In its most recent required status report to the court, filed September 27, 2019, the EEOC reports:

[s]o long as the Court’s order is in effect stating that the collection will not be complete until it reaches what the Court has determined to be the target response rate, the EEOC will continue to accept Component 2 data for 2017 and 2018.

The Component 2 filing website has also been updated with the following message:

In a September 27, 2019 Status Report that was filed in the lawsuit discussing post-September 30th activities, the EEOC stated that so long as the Court’s order is in effect stating that the collection will not be complete until it reaches what the Court has determined to be the target response rate, the EEOC will continue to accept Component 2 data for 2017 and 2018. EEO-1 eligible employers should continue to submit and certify their Component 2 EEO-1 reports for 2017 and 2018 as soon as possible.

As an update to its previous report, the EEOC is reporting that as of September 25, 39.7% of eligible filers have completed submission of the Component 2 data.

As soon as additional information is known about how long EEOC expects to continue to collect data we will let you know.

 

In August, OFCCP issued a proposed new rule to clarify aspects of a religious exemption available to federal contractors.  According to OFCCP, the rule is intended to provide clarity regarding the scope and application of the existing religious exemption consistent with the evolving landscape of religious freedom- based legal developments, including Masterpiece Cakeshop, Ltd. v. Colo. Civil Rights Comm’n, 138 S. Ct. 1719, 1731 (2018), Trinity Lutheran Church of Columbia, Inc. v. Comer, 137 S. Ct. 2012, 2022 (2017), Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751, 2775 (2014), Hosanna-Tabor Evangelical Lutheran Church & Sch. v. EEOC, 565 U.S. 171, 196 (2012). OFCCP stated the holdings of these recent Supreme Court decisions

have reminded the federal government of its duty to protect religious exercise – and not to impede it.

During the recent public comment period, OFCCP received  more than 100,000 comments on the proposed rule, including comments from industry groups and the United States Senate Committee on Health, Education, Labor, and Pensions.  As might be expected, comments both support the additional religious protections and voice concerns regarding its appropriateness and certainty of application.  The most developed criticisms of OFCCP’s proposed new rule focus on the potential expansion of applicability and the proof standard required to show unlawful discrimination.

Who does the proposed rule cover?

Under the proposed rule, any contractor that is “organized for a religious purpose” (even if it is not the contractor’s only purpose), holds itself out to the public as carrying out a religious purpose (even if the employer only does so in response to an inquiry from OFCCP), and “exercises religion consistent with, and in furtherance of, a religious purpose” can claim the proposed religious exemption.  According to critics, this is a burdensome, fact intensive, and complicated legal analyses of areas of law with which judges often struggle.  Yet, OFCCP’s proposed rule would charge field personnel with such nuanced assessments.

Critics also point out that this test goes beyond the current Supreme Court precedent on the interplay between the (potentially competing) Constitutional rights of (1) free exercise of religion and (2) to be free from discrimination.  Once commentator suggested that OFCCP should delay any new rule on a religious exemption until the Supreme Court decides three cases this term that address whether sexual orientation and gender identity are protected classes under Title VII.

However, advocates cite to the many “critical services” provided by faith-based organizations, such as aid for the homeless and victims of abuse and praise the proposed rule’s efforts to level the playing field and increase participation in essential sectors of American life. Others point to freedom of religion as “America’s backbone,” and commend the commitment to allow employers to operate their businesses consistent with sincerely held religious tenets.  Still others simply “appreciate the clarity” of the exemption.

How would OFCCP establish unlawful discrimination?

Currently, any employment decision in which discrimination is “a motivating factor” is prohibited.  But under the new rule, OFCCP would have to establish that discrimination on a protected basis other than religion was the “but for” cause of the employment action.  According to critics, this distinction would make it substantially more difficult to establish that employment discrimination occurred and would enable employers claiming the exemption to use religion as a pretext for unlawful decisions.

What would the new rule protect?

Comments also requested additional clarity on the scope of the exemption.  The OFCCP expressed in the proposed rule’s executive summary that many faith-based organizations have apparently been reluctant to, or historically entirely refrained from, contracting with the federal government out of concern surrounding uncertainty of the scope of the existing exemption. As discussed above, the revised language is intended to capture employers well beyond houses of worship in an effort to encourage participation in their respective industries.

While much of the ire drawn by the proposed rule is the risk at which it places protection due to sexual orientation and gender identity at risk, its impact may not end there.  For example, the National Industry Liaison Group asks:

[W]ill it permit allegedly ‘illegal’ questions during an interview process and allow an employer to decline to hire a woman who has been divorced, had an abortion, or is living with another in an unmarried state?  In the normal operation of a business, will a male be promoted over a female because males in the organization refuse to be alone with the female for training and mentoring purposes, denying females developmental opportunities?  Simply stated, will ‘sincerely’ held religious beliefs overcome anti-discrimination protections afforded female employees?

*             *             *

The public is divided on the issue, and some serious questions remain.  The ball is back in OFCCP’s court to consider this swell of public feedback.  When it does, we’ll keep you posted.

Since the Government Accountability Office (GAO) issued its Recommendations to Strengthen the Office of Federal Contract Compliance Programs’ Oversight of Federal Contractors’ Nondiscrimination Compliance in July 2016, OFCCP has taken steps to implement its recommendations.  And now, the GAO has issued a progress report evaluating OFCCP’s actions toward the 2016 recommendations.

The GAO’s progress report provides insight into both OFCCP’s past and future actions that often occur outside of public view.  Looking backward, the GAO concluded that OFCCP has successfully implemented changes to address the following recommendations:

  1. Make changes to the current scheduling list distribution process so that it addresses changes in human capital and does not rely exclusively on geographic location.
  2. Review outreach and compliance assistance efforts and identify options for improving information provided to federal contractors and workers to enhance their understanding of nondiscrimination and affirmative action requirements to ensure equal employment opportunities for protected workers.
  3. Assess existing contractor guidance for clarity to ensure that contractors have information that helps them better understand their responsibilities regarding nondiscrimination and affirmative action requirements to ensure equal employment opportunities for protected workers

Yet, the GAO found that OFCCP fell short in meeting three other of its 2016 recommendations:

  1. Make changes to the contractor scheduling list development process so that compliance efforts focus on those contractors with the greatest risk of not following equal employment opportunities and affirmative action requirements.
  2. Develop a mechanism to monitor affirmative action plan from covered federal contractors on a regular basis. Such a mechanism could include electronically collected AAPs and contractor certification of annual updates.
  3. Provide timely and uniform training to new staff, as well as provide continued training opportunities to assist compliance officers in maintaining a level of competence to help ensure quality and consistency of evaluations across regions and district offices.

The report also includes additional guidance for OFCCP to continue its implementation of the 2016 recommendations.  For example, to continue to refine its selection methodology to reduce the impact of its prior methodology and to evaluate how the Voluntary Enterprise-wide Review Program (VERP) may impact the pool of contractors for selection.

But perhaps most surprising is the disclosure in the report that OFCCP is poised to issue a request that OMB approve that contractors submit their AAPs annually to OFCCP.  According to the GAO,

OFCCP has contracted with an information technology vendor to develop a web-based portal to allow contractors to upload their AAPs electronically for convenience, increased compliance, and for OFCCP review.

According to the report, the Agency intends to announce this technology by September 30, 2019.  The report also states

OFCCP has developed the necessary information collection request to obtain approval from OMB to collect all contractors’ AAPs annually. The agency anticipates that OMB approval will be timely to align with completion of the AAP portal.

The details of this are still unknown, but September 30 is fast approaching, as those of you with EEO-1 Component 2 filing obligations are well aware.  We will be sure to provide updates as we learn more.

As we previously reported , EEOC has filed notice asking for renewed approval to collect EEO-1 Component 1 race, gender and ethnicity workforce data for the next three years (2019, 2020 & 2021), but is not seeking renewed authority to collect Component 2 pay data and hours worked. To be clear, this filing does not impact the current obligation employers have to submit 2017 and 2018 pay data by September 30, 2019.

EEOC’s authorization to collect any EEO-1 data (Component 1 or Component 2) expires on September 30, 2019.  Thus, the Agency has submitted the current information request because it needs approval to continue to collect Component 1 data.  Confusingly, Judge Chutkan ordered in National Women’s Law Center, et al. v. Office of Management and Budget, et al., that EEOC’s authority to collect Component 2 pay data will expire no later than April 5, 2021.  This Order, however, is currently at the center of a legal appeal.  But for the court’s order, or in the event the court’s order is overturned on appeal, EEOC’s authority to collect Component 2 data will likewise expire on September 30, 2019.

As a result of the two expiration dates, and the pending litigation, EEOC is asking the Office of Management and Budget (OMB) to separate approval of Component 1 data collection from Component 2 collection so it can continue to collect Component 1 data while it takes time to assess the utility and burden associated with the Component 2 collection.

According to its notice, EEOC has serious doubts about the previously reported burden on employers to collect and file Component 2 data.  It seems EEOC has discovered the previous burden estimate was

an extremely low estimate of the burden on employers. . . EEOC now concludes the burden estimate associated with the EEO-1 is higher than it has previously estimated.

Because it is concerned the actual burden may outweigh the value of the data, the Agency has elected to pause so it can “balance the utility of the data to its enforcement programs against the burden the data collection as structured imposes on the employers who must submit it.”

Therefore,

[t]he Commission now concludes that it should consider information from the ongoing Component 2 data collection before deciding whether to submit a pay data collection to OMB. At this point in time, the unproven utility to its enforcement program of the pay data as defined in the 2016 Component 2 is far outweighed by the burden imposed on employers that must comply with the reporting obligation. Therefore, the EEOC is not seeking to renew Component 2 of the EEO-1.

This admission does not, however, mean EEOC has necessarily made any decision regarding whether it will collect some form of Component 2 data going forward.  However, it appears EEOC will not seek approval to collect any additional Component 2 pay data in the near future, either pursuant to its existing authority or pursuant to approval following a new request for OMB approval.  Rather, EEOC’s notice suggests it will take a step back, analyze the 2017 and 2018 to determine if and how it might efficiently collect valuable employer pay data without unduly burdening employers, and then move forward from there.  How long it may take EEOC to sort this all out is, at this point, anyone’s guess.

Please check back for updates as the saga of EEO-1 Component 2 reporting continues at EEOC, OMB and the courts.

As previously reported, EEOC is expected to publish tomorrow a Notice of Information Collection regarding EEO-1 Reporting.  An advance copy of the notice reports that

the EEOC is not seeking to renew Component 2 of the EEO-1.

Instead, the Commission has concluded it should consider information from the current Component 2 collection before deciding whether to submit a renewed pay data collection to OMB for approval.  The Agency feels

at this point in time, the unproven utility to its enforcement program of the pay data as defined 2016 Component 2 is far outweighed by the burden imposed on employers that must comply with the reporting obligation.

While the EEOC has decided not to seek extension of Component 2 at this time, it does intend to continue to collect Component 1.

This is a developing story – we will be back soon with more details.

In its required status report, filed pursuant to Court Order, EEOC announced it is preparing a Notice of Information Collection – Employer Information Report (EEO-1) to seek authorization from the Office of Management and Budget (OMB) for the collection of pay data going forward.  As a reminder, OMB approval for the data collection expires September 30, 2019 – the same deadline imposed by the court for the current reporting period for the EEO-1 Component 2 data. Once published in the Federal Register, EEOC states “the public will be invited to submit comments to the Commission.”  Almost assuredly, the Notice will request employers submit information regarding the utility and burden associated with the data collection, as EEOC Commissioner Vicki Lipnic recently discussed.

EEOC also reported that approximately 13.4% of eligible filers have already submitted their pay data.  In a previously filed, interim report, EEOC suggested the filing threshold should be deemed complete, and the Court’s Order for collection of the data deemed satisfied, once EEOC received data from 72.7% of eligible filers.  According to EEOC, there are approximately 37,000 filers “who have neither contacted the NORC Component 2 Help Desk, registered for access to the online portal, or submitted data.”  The Agency reported it will begin attempting to contact these filers via phone.

As always, we will continue to monitor any new developments in this area and provide updates with any new information.

Avid readers have seen that OFCCP has been busy this summer.  In August alone, the Agency attended the 2019 ILG National Conference in Milwaukee, issued FAQs on student workers, proposed a new rule regarding religious exemptions, introduced a new Ombudsperson, opened a contractor assistance portal and issued multiple technical assistance guides.  But, OFCCP is not content merely coasting through the end of its fiscal year (on September 30).

Instead, OFCCP continues to issue additional guidance to contractors.  In a cleverly-titled “Back to School Update”, OFCCP unveiled new FAQs addressing preparation of AAPs that cover a campus environment.  The Agency noted common employers with campus environments include educational institutions, hospitals, and information technology companies, among others.  When an employer has multiple buildings or “work locations” in close proximity, there has often been an unresolved question – is it one establishment or many?

The Agency’s official position has been “[i]n appropriate circumstances, OFCCP may consider as an establishment as a single building or several facilities located at two or more sites when the facilities are in the same labor market or recruiting area.” But the recent FAQ’s provide additional guidance.

Specifically, OFCCP has clarified that employers may combine multiple buildings into a single establishment AAP, if the operations across those buildings are interconnected.

Similarly, contractors may conclude various buildings within a campus environment are operationally distinct and should be included in separate AAPs.   The FAQs provide a guideline of factors to assist contractors in assessing their situation.

This is not to be confused with the Agency’s Functional Affirmative Action Plan (FAAP) program which offers an alternative to establishment based affirmative action plan development.

These FAQs are new, so it may take some time to see them in action, but contractors with campus environments may want to evaluate if this new guidance provides a good affirmative action plan alternative for their organization.

Let us know if we can be of any assistance digesting how this guidance could be used in your AAP program.

As the Agency is ramping up its enforcement efforts on behalf of individuals with disabilities, OFCCP is offering another form of technical assistance to contractors.  On September 11, 2019 OFCCP will be hosting a Section 503 Focused Review webinar during with the agency will touch upon:

  • the scheduling process,
  • the focused review process,
  • common problem areas, and
  • best practices.

OFCCP will also open the up the event to questions.  Don’t worry, if you are unable to make it on September 11, OFCCP has said it will make a recording of the webinar available for review on the Section 503 Focused Review Landing Page.

In addition to providing technical assistance, OFCCP is also wanting to recognize contractors with “best practices” for Excellence in Disability Inclusion.  In an effort to allow more contractors to apply for the award, OFCCP has extended the application date to be considered for the Agency’s Excellence in Disability Inclusion Award to November 1, 2019.  In the Agency’s words

[t]ake advantage of this unique opportunity to have your business recognized for its commitment to supporting Americans with disabilities.

As scheduled, EEOC and NORC have now provided employers with a way batch upload their EEO-1 Component 2 pay data.  Instructions and details are provided on the More Info Page on the NORC EEO-1 Component 2 website.  Specifically, the following documents are currently available:

The file upload functionality is accessible after securely logging into the Component 2 EEO-1 Online Filing System via the LOGIN to File page.

Additionally, there are new FAQs available on the website, including questions and corresponding answers on topics such as PEO employers, spinoffs and reporting on non-binary gender employees.

Unlike the EEO-1 Component 1 report, the new FAQs state employers are allowed to report data for non-binary gender employees through a manual narrative input in the comment box on the Certification Page.

The FAQs are also now available in a downloadable pdf format for ease of future use and reference.

 

As previewed in the Spring regulatory agenda, the Office of Federal Compliance Contract Programs (OFCCP) has proposed a new rule to clarify aspects of a religious exemption available to federal contractors. In the proposed rule, the agency said it intends to address concerns from religious organizations that ambiguity in the exemption left them reluctant to participate in federal contracts.

The proposed rule was published August 15 in the Federal Register. OFCCP will accept public comments on the rule for 30 days, until September 16, 2019.

The rule would clarify the religious exemption in Executive Order 11246, which includes anti-discrimination obligations for federal contractors. The exemption allows religious organizations to prefer individuals of a particular religion, while still requiring adherence to other anti-discrimination provisions. The rule comes one year after OFCCP issued a Directive reminding its staff to tread lightly when dealing with religious contractors and “proceed in a manner neutral toward and tolerant of . . . religious beliefs.”

As proposed, the rule would clarify that:

  • The exemption covers “not just churches but employers that are organized for a religious purpose, hold themselves out to the public as carrying out a religious purpose, and engage in exercise of religion consistent with, and in furtherance of, a religious purpose.”
  • Religious employers can condition employment upon acceptance of, or adherence to, a religious tenet, provided that they do not discriminate based on other protected bases.
  • Define terms such as “Religion,” “Particular Religion,” and religion “As understood by the employer.”

The rule does not explicitly mention sexual orientation or LGBTQ protections. However, it does cite Masterpiece Cakeshop, the recent U.S. Supreme Court decision involving a business owner’s decision to deny service to gay customers based on the owner’s religious beliefs.  In a news release, OFCCP said it considered that case while drafting the rule, in addition to other Supreme Court cases, statutes, and executive orders.

Today’s proposed rule helps to ensure the civil rights of religious employers are protected,

said Patrick Pizzella, acting U.S. Secretary of Labor.

“As people of faith with deeply held religious beliefs are making decisions on whether to participate in federal contracting, they deserve clear understanding of their obligations and protections under the law.”

The proposed rule also comes at the same time it has been reported by Bloomberg Law that the Department of Justice and EEOC are seemingly taking differing positions on LGBTQ rights before the Supreme Court.

Jackson Lewis will continue to monitor developments related to the proposed rule.