The Institute for Workplace Equality continues outreach to OFCCP
The Institute submits additional recommendations to OFCCP for FY2018
In January, The Institute submitted a white paper to the Trump Administration, “Charting the Course for OFCCP for 2017 and Beyond”. In response to Interim Director Tom Dowd’s call to contractors to provide the OFCCP with recommendations, The Institute supplemented its earlier white paper by submitting the following recommendations to the OFCCP:
1.) JURISDICTIONAL THRESHOLD – Increase threshold coverage for EO11246 to $250,000 and 250 employees to have a written affirmative action plan.
2.) CERTIFICATION – Simple certification program consistent with the requirements of §60-2.35. The certification would require that contractors, on an annual basis, certify on OFCCP’s website that they have developed affirmative action plans consistent with the requirements of EO 11246, Section 503 and VEVRAA. This will allow OFCCP to build a database of contractors and then focus most of its audit resources on those contractors that did not certify.
3.) AUDIT PROTOCOL – Rescind the Active Case Management (ACE) enforcement protocol and replace it with a revised Active Case Management (ACM) enforcement protocol used during earlier presidential administrations. The new ACM will allow compliance officers to quickly review affirmative action plans and close an audit within 30 days of receipt if there are no apparent issues. This will allow OFCCP to do more with less.
4.) COMPENSATION – Rescind Directive 307 and replace it with a new directive similar to the 2006 Systemic Discrimination Compensation Standards. In addition, OFCCP would implement a voluntary “safe harbor” provision, similar to safe harbors included in recently enacted equal pay laws by Massachusetts, Oregon and Puerto Rico. Here is how that could work:
Upon submission of the desk audit, the contractor would notify OFCCP that an annual analysis consistent with the new Compensation Standards has been conducted.
OFCCP would still collect Item 19 data and conduct an analysis. Contractors have the option of providing OFCCP with SSEGs as a field in the submitted data. If a contractor submits the SSEGs, OFCCP will evaluate. If the SSEGs are reasonably developed, OFCCP will rely on the submitted SSEGs as its unit of analysis.
If OFCCP identifies a disparity, it will then notify the contractor of the identified groups for further inquiry.
The contractor has the option to present its regression analyses just for the groups under inquiry. If the contractor conducted the self-critical analysis consistent with the Standards, OFCCP will accept the contractor’s proactive analysis.
Even if OFCCP rejects the proactive analysis as unreasonable, but the contractor has made adjustments based on its models, OFCCP will take that into consideration as a mitigating factor.
The Institute receives response to questions on VETS—4212 Report from DOL
During discussions with various groups about the revised EEO-1 Report, The Institute Co-Chairs concluded that no one had discussed the impact the changed filing date for EEO-1 Reporting would impact the VETS-4212 Report. So The Institute sent a letter to Secretary Acosta asking whether DOL would consider moving the VETS-4212 Report filing date from September 30 to March 30 to correspond with the new EEO-1 Report filing date. The letter also asked DOL to provide clarity on whether covered contractors would be able to use data for their revised EEO-1 Report to file their VETS-4212 Report, as they had in the past.
On Wednesday, July 26, The Institute received a response from DOL. The response from the Deputy Assistant Secretary of VETS says that as to the data collection issue, beginning in 2018 contractors can use the same calendar year data for the VETS-4212 Report as that which is used for the EEO-1 Report. However, DOL states that the reporting period, which is specified in the VETS regulations, cannot be changed without notice and comment. So while the 2018 reporting periods for VETS-4212 and EEO-1 Report are September and March respectfully, contractors can use the same data for both. However, they cannot file the 4212 Report until August 1 at the earliest.
Attached to this email are copies of the letter from The Institute and DOL’s response.
Highlights from the 2017 National ILG Conference
OFCCP Interim Director Dowd Reaches out to contractors
As opening speaker on Day 1 of the National ILG Conference, OFCCP Interim Director Tom Dowd spent the majority of his address emphasizing his vision for the agency to work harder on compliance assistance and communications with the contractor community. For the first time in ILG conference history, Dowd asked all of the OFCCP Regional Directors to attend the conference so they could hear from the contractor community directly.
Transparency and direct communications with contractors were two big themes of Director Dowd’s speech which fed into his larger goal for the agency – to improve its relationship with contractors. He shared several ideas he has for the agency, including a training program contractors could choose to undergo and then could “earn” a moratorium from compliance reviews for 2-3 years if they successfully completed the training program. Another is the idea to bring back public acknowledgement for contractors that demonstrate commitment to EEO, as in the past with the Exemplary Voluntary Efforts (EVE) awards. Throughout his speech, Dowd reaffirmed that a “vast majority’ of contractors – approximately 98% – are in compliance.
In closing, Interim Director Dowd emphasized his desire to use the conference as a way for OFCCP and the contractor community to interact – asking specifically for contractor suggestions and comments on creative and innovative ways for the two to work together.
In an important development that emphasizes Director Dowd’s desire for greater engagement with contractors, Dowd recently informed The Institute he would speak at its November Compliance Conference in Atlanta on November 15—16.
Acting Chair Lipnic expects decision on EEO-1 Report by Labor Day, stands by EEOC’s position on sexual orientation
At last year’s conference, Commission Lipnic shared her thoughts about the role of EEOC, its goals and her personal thoughts on the EEO-1 pay data reporting tool. This year now Acting Chair Lipnic began by focusing on ageism in the workplace in the 50th year of the Age Discrimination in Employment Act (ADEA).
However, she recognized the “most important thing” conference attendees wanted to talk about was the EEO-1 pay data reporting. Lipnic acknowledged that “time is of the essence” and employers need to know soon is what will be done with the pay and work hours components of the report so they can start making investments and system changes necessary to comply. She said that in response to a petition by the U.S Chamber of Commerce, the OMB is re-evaluating the burden estimate associated with the revised EEO-1 report. In connection with its review, Acting Chair Lipnic shared she has written to the newly appointed head of the Office of Information and Regulatory Affairs (OIRA), the office within the OMB tasked with review of the report, pointing out the impeding March 2018 reporting deadline and requesting OIRA have a response before the Labor Day holiday. She believes the burdensome pay and work hours reporting requirements are a “poster-child” for the kind of regulation the President campaigned against. She further shared that she believes it is a “false choice” that if you are “not in favor of this [regulation] that you are not in favor of equal pay.”
Speculating on the topic of the proposed merger between EEOC and OFCCP, Lipnic said she did not think it would happen.
In response to a question asked of her about the DOJ’s decision to oppose the EEOC’s position that Title VII covers sexual orientation, Acting Chair Lipnic said that EEOC’s position on the subject was “an approved and voted-on position.” She went on to say that discrimination on the basis of sexual orientation has been “pretty horrendous and blatant” and that as a result she was not “interested in seeing EEOC walk away from any of these people.”
Recognizing that the Commission is operating in a “deeply divided country where so many people feel left out,” and that this is a “critical time” for the country and EEOC, Acting Chair Lipnic assured the audience at the conclusion of her address that EEOC’s core mission and core values remain.
Although Chair Lipnic did not mention it, President Trump announced on August 2nd that he has nominated Daniel M. Gade as a commissioner to EEOC for a term expiring July 1, 2021. Gade, an Iraqi war veteran, served in the George W. Bush Administration.
Co-Chairs spoke on compensation at National ILG
Mickey Silberman closed the first day of the National ILG with a general session entitled “Pay Equity Keeps Getting More ‘Comp’licated’ ” while David Cohen and David Fortney discussed the “EEO-1 and State Fair Pay Laws and Shareholder Equity Studies, Oh My!” on the second day of the conference. In addition, all the regional directors, the Interim Director and the attorney in the Solicitor of Labor’s Office responsible for OFCCP attended David Cohen’s presentation on FY2017 OFCCP enforcement data.
Federal contractors’ obligations to provide data to OFCCP after Google
In a significant ruling addressing what additional information contractors must provide following the initial submission to an OFCCP desk audit, a U.S. Department of Labor (DOL) administrative law judge (ALJ) ruled that there are significant limits on what OFCCP can demand. ALJ Steven B. Berlin issued his decision in OFCCP v. Google addressing OFCCP’s authority to collect additional data and information during a compliance evaluation on July 14, 2017.
In response to the initial scheduling letter, Google provided OFCCP its “snapshot” of employees as of September 1, 2015, which included all the compensation data required by Item 19. Subsequently, OFCCP asked Google to supplement the snapshot with extensive information about the compensation and hiring programs and records and related data, and Google complied. Google also produced employees’ IDs, country of citizenship, secondary country of citizenship, visas, and place of birth. The OFCCP then demanded that Google provide for each employee employed at its headquarters extensive additional data for a second year as well as complete salary history covering multiple years and personal contact information for up to 25,000 employees. When Google refused to provide the data, the OFCCP filed this action alleging the company failed to provide it with access.
The ALJ’s 40-page decision concluded that OFCCP didn’t understand and has “not taken sufficient steps to learn” about Google’s workforce practices, that it was motivated by “an animus that is difficult to understand,” and that a key witness from OFCCP was “evasive” on the witness stand. The ALJ further found that OFCCP’s public attacks on Google’s work practices were based on “little more than speculation,” that it had a reckless disregard for Google employees’ privacy, and that its overly broad data requests comprised a “willy nilly search everywhere and anywhere.” And all of that while noting that the OFCCP was auditing a company that had been “cooperative.”
The ALJ significantly limited the breadth of OFCCP’s requests and ruled that Google must provide OFCCP with the September 1, 2014, snapshot data required by Item 19. In addition, he determined Google should include in the snapshot employees’ year of birth as well as all of the additional data requested other than data related to starting salary. The ruling also applied a low threshold for the OFCCP to justify its expanded requests for contractor data and did not require the OFCCP to disclose its “indicators” or justifications.
Although the ALJ rejected OFCCP’s demand for personal contact information for more than 25,000 employees, he held that Google must provide personal data for 5,000 employees despite his stated concerns about OFCCP’s ability to protect information. For the employees selected by OFCCP from the two “snapshots,” Google must provide the agency with the employees’ names and their personal address, telephone number, and e-mail address to the extent it has such information. OFCCP can subsequently request the same personal information for an additional 3,000 employees.
The ALJ rejected OFCCP’s request for complete salary and job histories of Google employees—e.g., for the entire period of employment for each employee— but he stated that the agency could renew its request for the additional data if it can show that its request is reasonable. The ALJ also required that OFCCP engage with Google in “meaningful, good-faith conciliation to resolve any dispute, including by showing why the information sought is reasonable, relevant, focused, and not unduly burdensome.”
Based on this decision, contractors may have limited ability to refuse to provide OFCCP with data for a two-year period before the desk audit letter that the agency claims is relevant unless the contractor can show the data is unreasonable, irrelevant, unfocused, or unduly burdensome and that OFCCP is refusing to conciliate on the data requested.
House Appropriations Committee proposes to ban EEOC from implementing new EEO-1 pay data and work hours data reporting
In the budget approved by the House Appropriations Committee, which includes the budget for the EEOC, the Commission is barred from using any funding to implement the new EEO-1 pay data and work hours reporting. The Committee proposal prohibits funding from being used “to implement a new EEOC requirement making businesses report certain demographic information of employees.”
U.S. DOL Wage and Hour Division issues clarifying memo on Sick Pay Executive Order and SCA
The DOL’s Wage and Hour Division issued a ruling that contractors providing paid leave in compliance with the Obama Executive Order on paid sick leave can reduce other benefits offered to employees under the Service Contract Act (SCA). The memo sent to government agencies was an attempt to respond to employer complaints about the confusion caused by the Executive Order which added a new benefit over and above the health and welfare benefit provided by SCA. While the memo is an attempt to take away the added benefit, it is more likely to add confusion to an already complex rule.
Aramark settles sex bias claim for nearly $200K
Aramark Uniform Services will pay $1,903.68 to resolve allegations of placement discrimination against female employees and $194,255 to resolve hiring allegations against male applicants at its Evansville, Indiana, facility. A compliance review by OFCCP found that the contractor discriminated against 41 qualified female employees who were placed into lower-paying production positions and as a result subsequently discriminated against 246 qualified males who were denied employment opportunities into the lower-paying production positions within the Operatives Job Group. Aramark denies those claims but has agreed to resolve the issues through a conciliation agreement. Under the agreement, Aramark will also extend 28 job opportunities and revise its placement and selection procedures to ensure that these violations do not recur.
No OFCCP regulations in first Trump Semiannual Regulatory Agenda
The first Semiannual Regulatory Agenda published by the Office of Management and Budget (OMB) did not include any OFCCP regulations.
U.S. DOL issued RFI on overtime rules
On July 26, 2017 the DOL published a Request for Information (RFI) in the Federal Register seeking public comments about the 2016 revisions to the FLSA white-collar overtime exemptions.
By way of background, a Texas federal court issued a nationwide injunction last fall blocking the Obama-era revisions from taking effect. Employers balked at the implementing final rule, which would have doubled the required salary for an employee to qualify as exempt and called for the salary threshold to automatically update every three years.
The RFI seeks public feedback on every facet of the 2016 revisions: the salary-level test, the duties test, the effect of bonuses and incentives on the salary test, the salary test for highly compensated employees, and automatic updating. The RFI asks 11 expansive questions addressing a wide range of practical and philosophical matters, including:
What is the appropriate basis for setting the salary threshold? Is it enough to simply update the current levels for inflation?
Should the standard duties test be changed?
Should the executive, administrative, and professional exemptions be based on different salary thresholds?
Did they raise salaries to keep employees exempt?
Did they alter working hours or rates or pay?
Did they convert salaried employees to hourly?
Should salary thresholds automatically update? What about during difficult economic periods?
Perhaps the most striking part of the RFI is how foundational its questions are—they speak to the very purpose of the FLSA and the nature of the white-collar exemptions. While there is no question that the DOL will overhaul the 2016 revisions, the changes may be far greater than previously expected.
The deadline to submit comments is September 25, 2017.
DOL announces return of opinion letters
On June 27, 2017, the U.S. DOL announced that it would reinstate the issuance of opinion letters (i.e., official, written opinions) by the DOL’s Wage and Hour Division about how a particular law applies in specific circumstances presented by an employer, employee, or other entity requesting the opinion. According to the press release, opinion letters “were a division practice for more than 70 years until being stopped and replaced by general guidance in 2010.” This guidance came in the form of broad “administrator interpretations” under the Obama administration—two of which were withdrawn last month.
Employers enthusiastically welcome the return of opinion letters, which provide practical guidance for compliance and thereby allow employers to avoid enforcement actions. According to Secretary of Labor Alexander Acosta, “Reinstating opinion letters will benefit employees and employers as they provide a means by which both can develop a clearer understanding of the Fair Labor Standards Act [FLSA] and other statutes.”
Importantly, opinion letters can supply the basis for a good-faith defense against FLSA claims, both for the original requestor and those in similar situations. As such, critics allege that opinion letters are essentially “get out of jail free” cards for employers that face minimum wage or overtime claims.
The Wage and Hour Division also established a website where employers and employees can submit requests for opinion letters. Requests should include the specific statute or regulation in question and a description of the relevant facts and circumstances.
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Vol. 4, No. 8, August 2017
2017 Fall Compliance Conference in Atlanta, GA
Wed., November 15 – Thurs., November 16, 2017
Don’t miss this opportunity to hear from our Guest Speaker, OFCCP Interim Director Thomas M. Dowd.
General Cost: $995 (early bird discount prior to October 5th – $895)
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EEO-1 Component 2
Wed., September 13, 2017
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Annual Enforcement Update
Wed., October 11, 2017
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Year-End Review and What to Expect in 2018
Tues., December 12, 2017
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