Category Archives: Affirmative Action Plan (AAP)

OFCCP Tweaks Scheduling Letter and Itemized Listing, but Diminishes Confidentiality Protection

The Office of Federal Contract Compliance Programs (“OFCCP”) announced that, as of July 1, 2016, it is using a new Scheduling Letter and Itemized Listing when it commences compliance reviews of federal contractors.  Although the new Scheduling Letter and Itemized Listing changes language in a number of places, most of the changes are minor and provide clarification, rather than a new substantive requirement.

A notable change, however, is that OFCCP removed language that previously promised contractors that their submissions would be treated as confidential, unless disclosure was appropriate under the Freedom of Information Act.  The previous language stated, “Rest assured that OFCCP considers the information you provide in response to this Scheduling Letter as sensitive and confidential.”

In contrast, the new language states:

Please also be aware that OFCCP may use the information you provide during a compliance evaluation in an enforcement action.  We may also share that information with other enforcement agencies within DOL, as well as with other federal civil rights enforcement agencies with which we have information sharing agreement.

Finally, the public may seek disclosure of the information you provide during a compliance evaluation.  Under current law and regulations, OFCCP is required to comply with Freedom of Information Act, the Trade Secrets Act, the Privacy Act, and the 1987 Executive Order governing the disclosure of confidential commercial information.

The other changes include:

  • Adding that OFCCP “will” notify VETS if a contractor has failed to comply with the requirement to submit its annual report on veteran hiring/workforce representation (the VETS-4212 form);
  • Splitting the affirmative action plan submissions covering veterans and individuals with disabilities into separate requests;
  • Clarifying that contractors may submit either an organizational profile or a workforce analysis (as many contractors have already been doing);
  • Stating with greater specificity that, if a contractor has failed to accomplish a particular placement goal, then it must describe the good faith efforts “to remove identified barriers, expand equal employment opportunity, and produce measurable results;” and
  • Specifically giving contractors the option to either submit data using the race and ethnic categories found on the EEO-1 survey (Hispanic or Latino, White, Native Hawaiian or Other Pacific Islander, Asian, American Indian or Alaska Native, or Two or More Races) or to use the following racial and ethnic groups: African-American/Black, Asian/Pacific Islander, Hispanic, American Indian/Alaskan Native, and White.
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OFCCP Publishes Final Rule Prohibiting Numerous Forms of Sex Bias

The Office of Federal Contract Compliance Programs (“OFCCP”) has issued revisions to the long-standing sex discrimination rules for federal contractors and published the Final Rule in the Federal Register on June 15.  The Final Rule goes into effect on August 15, 2016.

The Final Rule addresses compensation discrimination, pregnancy accommodations, discrimination based on gender identity, and sex stereotypes.

Compensation Discrimination: The Final Rule prohibits discriminatory wages, but specifies that OFCCP will use a case-by-case approach in evaluating the pay practices during an audit.  OFCCP opted not to adopt a prior iteration that would have required contractors to pay equal wages to similarly-situated employees, but instead is requiring fair pay for comparable work.  Therefore, compensation differences stemming from neutral factors, such as tenure, are likely permitted.

Pregnancy Accommodations: The Final Rule is consistent with the 1978 Pregnancy Discrimination Act, which prohibits sex bias on the basis of pregnancy, childbirth, or related medical conditions.  The Final Rule requires contractors to provide accommodations to pregnant employees that are comparable to accommodations that would be provided to disabled employees.  Some examples of potential pregnancy accommodations are more frequent bathroom/hydration breaks and light-duty assignments.

Transgender Bias: The Final Rule reiterates the 2014 rule that discrimination based on gender identity is prohibited.  The Final Rule clarifies that contractors must allow employees to use bathrooms and other segregated specific facilities that are consistent with their gender identity.  The rule does not address how contractors in states requiring bathroom usage to correlate with biological sex, such as North Carolina, are to handle the competing directives.  The Final Rule also requires contractors to provide equal fringe benefits regardless of gender identity.  OFCCP is explicit that excluding medical coverage for an employee’s gender transition will be deemed facially discriminatory.  Recognizing that changes to benefit plans may take time, OFCCP said that it will consider contractors’ good faith progress on this front in determining whether an enforcement action is appropriate.

Sex Stereotypes: The Final Rule prohibits sex stereotyping.  Sex stereotyping includes judging an employee based on his/her conformance to sex-based appearance norms.  Sex stereotyping also encompasses making employment decisions based on stereotypes of “proper roles” of males/females with regard to caregiving.  OFCCP cites studies showing that mothers are less likely to be hired and are typically paid less than non-mothers, so prohibits decisions on account of one’s caregiver role.  The Final Rule also prohibits limiting roles to a specific sex; however, includes a narrow carve-out where sex is a bona fide occupational qualification because it is “reasonably necessary to the normal operation” of a “particular business or enterprise.”

Contractors should review their policies to ensure compliance with the Final Rule prior to the August 15 effective date.

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Filed under Affirmative Action Plan (AAP), Discrimination, OFCCP, Office of Federal Contract Compliance Programs

OFCCP Issues Final Rule Promoting Pay Transparency

On September 10, 2015, the Office of Federal Contract Compliance Programs (“OFCCP”) issued the Final Rule (RIN 1250-AA06) on pay transparency, which goes into effect on January 11, 2016.  The Final Rule implements Executive Order 13665, signed by President Obama signed on April 8, 2014, and stems from the Lilly Ledbetter Fair Pay Act.  OFCCP’s press release explains the rationale for the Final Rule is that pay secrecy policies foster the gender pay gap; if individuals do not realize that they are underpaid, then they cannot address the disparity.  OFCCP states that the pay gap for females remains at 23 cents for every dollar earned by males.  OFCCP also cites a pay gap for minorities.

The Final Rule prohibits federal contractors and subcontractors with government contracts in excess of $10,000 from terminating or otherwise discriminating against employees for discussing, disclosing, or inquiring about their own pay or co-workers’ pay. The Final Rule also protects pay discussions by job applicants.  Employees and job applicants who believe that they have been discriminated against for discussing, disclosing, or inquiring about pay may file discrimination complaints with OFCCP.

The Final Rule contains an exception for where the employee makes the disclosure of pay information based on information obtained in the course of performing his or her essential job functions.  For example, an employee in the human resources department may not disclose employee salaries under the guise of the Final Rule.  Likewise, the Final Rule contains an exception for action taken against an employee pursuant to a workplace rule that does not prohibit compensation discussions.  For example, if an employee violates a policy regarding timeliness, the employer may enforce the policy even if the employee was late in beginning his or her shift because he or she was discussing pay with other employees.

Contractors and subcontractors must incorporate this new non-discrimination requirement into the EEO clause in covered contracts and subcontracts, handbooks, and application materials.

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Filed under Affirmative Action Plan (AAP), Compensation, Department of Labor, OFCCP, Office of Federal Contract Compliance Programs

OFCCP Revises the VEVRAA Hiring Benchmark

The Office of Federal Contract Compliance Programs (the “OFCCP”) recently reduced the VEVRAA hiring benchmark for protected veterans from 7.2% to 7.0%. The hiring benchmark is intended to reflect the percentage of veterans in the civilian workforce across the country. The OFCCP reduced the hiring benchmark in response to the 2014 year-end data of the Bureau of Labor Statistics.

Federal contractors and subcontractors opting to use the hiring benchmark for their 2015 affirmative action plans should now use this revised benchmark, regardless of where in the country their establishments are located. Federal contractors and subcontractors may still opt to instead use the OFCCP’s five factor method to develop an individualized hiring benchmark.

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OFCCP Opens LGBT Final Rules to Limited Notice and Comment While Lawmakers Protest

The Office of Federal Contract Compliance Programs (“OFCCP”) is seeking limited public comment on the information collection requirements (“ICR”) of its Final Rule for LGBT workers amidst protests by members of the Committee on Education and the Workforce of the House of Representatives over its rulemaking process.  OFCCP had initially announced on December 3, 2014 its Final Rule implementing President Obama’s Executive Order 13672, which prohibits discrimination by federal government contractors and subcontractors on the basis of sexual orientation and gender identity.

On December 9, 2014, OFCCP filed a notice in the Federal Register seeking comments on the ICR in accordance with the Paperwork Reduction Act, which requires OFCCP to invite public comment on the burdens and utility of any new information collection requests.  The deadline for comments on the ICR is February 6, 2015.  The Final Rule is slated to become effective on April 8, 2015.

Before the Final Rule was published, the Committee on Education and the Workforce of the House of Representatives, which oversees OFCCP, sent a letter to OFCCP Director Patricia Shiu protesting OFCCP not opening the Final Rule for public comment.  It is unclear at this point as to what if any impact this will have on OFCCP’s Final Rule.

What Is New in the Final Rule

Under the Final Rule, contractors are prohibited from discriminating on the basis of sexual orientation and gender identity.  The new regulations do not define “sexual orientation” or “gender identity”, but OFCCP notes that it uses the same definition used by Equal Employment Opportunity Commission and case law developed under Title VII.   As of the effective date of the Final Rule, OFCCP will investigate complaints of discrimination on basis of sexual orientation and gender identity.

The Final Rule also requires contractors to update some of their technical compliance practices.  The Final Rule modified the Equal Opportunity Clause, which must be flowed-down in all covered subcontracts that are entered or modified on or after the effective date.  Contractors are still permitted to incorporate the Equal Opportunity Clause by reference.  The Final Rule also requires contractors to update their job postings and advertisements to indicate that all qualified applicants will receive consideration for employment without regard to sexual orientation or gender identity in addition to the normal protected categories of race, color, religion, sex, national origin, veteran status, and disability status.

What is Unaffected in the Final

The new regulations do not impact existing affirmative action plan requirements for females and minorities.  Contractors are not obligated to solicit information from applicants or employees pertaining to sexual orientation or gender identity, nor report or analyze such data for applicants and employees.  OFCCP’s Frequently Asked Questions specify that contractors may still choose to ask applicants and employees to voluntarily self-identify their sexual identity or gender identity, unless prohibited by state law.

What Contractors Should Do

Contractors should proactively review and update their job postings, job advertisements, and policies to prohibit discrimination on the basis of sexual orientation and gender identity.  Although the Final Rule does not go into effect until April 8, 2015, OFCCP noted that gender identity is already prohibited by OFCCP’s laws based on their August 2014 directive.  In addition, contractors who flow-down the entire Equal Opportunity Clause in covered subcontracts should update the clause to include the new language.

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Filed under Affirmative Action Plan (AAP), Department of Labor, OFCCP, Office of Federal Contract Compliance Programs

OFCCP Releases New Scheduling Letter and Itemized Listing

More than three years after the Office of Federal Contract Compliance Programs (“OFCCP”) sought approval for a new Scheduling Letter and Itemized Listing, OFCCP published a notice in the Federal Register on September 30, 2014 revealing that it had received Office of Management and Budget (“OMB”) approval. Yesterday, OFCCP announced that it would not schedule any supply and service compliance evaluations from October 1, 2014 to October 15, 2014 to allow contractors to “become acquainted with the new letter and itemized listing”, but it plans to start using the new Scheduling Letter and Itemized Listing for all audits scheduled after October 15, 2014.

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Filed under Affirmative Action Plan (AAP), Department of Labor, OFCCP, Office of Federal Contract Compliance Programs, Scheduling Letter

OFCCP Publishes New FAQs on Disability and Veteran Rules

The Office of Federal Contract Compliance Programs (“OFCCP”) recently published several new Frequently Asked Questions (“FAQs”) on the newly minted veteran and disability rules to answer lingering questions of contractors, particularly with respect to how to conduct the new data analyses required by these rules.  OFCCP initially published a number of FAQs immediately after the August 27, 2013 release of the final veteran and disability rules.  Since then, it has periodically updated those FAQs to provide guidance to contractors on how to comply with and implement the new rules.  The most recent installments to the FAQs provide some important guidance to contractors.

Counting Veterans Self-Identification

Background on FAQ

The new veteran rules now require contractors to offer applicants an opportunity to identify themselves as protected veterans at both the pre and post-offer stages.  Contractors must use applicant responses to determine whether they have met their annual hiring benchmarks for veterans.  Contractors can establish their hiring benchmarks either by using the national percentage established by OFCCP (currently 8%) or creating their own hiring benchmark using certain criteria identified by OFCCP.

New FAQ

Contractors have been unsure whether they can count an applicant towards the veteran hiring benchmark in situations where the applicant identifies himself as a protected veteran during the pre-offer stage but does not self-identify as a veteran during the post-offer stage.  OFCCP noted in the following FAQ that contractors can count those applicants towards the annual benchmark.  We agree that contractors should be able to assume that applicants correctly identified themselves at the pre-offer stage.

If an individual self-identifies as a protected veteran at the pre-offer stage of the application process, but does not self-identify again at the post-offer stage, may a contractor still count the individual as a protected veteran for purposes of applying the hiring benchmark and performing the required data collection analysis?

Section 60-300.42 of the new VEVRAA regulations requires contractors to invite applicants to self-identify as “protected veterans” at both the pre-offer and post-offer stages of the application process. If an applicant self-identifies as a “protected veteran” at the pre-offer stage but not at the post-offer stage, the contractor may identify the new hire as a “protected veteran” for purposes of compliance with the new VEVRAA regulations.

Jobs Filled

Background on FAQ

The new veteran and disability rules require contractors to conduct various data analyses during their annual affirmative action plan cycles analyzing, among other items, the total number of jobs filled and the total number of job openings.  There has been some confusion on what “jobs filled” means and how that differs from people hired.  OFCCP previously explained that “jobs filled” refers to “all jobs the company filled by any means” including competitive (i.e., hiring) and non-competitive selections (i.e., merit promotions, transfers, and reassignments).

New FAQ

There have been some lingering questions about whether transfers within the same position or automatic promotions would qualify as “jobs filled”.  OFCCP clarified in the following FAQ that jobs filled only included movements into different positions.

Does the number of “jobs filled” include step or ladder movements that are automatically attained upon completion of a stated event, such as time in the job or attainment of a particular certification?

Both competitive and non-competitive movements may qualify as “jobs filled,” so long as the movement is one into a different position, rather than simply a movement within the same position. This will necessarily be a fact-based determination. So, for example, a time-driven salary increase from one “step” to the next within the same position would not be a “job filled,” since there was not any movement into a new position. By contrast, if an apprentice completes a certification program and moves into a journeyman position, then such movement would be a “job filled,” since it is a movement from one position to another.

Hiring Benchmark for Veterans

Background on FAQ

As explained above, the new veteran rules require contractors to create annual hiring benchmarks whereby contractors assess their hiring of veterans in the year preceding their affirmative action plan to determine if they are meeting certain targets.

New FAQ

Many contractors have wondered how the term “hires” would be interpreted and whether it would include promotions.  In the following FAQ, OFCCP affirmed that both internal and external competitive hires would be counted in the annual analyses.

When applying the hiring benchmark, should contractors use the same definition of “hires” that is used for purposes of the data collection analysis required by 60-300.44(k)?

Yes. Since neither the new regulations, nor its preamble, specify a different definition of “hires” for the VEVRAA hiring benchmark, contractors should use the definition of hires that is applicable to the data collection analysis obligation. That definition encompasses those applicants (both internal and external to the contractor) who are hired through a competitive process, including promotions. This will ensure consistency in the interpretations of these key provisions of the new regulations.

Self-Identification of Disability

Background on FAQ

Under the new disability rules, contractors are required to invite their current employees to self-identify as individuals with disabilities.  This must be done once between March 24, 2014 and March 24, 2015 and then once every five years after that.

New FAQ

Many contractors have employees complete information through company portals and intranets, so contractors have naturally wondered whether they can provide the self-identification form to employees in that manner.  OFCCP found in the following FAQ that using such a process was acceptable.

May a contractor fulfill its obligation to invite its current employees to self-identify as having a disability by asking them to sign into an employee portal on the company Intranet?

The Section 503 regulations do not prescribe a particular method that contractors must use to invite its employees to self-identify. Contractors therefore have the flexibility to choose any method or methods that are reasonable and likely to be effective, given its particular circumstances. For example, contractors may choose to inform employees that it is inviting their self-identification in the same manner it uses to disseminate other important workplace notices to its employees. This might be emailing the notice of the survey and the self-identification form, or an Intranet link to the form, to all employees, or it might be prominently posting a notice with a link to the self-identification form on the company Intranet, prominently posting a notice and copies of the form in the employee lounge, or distributing a notice and copies of the form where employees go to sign in or pick up their paycheck.

Utilization Analysis for Disabled

Background on FAQ

On the next affirmative action plan after March 24, 2014, contractors must conduct a utilization analysis to determine the whether 7% of each job group (or for the entire workforce if the contractor has less than 100 employees) is comprised of individuals with disabilities.

New FAQ            

Some contractors have wondered whether they may be able to exclude employees from this analysis if they do not respond to the invitation to identify their disabled status.  Not surprisingly, OFCCP indicated in the following FAQ that employees who did not respond should be counted in the analysis as nondisabled individuals unless the contractor has actual knowledge that those employees are disabled.

How should non-responses to the invitation to self-identify as an individual with a disability be treated when conducting the utilization analysis?

The regulations require contractors to conduct an annual utilization analysis to determine the representation of people with disabilities in each job group, or if it has 100 or fewer employees, in its workforce as a whole. To calculate the percentage of a job group (or workforce) that is comprised of people with disabilities contractors should use the same methodology used to calculate the percentage of a job group (or workforce) that is comprised of any other specific demographic group. Specifically, contractors should compare the number of individuals identified as having a disability to the total number of employees in the job group. Non-responses should be counted solely in the job group (or workforce) total, unless the contractor has actual knowledge that a particular non-responsive individual(s) has a disability. The contractor may count as an individual with a disability any individual who it actually knows to have a disability, whether or not the individual chose to self-identify.

Hiring of Disabled Candidates

In large part due to OFCCP’s repeated emphasis that contractors must take affirmative action to hire and promote individuals with disabilities in accordance with the new disability rules, contractors have wondered whether they could reject disabled candidates who met the basic or minimum qualifications for the position but were not the best candidates.  Although OFCCP correctly stated that contractors are only to hire the best qualified candidates for the position, in the following FAQ they underscored the importance of contractors having adequate and proper documentation to show why they selected a certain candidate over a minimally qualified individual with a disability.

Under the new regulations, must a contractor hire an individual with a disability who is not the best qualified but who meets the minimum requirements of the job for the purposes of affirmative action?

No. The Section 503 regulations do not require contractors to hire an individual who is not qualified for the position being sought. Nor do they require contractors to hire a less qualified candidate instead of the best qualified candidate for the purposes of affirmative action. However, it would not violate Section 503 for a contractor to select a person with a disability over a candidate without a disability who was equally or better qualified, so long as that selection was not based on a prohibited factor such as race, gender or ethnicity.

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