Tag Archives: Department of Labor

Executive Order Requiring Paid Sick Leave Is On The Horizon

President Obama is said to have drafted an Executive Order, obtained by the New York Times, which would require federal contractors and subcontractors to provide their employees with a minimum of 56 hours (about 7 days) of paid sick leave annually to use for their own illness or to care for sick relatives.  The draft order would also allow the leave to be used for medical attention, counseling, and legal action relating to domestic violence and sexual assault.  The draft order specifies that the right to take paid leave cannot be contingent upon the employee finding a replacement during the leave.  Unpaid sick leave would carry over from year to year.  Compliance with the Executive Order would be a pre-requisite to obtaining a contract with the Government.

President Obama’s action comes after the Department of Labor (the “DOL”) released a statistic showing that 39% of the private sector work force currently has no paid sick leave.  The DOL is said to be reviewing the draft order, but has stated that no final decision has been made yet.  If the order is issued, the DOL secretary will issue detailed regulations by September 30, 2016.

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OFCCP Proposes New Sex Discrimination Guidelines for Contractors and Subcontractors

On January 28, 2015, the Office of Federal Contract Compliance Programs (“OFCCP”) announced proposed changes to its sex discrimination guidelines (“Guidelines”).  The current Guidelines set forth the interpretations and guidelines for implementing the nondiscrimination and affirmative action requirements related to sex under Executive Order 11246.  The Guidelines have not been updated since 1970.  According to OFCCP, the proposed changes to the Guidelines will not impose any new obligations on federal contractors and subcontractors, but merely “align[s] OFCCP’s regulations with [the current law and interpretations under] Title VII of the Civil Rights Act of 1964, as interpreted by courts and the Equal Employment Opportunity Commission.”

The notice of proposed rulemaking addresses various issues, including pay, sexual harassment, failure to provide workplace accommodations for pregnancy and gender identity, and family caregiving.  The highlights of the proposed Guidelines include:

  • Adverse treatment of an employee because of gender-stereotyped assumptions about family caretaking responsibilities is discrimination;
  • Leave for childcare must be available to men on the same terms as it is available to women;
  • Contractors must provide workplace accommodations to women affected by pregnancy, childbirth, and related conditions, ranging from extra bathroom breaks to light-duty assignments;
  • Compensation discrimination can result from job segregation or classification on the basis of gender, not just unequal pay for equal work;
  • Contractors must provide equal benefits and equal contributions for both males and females participating in fringe-benefit plans;
  • The Guidelines now include explicit prohibition of both quid pro quo and hostile work environment sexual harassment and encourage contractors to develop and implement procedures to “ensure an environment in which all employees feel safe …[and] are not harassed because of sex”;
  • Adverse treatment of employees because they do not conform to gender norms and expectations about appearance, attire, and behavior is unlawful sex discrimination; and
  • Discrimination based on an individual’s gender identity is unlawful sex discrimination.

OFCCP has included a new page containing FAQs and other resources related to changes proposed to the Guidelines.  The proposed Guidelines are expected to be published in the Federal Register on January 30, 2015.  Assuming it is published on that date, interested parties will have until March 31, 2015 to provide comments.

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OFCCP Publishes New FAQs on the Collection of Self-Identification Information for Protected Veterans

On January 20, 2015, the Office of Federal Contract Compliance Programs (“OFCCP”) published two Frequently Asked Questions (“FAQs”) addressing what self-identification information contractors are required to solicit from protected veterans during the post-offer stage of the application process.  Specifically, in light of the new VETS-4212 Form that does not require information on the specific protected veteran categories, OFCCP considered whether, contractors must continue to solicit information about the specific protected veteran category or categories that an applicant falls into during the post-offer stage, or whether contractors can more broadly invite applicants to self-identity as protected veterans.  OFCCP decided that contractors need not collect such category-specific data during the post-offer stage:

[S]ince the new VETS-4212 report no longer requires contractors to provide this information by the individual protected veteran categories, contractors are not required to invite self-identification by category in order to comply with VEVRAA’s post-offer invitation requirement.  Rather, contractors need only invite those offered a job to indicate whether they are protected veterans under any of the VEVRAA categories.

This marks a change from the previous post-offer requirement.  The underlying self-identification requirements come from OFCCP’s current regulations, issued on March 24, 2014, which require contractors to invite applicants to voluntarily self-identify their protected veteran status during both the pre-offer and post-offer stages of the application process.  For the pre-offer stage, contractors are not required to invite applicants to self-identify their specific protected veteran categories.  There is no change to this requirement. At the post offer stage, which includes the period after candidates receive offers of employment but before they began working, contractors were required to invite applicants to self-identify the specific category or categories of protected veteran to which they belong, which includes recently separated veterans, disabled veterans, Armed Forces service medal veterans, and active duty wartime or campaign badge veterans.

Until now, the reason for the category-specific data at the post-offer stage was needed to complete the Veterans Employment and Training Services (“VETS”) VETS-100A Form. However, in September 2014, after OFCCP’s veteran regulations had gone into effect, VETS released a new VETS-4212 Form to replace the VETS-100A form.  Under the new VETS-4212 form, contractors are only required to report aggregate data on the number of protected veterans rather than the specific categories of protected veterans.  On this basis, OFCCP reasoned in the new FAQs that contractors are no longer required to solicit information about the specific categories of protected veterans.

OFCCP, however, stated that contractors may still solicit such information.  In deciding whether to continue soliciting the specific protected veteran categories from applicants at the post-offer stage, contractors should weigh the value of this more detailed information with the burden of the additional recordkeeping and the risk of collecting information that is no longer required by OFCCP.

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Filed under Department of Labor, OFCCP, Office of Federal Contract Compliance Programs, Veterans

OFCCP Sends New Round of Potential Audit Letters

The Office of Federal Contract Compliance Programs (“OFCCP”) recently sent Corporate Scheduling Announcement Letters (“CSALs”) to 2,500 federal contractor establishments warning of possible audits.  OFCCP sends CSALs to contractors’ specific establishments as a courtesy to let contractors know that certain locations have been identified for potential audit.  CSALs do not mean that the contractor has been selected for an audit, but rather put contractors on notice that their establishments may be audited.  The audit does not actually begin until the contractor receives the Scheduling Letter from OFCCP.

Most OFCCP audits for supply and service contractor establishments are based on the Federal Contractor Selection System (“FCSS”). The FCSS generally releases names of contractors for audits two times per fiscal year.  This latest round of CSALs marks the first release of the FY 2015.  According to OFCCP’s FAQ, 993 distinct companies and 25 industries are represented among the 2,500 establishments on the FY 2015 scheduling list.  This list includes 27 Corporate Management Compliance Evaluations where OFCCP investigates glass ceiling issues.  Contractors can confirm whether one or more of their establishments were mailed CSALs by faxing a written request on company letterhead to OFCCP’s Division of Program Operations at (202) 693-1305.

Because contractors receiving CSALs are scheduled for audits in most cases, contractors receiving these notices should start to review their compliance and prepare for a potential audit as soon as possible. This is particularly important in light of OFCCP’s new Scheduling Letter, which drastically expanded the data required to be submitted to OFCCP at the outset of an audit.  You can learn more about the new Scheduling Letter here.

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Filed under CSAL, Department of Labor, OFCCP, Office of Federal Contract Compliance Programs, Scheduling Letter

OFCCP Releases Proposed Rule Prohibiting Adverse Action Against Employees and Applicants Discussing Pay

On September 15, 2014, the Office of Federal Contract Compliance Programs (“OFCCP”) released its Notice of Proposed Rulemaking (“Proposed Rule”) implementing President Obama’s Executive Order 13665 (“EO 13665”) banning contractors from taking adverse action against employees and applicants who discuss their pay.  When President Obama signed EO 13665 on April 8, 2014, he instructed OFCCP to issue a proposed rule prohibiting federal contractors from discharging or discriminating against employees or applicants who inquire about, discuss, or disclose their own compensation or compensation of other employees and applicants.  In a Fact Sheet on the Proposed Rule, OFCCP stated that the purpose of the Proposed Rule is to narrow the pay gap disadvantaging women and minorities by allowing them to discuss their pay and know if they are “being underpaid compared to [their] peers.”  OFCCP also believes the Proposed Rule would “reduc[e] pay discrimination and ensur[e] that qualified and productive employees receive fair compensation”, by enabling them to discuss their pay without fear of adverse action.

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Filed under Compensation, Department of Labor, Executive Order, OFCCP

OFCCP Releases Proposal Requiring Contractors to Disclose Compensation Data Annually

On August 6, 2014, the Office of Federal Contract Compliance Programs (“OFCCP”) released a Notice of Proposed Rulemaking requiring federal contractors and subcontractors with 100 or more employees to submit an annual equal pay report. This compensation data tool was published in response to President Obama’s April 8, 2014 Presidential Memorandum calling for proposed regulations to be published within 120 days.

The equal pay report will have a significant impact on federal contractors. According to OFCCP, the equal pay report will “enable OFCCP to direct its enforcement resources toward federal contractors whose summary data suggests potential pay violations, while reducing the likelihood of reviewing companies that are less likely to be out of compliance.” The proposed rule was officially published in the Federal Register on August 8, 2014. There is a 90-day public comment period with comments due by November 6, 2014.

Who Must File

The proposed rule applies to prime contractors and first tier subcontractors (and construction subcontractors of any tier) who are required to file EEO-1 Reports, have more than 100 employees, and have a federal contract, subcontract, or purchase order amounting to $50,000 or more lasting for at least 30 days (including modifications).

OFCCP is also considering covering postsecondary academic institutions that file the IPEDS report with the Department of Education.

Requirements of Equal Pay Report

The NPRM contemplates requiring covered federal contractors to submit an equal pay report that includes the following information:

  • Total number of workers within each EEO-1 job category by race/ethnicity and sex;
  • Total W-2 wages for all workers in each EEO-1 job category broken down by race/ethnicity and gender; and
  • Total hours worked for all employees in each EEO-1 category by race/ethnicity and gender.

No individual employee pay data will be required.

Reporting Method

OFCCP plans to design a web-based portal for covered contractors to report and maintain compensation information. OFCCP indicates that the webportal would be protected by applicable government IT security standards where contractors key in their data electronically or upload their forms into the system using the standard formats provided by OFCCP.

Data May be Basis for Audit Not Sanctions

Data from the proposed equal pay report would not in itself result in any sanction or adverse action against the contractor for compensation discrimination, according to OFCCP. However, OFCCP will use the information to prioritize contractors for compliance evaluations. If OFCCP selects a contractor for a compliance evaluation, that review would cover compensation data beyond what is in the contractor’s equal pay report and would involve a more specific and detailed data request that are typical in an OFCCP compliance evaluation.

Aggregate Data

OFCCP is also considering publishing aggregate information based on pay data collected from the equal pay report, but the data will not be specific to any particular contractor. The data could include ranges or averages by industry, labor market, or other groupings.

Effective Date/Comments

OFCCP is proposing an annual reporting window of January 1 to March 31. The data in this report would be based on W-2 earnings for the prior calendar year (Jan. 1- Dec 31) for all employees included in the contractor’s EEO-1 report for that year, which will generally align with the time period covered under a contractor’s W-2 filings.

Implications

The practice of OFCCP using the equal pay report to target its enforcement efforts could potentially eliminate OFCCP’s current random audit selection process and replace it with a targeted selection process. Despite the potential constitutional concerns, contractors should strongly consider conducting proactive pay equity analyses now, so that any areas of concern can be addressed before data is reported to OFCCP. This should include a total compensation analysis since contractors will need to report total compensation (i.e., all wages contained in the Form W-2) rather than just base salary.

Contractors should also be wary of potential confidentiality issues. Although OFCCP attempted to allay contractors’ confidentiality fears, the data, much like EEO-1 reports, could be turned over to private plaintiff’s attorneys for use in civil litigation. OFCCP believes that the Freedom of Information Act (“FOIA”) would exempt the disclosure of contractor data if it can be shown that (1) the contractor is still in business (2) the data is confidential and sensitive, and (3) the release of data would subject the contractor to commercial harm. For now, it is unclear whether these exemptions would actually shield contractors’ pay data in all cases.

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Filed under Compensation, Department of Labor, OFCCP

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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Filed under Affirmative Action Plan (AAP), Disability Discrimination and Accommodation, OFCCP, Veterans