data suggest pay equity issues.  There will be no vacation for OFCCP in June or July as the proposed regulations are due in early-August 2014;

 

  • Non-Retaliation for Disclosure of Compensation Information:  the President’s Executive Order 13665 amended Executive Order 11246 to prohibit retaliation against applicants and employees who discuss or disclose compensation information.  The amendment pursues the belief that, unless employees are able to freely discuss compensation, they will be unable to discover and address unfair pay disparities.  Regulations implementing the amendment are due by the end of September 2014.

What’s the priority here for federal contractors?  Compensation data collection is likely to fundamentally change the compliance landscape for federal contractors.  The current administration has been tasked to locate and address systemic pay disparities, as well as policies and procedures which cause those disparities (e.g. the “steering” issue).  Accordingly, before being required to turn over their data, contractors will need to understand what OFFCP may see (before the Agency gets it) by conducting privileged, proactive pay analyses and appropriately addressing issues before any data submission.

What do you have to say about compensation data collection?  We urge you to voice your opinions and insights during the comment period following the proposed regulations.  Check back periodically as this will be the “hot” summer topic (at least for federal contractors).

At the end of January 2014, OFCCP sent out a wave of advance notification letters informing select employers that one or more of their establishments had been selected for review.   Ever wonder how federal contractors make it on to this list?  You’re not alone.  At The OFCCP Institute’s Annual Conference last week, Consuela Pinto, an attorney in the Civil Rights and Labor-Management Division of the DOL’s Office of the Solicitor, shared her insights into the process.  Contractors are selected according to the Federal Contractor Selection System (FCSS), which is said to be a neutral system based on a number of factors and information sources.

According to Ms. Pinto, the factors OFCCP takes into consideration in the FCSS include:

  • Federal acquisition and procurement databases identifying federal contractors, subcontractors and related entities;
  • Company EEO-1 Reports identifying the race and gender composition of EEO job groups, as well as whether the company is a federal contractor;
  • Dun & Bradstreet data regarding affiliated entities which might also be covered federal contractors;
  • Industry type and data regarding industry baselines;
  • Dollar value of a federal contract or subcontract;
  • Expiration Date of contract; if the contract is set to expire in the near future it doesn’t make sense to slate employer for an audit;
  • Workforce size; yes, larger contractors and workforces may be more likely to be audited; and
  • Time; the longer it’s been, the more likely an audit may be.

These insights are useful in helping contractors prepare for upcoming OFCCP audits.

One of the first things an employer should do to preapre is to determine whether it is a covered contractor – which is not an easy task and requires cataloging federal contracts and subcontracts.  The following are useful tips to assess contractor status and ensure that the Company’s outward-facing information and data is accurate so an audit isn’t triggered by incorrect information:

  • Search for federal contracts on websites like usaspending.gov
  • Make sure your EEO-1 Reports are consistent with your affirmative action plan structure (e.g. separate reports filed for individual locations) so that OFCCP isn’t seeing locations that look to have more than 50 employees when they really have fewer employees
  • Confirm you NAICS code(s) are accurate
  • Update your Dun & Bradstreet information.

Eight months into its fiscal year 2014 (10.1.13 – 9.30.14), OFCCP has scheduled 2,193 establishments for audit covering 17 industries.  With only four months remaining until the end of the fiscal year, OFCCP has some catching up to do to meet its projection of 4,000+ audits for the year.  To this end, another FCSS generated audit list is likely later this year.

Ultimately, audit selection is not predictable so it’s best to determine your federal contractor status now and prepare accordingly.

Last week during The OFCCP Institute’s Annual Summit, Consuela Pinto from the Department of Labor’s Solicitor’s Office, in addition to speaking on other topics, touched on the impact of OFCCP’s new veteran and disability regulations thus far.

Ms. Pinto confirmed OFCCP has not processed any violations based on audits involving application of the new regulations. However, she noted that companies who receive notices of violations based on non-compliance with the old regulations will receive remedies consistent with the new regulations. Thus, as she clarified, the Agency is not citing the company for violating the new regulations but instead remedying the violation of the outdated regulations with actions that will be in compliance with the new regulations.

As we have said previously, compliance with the good faith outreach requirements and new obligation to assess the effectiveness of your company’s good faith efforts imparted by the new regulations is critical and something you should look to address immediately.