Its about one month since OFCCP’s new rules covering Veterans and Individuals with Disabilities became effective and the agency is starting to vigorously enforce the new rules.  Combined that with OFCCP’s increasingly aggressive enforcement of Directive 307 – which sets forth the agency’s new approach to investigating employers’ compensation systems for systemic discrimination – and there’s much employers need to learn and do differently to respond to the audits OFCCP has initiated across the country.

With that in mind, my colleague Lynn Clements and I will be faculty presenters at the OFCCP Institute’s Annual Summit next month in DC.  See below for details.  Hope to see you there.

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The OFCCP Institute co-chairs and faculty invite you to the 2014 Annual Summit. This year’s program has a full day of basic training followed by two days of advanced training.

The presenters include:

The Institute co-chairs: David Cohen, David Fortney and Mickey Silberman.

The following members from The Institute’s newly announced faculty:

  • Michael G. Aamodt, Ph.D. from DCI Consulting Group
  • Lynn A. Clements, Esq. from Jackson Lewis P.C.
  • Shafeeqa Watkins Giarratani, Esq. from Fulbright & Jaworski LLP
  • Valerie J. Hoffman, Esq. from Seyfarth Shaw, LLP
  • Leslie E. Silverman, Esq. from Fortney & Scott, LLC
  • W. Carter Younger, Esq. from McGuireWoods, LLP

MAY 20- BASIC TRAINING:
This one day session provides the basics on federal contractor EEO and affirmative action compliance obligations. This session establishes the foundation for attendees to participate in the advanced training program offered immediately thereafter, or provides a refresher course for the more advanced compliance professional.

MAY 21-22 ADVANCED TRAINING:
During the two-day advanced session, the conference co-chairs and faculty will provide detailed updates on the latest regulatory, audit and enforcement developments of the OFCCP, including:

  • Updates on compliance with the new disability (Section 503) and veterans (4212) regulations and how the OFCCP is enforcing these provisions.
  • The Agency’s latest approach to compensation discrimination enforcement and insights into conducting a successful proactive compensation analysis.
  • OFCCP audit and enforcement trends, including a discussion of OFCCP hiring discrimination claims and the Agency’s investigations and preliminary analyses.
  • An overview of the key developments of the OFCCP with a look at their recent directives, initiatives and publications including the new Background Check Directive and a review of 2013 OFCCP Conciliation Agreements.

Faculty and co-chairs also will provide in-depth insights into challenges facing every federal contractor and provide recommendations on successful compliance practices. Additionally, we have invited distinguished guest speakers, and there will be ample opportunity for networking and discussions of best practices. Attendees will come away with the tools and knowledge to remain a fully compliant federal contractor.

Full agenda: click here

For more information and to register: click here

For those of you needing to book travel, please note: the room block at the conference location ends on Monday, April 21st and the hotel is close to being sold out so please reserve your room immediately to guarantee availability.

 

Its getting harder to be a Federal contractor.  On February 12, President Obama signed an executive order bumping the minimum wage for at least some federal contractor employees to $10.10 an hour, raising many questions which we discussed here.  But the President didn’t stop there.  Based on his action today, two new obligations will soon apply to contractors, both concerning the administration’s increased efforts to uncover and eradicate pay discrimination.

Today, on National Pay Equity Day – the day which symbolizes how far into 2014 women must work to earn what men earned in 2013 – the President amended Executive Order 11246 to prohibit discrimination or retaliation against “any employee or applicant because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant.” Why?

Ensuring that employees of Federal contractors may discuss their compensation without fear of adverse action will enhance the ability of Federal contractors and their employees to detect and remediate unlawful discriminatory practices, which will contribute to a more efficient market in Federal contracting.

Notably, this provision does not apply to employees who have access to such information as part of their essential job duties (such as employees in HR or Compensation) and who make unauthorized disclosure of the information.

The new EO directs the Secretary of Labor to publish within 160 days proposed regulations which would apply to federal contracts and subcontracts entered into after their effective date.

Likely even more important, President Obama also issued today a memo directing the DOL to publish proposed regulations within 120 days that would require federal contractors and subcontractors to submit to OFCCP pay, race and gender data on their employees.  He noted a number of laws mandating that contractors not discriminate against employees on the basis of pay. However, “effective enforcement of this mandate is impeded by a lack of sufficiently robust and reliable data on employee compensation, including data by sex and race.”

So, even in the absence of an OFCCP compliance review, contractors will be required to submit sensitive pay data to DOL on its employees. The memo indicates DOL will use the pay data to more effectively target OFCCP’s enforcement resources on those employers which the compensation data suggests may be engaging in pay discrimination.

So, what do these two actions mean for federal contractors?

The ability of employees to discuss their pay and discover unwarranted disparities is an important tool; just ask Lilly Ledbetter who was unaware she was being paid differently than her peers until the end of her career.  However, Sections 7 and 8 of the National Labor Relations Act (NLRA) already protect this right.  The NLRA protects the “concerted activities” of employees, both union and non-union, and prohibits interfering with or restraining the exercise of those rights.  Concerted activity includes discussing pay.  Thus, unless a federal contractor falls outside the coverage of the NLRA, today’s amendment to the Executive Order likely does not impose new obligations.

The submission of sensitive pay data to OFCCP, however, is another story.  You may recall OFCCP has been interested in this topic for some time.  The agency’s obtaining access to wide-ranging pay data from contractors and using it to select contractors for compliance audits would likely be a “game-changer.”  Employers that don’t annually conduct in-depth analyses of pay systems for potential discrimination – required by current OFCCP regulations – would be put in the dangerous position of submitting pay data to OFCCP without knowing what unexplained disparities and monetary exposure exist in the data.

A data collection tool requiring submission of confidential pay data also raises concerns about what safeguards OFCCP would have in place to ensure that data is not obtained, whether intentionally or via data breach, by third parties who could publish it publicly or otherwise use it to do harm to employers.

The President’s directive to the DOL today to implement a pay data collection tool leaves many questions unanswered.  But one thing is certain: OFCCP, so intent to increase its pay discrimination enforcement efforts – and to obtain sensitive wide-ranging pay data so it can do so – has the full backing of President Obama. Expect OFCCP to move quickly with a proposed rule for the new data collection process.

Stay tuned for additional developments.  And when the proposed rules are published, consider weighing in during the notice and comment period.  The contractor community has a significant stake in what happens next.  Let your voice be heard.

Tomorrow is National Equal Pay Day:  the day which symbolizes how far into 2014 women must work to earn what men earned in 2013. Pursuing his equal pay agenda and his recent penchant for executive orders, President Obama will reportedly sign two Executive Orders tomorrow with implications for federal government contractors.  One order is said to prohibit retaliation against employees who discuss pay with co-workers, a right currently protected by Section 7 of the National Labor Relations Act, which is applicable to most employers – not just federal contractors or unionized workforces. A similar non-retaliation provision also appears in the pending Paycheck Fairness Act.

The other, and seemingly more controversial, Executive Order President Obama is expected to sign will direct the Department of Labor to issue rules requiring federal contractors to provide compensation data based on sex and race.  If you remember, OFCCP proposed a similar compensation data collection tool in 2011, which was resoundingly criticized by the National Research Council.

Stay tuned to see what new (or newly emphasized) obligations these executive orders mean for federal contractors.

The saga of OFCCP v. Florida Hospital of Orlando is synonymous with OFCCP’s ongoing battle to establish jurisdiction over healthcare providers.  In late-2008, OFCCP brought an enforcement action after the Hospital objected to OFCCP’s jurisdiction, claiming it was not a covered “subcontractor.”  An administrative law judge in October 2012 found the Hospital to be a covered subcontractor because its services were “necessary” to the performance of Humana’s contract – satisfying the first prong of the “subcontractor” definition.

Then came the December 2012 National Defense Authorization Act (NDAA), which expressly exempted from OFCCP jurisdiction medical providers who participate in the TRICARE program.  As we reported in July 2013, the Administrative Review Board (ARB) concluded OFCCP could assert jurisdiction over Florida Hospital based on the first prong (despite the 2012 NDAA).  The ARB nonetheless remanded the case to the Administrative Law Judge because the payments to the hospital under TRICARE might constitute exempt “federal financial assistance.”

And so we waited, again.

As we reported just a few weeks ago, in the face of a proposed bill (H.R. 3633) which could have broadly exempted healthcare providers, not just TRICARE participants, the DOL’s Secretary Perez agreed in a letter to a 5-year moratorium on compliance investigations of TRICARE employers.

Today, an Administrative Law Judge dismissed after OFCCP withdrew its complaint against Florida Hospital.

Is the fight over?  Hardly.  As OFCCP has repeatedly stated, it will continue to determine jurisdiction over healthcare providers on a “case-by-case” basis, and TRICARE involvement is only one such basis.  Healthcare providers must continue to assess their federal government connections to determine affirmative action coverage.

With March 24th come and gone many employers are still working on implementing the required elements of OFCCP’s new veteran and disability regulations and making preparations for rolling-out Subpart C compliance measures.

As of March 24th, contractors who are party to a collective bargaining agreement (CBA)

 “shall notify union officials and/or employee representatives to inform them of the contractor’s policy, and request their cooperation.”

What sort of cooperation are contractors to seek from unions?  Certainly, if the CBA calls for the union to refer applicants, we want the union to provide equal opportunity and engage in its own efforts to recruit qualified veterans and the disabled.  Is there more?

In addition to notifying Unions, contractors are also now obligated to provide notice of their EEO/AA policy and affirmative action efforts to vendors.  This obligation was previously optional under the old regulations but is required in the revised rules under Subpart C.  This obligation is separate and apart from the obligation to include the required citation references and obligatory language in purchase orders and contracts.  Thus, in addition to the contract clause requirements, contractors must now

“send written notification of company policy related to affirmative action efforts to all subcontractors, including subcontracting vendors and suppliers, requesting appropriate action on their part.”

But what does requesting appropriate action entail?  What action should we request our vendors take?  Does appropriate action mean requesting subcontractors and vendors voluntarily engage in efforts to recruit and hire qualified veterans and the disabled?  OFCCP has not provided guidance on this point . . .

Given we must provide the required notice and request action and cooperation, but have little guidance from OFCCP, what do we request specifically?  It seems the best practice at this point is to spell out our EEO/AA policy and simply say that the company “requests [Union]’s cooperation in advancing these principles” and requests vendors “take appropriate action to support these principles.”

With the passing of the March 24th effective date for OFCCP’s new veteran and disability regulations, we will turn our focus to the Sub-Part C obligations which must be implemented with the next regular update to your affirmative action plan.  Don’t worry though, we will also continue to blog about enforcement and implementation of the non-Sub-Part C obligations to let you know what we’re seeing and hearing from OFCCP and audits.

At the top of the list of Sub-Part C items, and likely the first on everyone’s minds, are the new Self-ID obligations.

Under the new regulations, contractors for the first time are required to solicit disability and veteran status for applicants, pre-offer.  Contractors are also now required to solicit disability status post-offer.

With respect to the invitation to self-id as a disabled individual, OFCCP has made it relatively “easy” by proscribing the language and form contractors must use to obtain this information.

With respect to inviting individuals to provide their veteran status, OFCCP has offered suggested language and forms, and has left it up to each employer to develop the process for obtaining this information.

At the pre-offer stage, the regulations state employers

 “shall invite applicants to inform the contractor whether the applicant believes he or she is a protected veteran”

At the post-offer stage, the regulations state employers

 “shall invite applicants to inform the contractor whether the applicant believes he or she belongs to one or more of the specific categories of protected veterans.”

Disabled veteran is one of the categories of protected veteran covered by the regulations.

The regulation says nothing about whether it is permissible to request applicants to identify their particular category of “protected veteran” at the pre-offer stage, or whether employers must wait to make this inquiry until the post-offer stage and many employers are contemplating using a single self-id form for the pre- and post-offer inquiries in order to streamline their processes and information gathering systems, as well as reduce likely confusion for applicants.

At an industry meeting in Washington D.C. last week, representatives from OFCCP raised concerns with this approach – citing specifically the concern around collecting data on disabled veterans at the pre-offer stage outside of the pre-approved disability self-id form.

So, what are employers to do?

At this point it is up to employers to determine their course of action after weighing the potential risk of implementing a one-form system that is not explicitly proscribed by the regulations (nor expressly prohibited) against the benefits of working with a single form.

A couple of things to keep in mind as you consider the options:

First, the obligation to invite disclosure of protected veteran status is contained in Sub-Part C of the regulations, which means employers have some time to work through this issue – less time unfortunately if you have an April 1 plan year date.

Second, given the discussion around this issue, OFCCP may issue some more formal guidance in this area in the near future that will hopefully provide clarity.

But, keep in mind OFCCP comments in industry meetings (or in FAQs and on webinars for that matter) are not binding law.  In other words, a subsequent FAQ response or Webinar statement saying employers cannot invite pre-offer applicants to identify a specific category may not be the last word given that the regulation itself does not prohibit the practice.

As always, we will look to update you as soon as we learn of any new developments in this area.

As previously reported, a number of federal contractor associations have raised questions and concerns regarding the new veteran and disabled regulations.  In November 2013, Associated Builders and Contractors, Inc. (“ABC”) challenged the validity of the disability regulations in federal court and today the United States District Court for the District of Columbia upheld the regulations, just 3 days before many of new requirements become effective.

The court upheld OFCCP’s “broad” authority to issue the disability rules, as well as their reasonableness under Section 503 of the Rehabilitation Act, including the reasonableness of the basis for the 7% disability utilization goal.  The court also found that collecting disability information does not violate the ADA.

While ABC may still appeal this district court ruling, the court denied ABC’s request to delay implementation the new regulations.  As a result, the regulations will “go live” on Monday March, 24 as planned.

In addition to releasing the veteran benchmark database, OFCCP has also launched a new outreach and recruitment database for use by contractors in connection with implementation of the new veteran and disability regulations.

The OFCCP’s Disability and Veterans Community Resources Directory can be found on the OFCCP Web site athttp://www.dol-esa.gov/errd/index.html.  This new resource supplements the agency’s existing Employment Resources Referral Directory (ERRD).

In prepartion for the March 24th effective date of the Agency’s new veteran regulations, OFCCP announced today release of the veteran benchmark database to be used by contractors when establishing the newly required veteran hiring benchmark.

You can access the VEVRAA Benchmark Database through OFCCP’s Web site at http://www.dol-esa.gov/errd/VEVRAA.jsp.

As the last few days before the new veteran and disability regulations go into effect, we wanted to take moment in our  Countdown to March 24th Effective Date: Are you Ready to Flip the Switch series to help you clarify (and check-off) the obligations with respect to the various EEO notices, policy and posting requirements under the new rules.

The 5 notices to keep track of, each with different notice/posting requirements, are:

1.     The EEO Clause (41 CFR 60-300.5(a) and 741.5(a).

The EEO Clause sets out the core affirmative action obligations.  It is present in prime federal contracts, and must be disseminated by contractors to others.  Each contractor must incorporate (at least by reference) the EEO Clause into covered subcontracts and purchase orders, as covered in this blog post.

 

2.     The EEO Tagline (41 CFR 60-300.5(a)12 and 741.5(a)7).

The EEO Clause requires employers include an “EEO Tagline” in all job ads and solicitations which serves to notify job seekers that the contractor is an equal opportunity employer. Under the new regulations, employers must inform job seekers that they will receive consideration without regard to their “disability” or protected veteran status.  OFCCP has said employers, at a minimum, must do so with so a reference to “disability” and “vets” in the tag line on job postings. – a “D” or “V” abbreviation is not sufficient.

 

3.     The “EEO is the Law” Poster (41 CFR 60-300.5(a)9 and 741.5(a)4.

The EEO Clause itself requires covered contractors to post a notice of EEO rights for both applicants and employees.  OFCCP recently clarified the notice is the “EEO is the Law” poster.

  • Employees:  the Poster must be physically posted for employees in conspicuous places (e.g. employee break-room) in a manner and format accessible and understandable to employees with disabilities.  In addition to required physical postings, the Poster may be conspicuously included as part of the employee Intranet.  Such an electronic posting will suffice to notify remote employees (if any) if the contractor:  (i) provides computers to remote employees; or (ii) has actual knowledge remote employees can access the Intranet.  Alternatively, the contractor may email the Poster to remote employees.
  • Applicants:  as we discussed previously, the Poster must still be conspicuously posted in a physical location if the contractor accepts walk-in applications.  Moreover, contractors must now incorporate the Poster into their online application systems, such as through an electronic link to the Poster with an explanatory statement as to what the link lead to.

 

4.     The EEO/AA Policy Statement (41 CFR 60-44(a) and 741.44(a).

In addition to the Clause and the Poster, contractors must have a separate EEO/AA Policy Statement with specified provisions, which must now indicate the support of the top U.S. Official, rather than the highest official at each contractor location.  The Policy Statement must be included in your AAP and, in the words of the regulations, disseminated internally and externally.

  1. The Policy Statement must be posted on bulletin boards in a manner and format accessible to disabled employees, as with the Poster;
  2. Because contractors must also post the location and hours during which the veteran and disabled AAPs may be viewed by applicants and employees, some contractors include this information in the Policy Statement;
  3. It must be included in the employee handbook or otherwise made available to employees;
  4. If the contractor is a party to a union contract, the union must be notified of the Policy Statement and requested to cooperate with the policy; and
  5. In addition to other outreach and recruitment efforts for qualified veterans and disabled persons, contractors must send written notice of the Policy Statement to subcontractors, vendors and suppliers and request “appropriate action” on their part.  (60-300.44(f)(1)(ii) and 741.44(f)(1)(ii).

 

5.     Your EEO Policy.

Your policy manual and/or employee handbook undoubtedly also contains an EEO policy which may cover other statuses, such as marital status and sexual orientation.  While your EEO Policy, the EEO/AA Policy Statement and EEO Tagline are not required to be consistent, it makes sense to do so in order to send a consistent status coverage message.  However, the EEO/AA Policy Statement and your EEO Policy do not necessarily need to be the same document, and it may be preferable to keep them separate as your EEO Policy likely extends protections not covered by the affirmative action regulations.

Stay tuned tomorrow as we continue the countdown to March 24th. . .