Continuing to pursue his pay equity agenda, President Obama took the steering wheel by issuing two Executive Orders and a game-changing Presidential Memo in February and April.  Each of these actions requires the Department of Labor (DOL) to issue proposed regulations to implement the actions and flesh-out the many details not addressed in the Executive Orders and Memo.  The devil, as they say, is in the details and each of these proposed regulations is subject to public notice and comment prior to their finalization.  This means your comments.

  • Presidential Memo:  directs DOL to propose regulations requiring contractors to submit to OFCCP summary pay, race and gender data on their employees
    • Proposed regulations due early-August 2014
    • On par with the new veteran and disability regulations, these proposed regulations will fundamentally change compliance for federal contractors.  Presently, we know very few of the details of this proposal; thus, the proposed regulations will be our (your) first opportunity to be heard regarding regulations which may impact federal contractors for years to come.

 

  • Executive Order 13665:  no retaliation against applicants or employees for inquiring about, discussing or disclosing pay
    • Proposed regulations due mid-September 2014

 

  • Executive Order 13658:  minimum wage for federal contractor employees to $10.10/hour
    • Proposed regulations due October 1, 2014
    • Open Questions: how will OFCCP define “contract” and “federal contractor,” and are all contractor employees covered or only those working on the federal contract.

Make sure you keep dates on your radar and consider submitting comments to the proposed regulations.   Continue to check back here during these timeframes as we will continue to provide important updates and insights on these proposals.

 

As a follow up to Secretary Perez’s letter to Congress proposing a five year moratorium on OFCCP compliance reviews of TRICARE employers, OFCCP issued a directive detailing the Agency’s position.

In addition to confirming OFCCP’s commitment to cease auditing TRICARE employers for the next five years, the directive sets out OFCCP’s plan to

 “engage in outreach and technical assistance to provide greater clarity for the TRICARE subcontractor community about their obligations under the laws administered by OFCCP.”

The Directive also provides instructions for TRICARE employers who receive scheduling letters to request administrative closure of the compliance reviews based on the moratorium.  As part of the process, a TRICARE employer seeking closure of a compliance review will need to submit a copy of its TRICARE agreement.

It is clear that while OFCCP has agreed to hold off on compliance reviews of TRICARE participants over the next five years, the Agency believes it has jurisdiction over these entities and will look to resume audits once the moratorium concludes.  As a result, its important for those in the healthcare industry to monitor the source of their revenue, and for those who only receive TRICARE funds, prepare to come into compliance with OFCCP’s regulations, including the new veterans and disability obligations, if they have not already done so.

As we’ve been sharing, OFCCP is working to develop a pay data collection tool for federal contractors in response to President Obama’s recent Presidential Memorandum on Pay Discrimination.  We have learned OFCCP sent its proposed regulation for this tool to OMB yesterday for review; it is not yet, however, available to the public.  Once we obtain more details we will provide an update so make sure to stay tuned.

On the last morning of the 2014 SWARM Regional Conference, attendees were treated to a special session with OFCCP officials and practitioners discussing OFCCP’s approach to pay enforcement.  On the panel from OFCCP were SWARM Regional Director Melissa Speer and Deputy Director of Operations, Marika Litras who graciously and skillfully filled in for an ill Pam Coukos.

In the context of OFCCP’s release of Directive 307 last year, the women shared insights into the Agency’s current approach to investigating compensation during OFCCP compliance reviews.

Takeaways for contractors from the discussion include:

  •  OFCCP expects contractors to do a very detailed, comprehensive comp self-audit on an annual basis, including regression analyses where practical
  • The annual self-audits need to include accessing and reviewing data and documents reflecting relevant pay factors.  For example, do you have relatively easy access to records the document starting pay or prior related experience?
  • OFCCP looks first at a macro level of your compensation practices to inform how they will construct the groups to analyze your pay – looking first to “function” to guide the structure of the groups
  • At least in the SWARM region, OFCCP takes a “team approach” to compensation reviews and triages cases to focus on those cases with the biggest issues
  • Consistent with Directive 307, the scope of an OFCCP pay investigation will touch on a breadth of contractor employment practices (e.g. hiring, promotions)

One of the liveliest portions of the conversation surrounded the issue of OFCCP’s current “trigger” test for compensation analyses.  Melissa reiterated to the group that “there is no trigger.”  However, Marika listed a number of factors OFCCP takes into consideration when triaging cases to identify the “strongest cases” to pursue and acknowledged OFCCP categorizes employers into groups based on likelihood of compensation issues the Agency should pursue. Marika made it a point to convey that OFCCP’s “test” is constantly evolving and thus suggested “its not valuable to share because its constantly changing.”

A panel on pay could not be complete without an attempt to gain insight into OFCCP’s work to develop a pay data collection tool in response to President Obama’s preseidential memoradum.  Not unexpectedly, Marika could provide little detail into OFCCP’s efforts but confirmed the Agency is on schedule to release its proposal by the end of the Summer.

In parting thoughts, Melissa shared what, in her mind, makes a “good” pay system:

  1. Self-monitoring
  2. Proper record keeping

As the conference comes to a close it is more apparent than ever the importance of conducting annual self-critical analyses on your compensation systems and that these analyses are conducted under attorney-client privilege so as to avoid being the “low hanging fruit” in OFCCP’s pay enforcement harvest.

As we mentioned earlier, at the SWARM Regional Conference this afternoon, Regional Director Melissa Speer and Deputy Director Aida Collins, answered questions from conference attendees about implementation of the new veteran and disability regulations.

During the Q&A session, Melissa and Aida graciously took questions from the crowd about real-world implementation scenarios.  For those questions they could not answer, Melissa and Aida promised to take the issues to OFCCP’s National Office to seek clarification and encouraged the crowd to “be their watchdogs” to ensure OFCCP is responding to the questions.

The following are highlights from the Q&A session:

  •  You can’t update a candidate’s pre-offer self-identification as to disability status with their post-offer self-identification status
  • You can’t allow employees to update their disability status without completing the required form
  • Employers must keep each completed hardcopy self-identification form (or a scanned copy); this leaves open the question of what employers must do if utilizing an on-line application system (and electronic form)
  • Keeping a notice posted on a bulletin board notifying employees of their right to update their disability status at any time satisfies the duty to “remind” employees of their right in between the required 5-year survey
  • As long as all employees have access, sending an e-mail with a link to the form satisfies the survey obligation
  • In-line “progressions” do not need to be included as a “job filled” under the data collection obligations of the new regulations

In addition to the above, Melissa Speer reiterated multiple times during the session that “there is not disparate impact under these regulations, only disparate treatment” and the Agency will not be conducting adverse impact analyses.  The open question is exactly what this means and how it will play out in compliance reviews.

Echoing the sentiments we’ve repeated throughout this initial implementation phase of the regulations, Melissa acknowledged that answers to a number of contractor questions will come as OFCCP engages in enforcement and compliance reviews now that the regulations are effective.  As always, stay tuned for further updates . . .

We’re midway through the second day of the SWARM ILG Regional Conference and it’s been a great day so far – with a number of top-notch speakers and a ton of OFCCP and affirmative action information being exchanged.

During lunch conference attendees had the pleasure of hearing from Robert Beal and Francesca Cheroutes from the US Department of Labor, Office of the Solicitor.  In addition to discussing the Solicitor’s Office focus (along with OFCCPs) on compensation and pay equity, Robert and Francesca updated the group on the SOL’s recent enforcement cases and shared best practices for a “successful” experience with the SWARM Region.

Continuing on themes repeated earlier in the conference, Robert highlighted the department’s focus on “steering” in pay cases.  Notably Robert shared that people should be paid

 “based on their merit and performance” not based on “who they know or their race or gender.”

Following Francesca’s discussion of recent litigations involving federal contractors in which she discussed the “lessons learned” from some of the top cases decided last year, Robert listed a number of “rules” to following when involved in a compliance review in the SWARM Region.  The list included the following notable takeaways:

  • Cooperate with the government and their requests so you don’t find yourself in a “denial of access” situation
  • Keep Records per your obligations – “just because you haven’t heard from us in a year doesn’t mean the review is over – it’s only over when you hear from OFCCP that its over”
  • Do proactive self-analyses
  • “Conciliate, Conciliate, Conciliate” and take advantage of the opportunity to tell OFCCP “why their conclusions are wrong”

This afternoon Regional Director Melissa Speer will address the conference to provide the group with the Agency’s perspective on implementation of the new Veterans and Disability regulations.  We will make sure to bring you any new and noteworthy details or tips that she shares.

Good Morning Folks!  We just listened to Melissa Speer, OFCCP SWARM Regional Director, open up the 2014 SWARM Regional Conference from the beautiful Omni Interlocken Hotel in Broomfield, Colorado.  As you can imagine Melissa had a lot of new OFCCP developments to chat about, including the recent Presidential executive actions surrounding pay discrimination as well as the new veterans and disabilty regulations.

During her remarks about the new regulations Melissa emphasized OFCCP’s position that the new veteran hiring benchmarks and disabilty utilizational goals are aspirational – not mandatory.  In her, and OFCCP’s words,

 “Failure to meet these goals and benchmarks is not a violation, but failing to try is.”

Under the new regulations, employers are now required to “assess the effectiveness” of each of their good faith outreach efforts and to develop a plan for addressing any efforts the employer deems to not be effective.  So while OFCCP promises not issue violations to employers who do not meet the numerical goals and benchmarks, employers who can not demonstrate that they took efforts to “try” will almost surely find themselves faced with a potential violation.

With that said, now is the time to start taking stock of your diveristy partnerships and outreach efforts because once OFCCP’s commences its compliance review its too late.

On April 29, 2014, OFCCP held the first of what we expect will be several meetings with interested parties regarding impending regulations implementing President Obama’s latest efforts to combat pay discrimination.  As we previously shared, on April 8, 2014, President Obama signed Executive Order 13665 prohibiting government contractors and subcontractors from discriminating against individuals for discussing issues related to or revealing compensation.  That day the President also issued a Presidential Memorandum directing the Department of Labor to develop regulations around a new compensation data collection tool for government contractors and subcontractors.

Today’s “listening” session, attended by government contractors, civil rights organizations, industry groups, attorneys, and consultants provided stakeholders with a chance to help shape the forthcoming regulations implementing both the Executive Order and Presidential Memorandum.

Presided over by OFCCP Director Patricia Shiu, and attended by numerous other DOL officials, the listening session kicked off with a discussion about the new compensation data collection tool.  Several commenters discussed the numerous challenges faced by OFCCP in both developing the tool and analyzing the data collected.  Others addressed ways in which to minimize the burdens associated with the tool.  Yet others discussed issues unique to their industries.  OFCCP seemed particularly interested in ways to best “operationalize” the data collection tool.  Specifically, the Agency sought feedback on defining “compensation”, understanding the type of data typically housed in an HRIS, and the “lead” time contractors would need in order to report required data.

The Agency then addressed regulations implementing EO 13665.  Here, OFCCP focused on how contractors should implement the non-discrimination mandate.  Suggestions from attendees included requiring language in codes of conduct/ethics, amending EEO policy statements and providing notice to employees and applicants for employment regarding their rights.

The meeting concluded with Director Shiu thanking everyone for their participation and ideas.  While all interested parties will have a chance to formally comment on the proposed regulations, once issued, Director Shiu stressed the value of the feedback and promised to keep listening at upcoming events.

Stay tuned for further information on these rapidly developing areas and the proposed regulations which we expect by August.

In celebration of the three year anniversary of Joining Forces, an initiative connecting military families with the resources available to them, and on the heels of the effective date of OFCCP’s new veteran regulations, the White House released today a new  employment tool for veterans and employers.  The Veterans Employment Center is an online tool that connects veterans and service members with  employers.  The VEC helps translate military skills into the civilian  workforce and will also provide, among other services, a listing of upcoming job fairs and a comprehensive database of resumes for employers who are seeking to leverage the skills and talents of veterans, service members, and their spouses.

The site appears to be as billed – a valuable, multi-faceted resource for veterans and their families…as well as for federal contractors looking to employ veterans.   Job postings are accomplished through the National Labor Exchange (NLX), at US.jobs.  Many federal contractors’ jobs are already posted at US.jobs and are thus now already available to veterans exploring the new Veterans Employment Center.  If your jobs are not already listed with NLX, they may be posted individually or contractors may authorize NLX to automatically scrape their career websites and post jobs to US.jobs.  That may be accomplished by starting here, which takes you to US.jobs here.

If your current job openings are not already posted with US.jobs/Veterans Employment Center, consider visiting this resource as soon as possible.  It’s free; it appears to be a quality resource likely to attract the attention of many veterans; and OFCCP will likely expect all federal contractors to take advantage of this new resource.  While posting your jobs with the VEC will not alone fulfill your veterans outreach obligations, it appears to be a valuable step in the right direction.

In 2006, Michigan voters amended their constitution to prohibit state and local governmental entities from considering race, or granting race-based preferences, in a wide range of actions and decisions, including admissions to state universities, as well as “the operation of public employment, public education, or public contracting.”  Today, the U.S. Supreme Court ruled the ban does not violate the U.S. Constitution as applied to public university admissions.  Despite the breadth of Michigan’s constitutional amendment, the Court’s opinion was expressly limited to university admissions.

Notably, the Court was careful to point out the case was not about the constitutionality of considering race in university admissions when certain conditions are met.  As held in the 2003 Grutter case involving the University of Michigan’s law school, such consideration is permissible when race is only one factor and race is considered in order to remedy past discrimination.  Rather, the question before the Court was whether, although permissible, voters can ban such racial preferences by their government.

The implications of the Court’s ruling may prove to be significant in many areas, including minority and female business contracting preferences.  Stay tuned for more analysis.