The second day of the 2016 ILG National Conference was filled with many informative sessions including those on implementing affirmative action plans, diversity initiatives, steering, and everyone’s favorite topic – pay.

The day opened with an address from EEOC Commissioner Victoria Lipnic. Commissioner Lipnic shared details of the Agency’s work studying harassment in the workplace. However, the most interesting portion of her presentation came in response to a question from the audience regarding the proposed changes to the Agency’s EEO-1 report to collect pay data.

Prefacing her response by making it clear she was not speaking on behalf of the Agency or the other Commissioners, Commissioner Lipnic shared that she voted against the EEO-1 pay data report proposal. Explaining that, as a policy matter, she felt

“it was past its prime and should be relegated to the heap of bad policy ideas once and for all,”

she emphasized her belief in equal pay for equal work and support of the Equal Pay Act.

Commissioner Lipnic acknowledged and agrees there is an unexplained wage gap but feels the focus should not be on collect pay data from employers that confirms the pay gap, but instead on addressing what have been identified as the predominant reasons for the gap, – females, generally, come in and out of the workforce and self-select into lower paying positions.

By way of example, Commissioner Lipnic shared the story of a small business owner who reported they received a quote from their vendor for $56,000 to modify their data collection system to address the obligations of the proposed changes to the EEO-1 form. She questioned whether that was a good use of the company’s funds or whether the funds would be more impactful if they were instead used to support on-site childcare or to hire another employee.  Her point, as she articulated it, is to question whether there is a different, better way, to address the pay gap than the proposed EEO-1 report.  In her words, pay is “complicated and individualized to each company.”

Following on this sentiment, the day wrapped up with a bookend presentation on pay delivered by Jackson Lewis’ own Mickey Silberman. Mickey started his pay presentation by pointing out

“there has never been an issue that has been more challenging or where contractors have as many forks in the road to choose from.”

His presentation put the “pieces of the puzzle together” of the various issues pay issues companies face today and shared tips and strategies to proactively prepare for the upcoming changes to the EEO-1 report, and other state laws and OFCCP compliance reviews.

If the content of the day is any indication of what’s on people minds, its clear people are thinking (and talking) about pay and will be for the foreseeable future.

Hello from the 2016 Industry Liaison Group National Conference in Charlotte, North Carolina!

Today marked the first day of this year’s annual conference being held in Charlotte, North Carolina.

The festivities kicked off this morning with opening remarks from Charlotte Mayor, Jennifer Roberts, before conference goers were addressed by OFCCP Director Patricia Shiu.

In her final speech to the NILG as Director of OFCCP, Director Shiu to a look back at the “profound changes” the Agency has seen over the past seven years, including “ground breaking” regulations for veterans and individuals with disabilities as well as LGBT regulations and the recently released updated Sex Discrimination rule.

Director Shiu also highlighted the Agency’s three fundamental principles to:

  1. Protect workers
  2. Promote diversity
  3. Enforce through impartial, thorough and comprehensive compliance reviews

Over the past seven years of the Obama administration, Director Shiu reported 28, 811 federal contractors had been reviewed, encompassing 12 million workers, resulting in $75 million in relief and 12,000 jobs.  Director Shiu acknowledged “most of the time we find contractors comply with the laws,” but “our job is not done until grieved individuals are made whole.”

In addition to highlighting regulatory changes, Director Shiu re-emphasized the Agency’s focus on pay discrimination noting pay is a “high priority for the Agency because it is a high priority of the Obama administration” and commented she doesn’t believe the emphasis on pay “is going to change anytime soon.”

Director Shiu expressed the Agency’s desire to conduct reviews in a “fair, neutral, efficient and expeditious manner” and reminded contractors that the obligation to review pay annually “is not new.”

In closing, Director Shiu shared her thoughts for the future and requested the NILG community “make a business case for change” by engaging senior leadership to set milestones and track progress involving not only veterans and individuals with disabilities but minorities and females as well.

Director Shiu in her final remarks noted that while there may only be a year left in the current administration, the agency “plans to build on successes of the past years”

Stayed tuned for more updates over the coming days as the conference continues.

EEOC has released, for publication tomorrow, an update with changes to its proposed EEO-1 pay data collection report.  Once published in the federal register, the public will have 30 days to submit comments.  This update takes into consideration public comments received on the Agency’s initially proposed pay data collection tool.  As it did previously, Jackson Lewis expects to submit comments in response to the update.

Quick Take-Aways

  • The revision proposes to change the EEO-1 filing deadline to March 31st of every year (instead of the current September 30th deadline) and proposes to change the workforce snapshot reported to a pay period between October 1st and December 31st of the reporting year (instead of the current July through September time period).
    • This change would take effect for EEO-1 filings in 2018.  Employers would be required to file the new pay data component along with the existing EEO-1 report by March 31, 2018, thereby giving employers a year and a half to comply with the new requirements.  No EEO-1 reports would be filed in 2017.  The reporting period for 2016, however, would remain unchanged – with reports being due by September 30, 2016
  • The EEOC continues to propose to have employers report W-2 earnings as the “measure of pay” for the new pay data collection report.  Specifically, employers will use Box 1 of the Form W-2 to complete their EEO-1 filings.
  • The EEOC likewise continues to propose that employers report “hours worked.”

Jackson Lewis has a dedicated team of experts as part of its Pay Equity Resource Group that will continue to evaluate the Agency’s proposed update and has provided additional insight and guidance.

 

 

On the eve of the Fourth of July holiday, and just in time for the start of the final quarter of the Agency’s fiscal year, OFCCP announced it had received approval of its revised Scheduling Letter and Itemized Listing.  The revised letter, which, when received by a contractor initiates an Agency compliance review, was initially proposed by the Agency in October 2015 and under review by the Office of Management and Budget (OMB) since April 2016

While not as sweeping as the changes that revamped the letter at the end of 2014 , this version of the letter contains a couple of modifications worth noting.  One of the most significant changes to the letter is the Agency’s statement around confidentiality.  In the previous version of the letter, OFCCP informed recipients that the Agency considered information provided in response to the letter “sensitive and confidential” and any disclosures will be made consistent with the Freedom of Information Act.  In the current version, OFCCP informs contractors 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 agreements.

This language is modified slightly from the Agency’s initial proposal which more broadly allowed OFCCP to share information with “other federal government agencies.”

The letter goes on to states that the Agency is “required to comply with the Freedom of Information Act, the Trade Secrets Act, the Privacy Act, and the 1987 Executive Order governing the disclosure of confidential commercial information.”

Additionally, the revised letter clarifies OFCCP’s request with respect to the Veterans Benchmark, requesting

[i]f you are six months or more into your current AAP year on the date you receive this listing, please also submit current year hiring data to measure against your benchmark.

The previous version simply requested “information that reflects current year results.”

The agency has posted FAQs addressing questions involving the renewed letter.

Today in the case of Fisher v. University of Texas, the U.S. Supreme Court today held, in a 4-3 decision, that the “race-conscious admissions program in use at the time of petitioner’s application is lawful under the Equal Protection Clause.”  This is the second time the Court has considered the issue but the first time it has issued a decisive decision.

In June 2013, the Court remanded the case to the Court of Appeals to ensure “exacting scrutiny” was applied to the University of Texas admissions program.  The Fifth Circuit Court of Appeal concluded the UT affirmative action program passed that muster and was narrowly-tailored to achieve a diverse student body.  Ms. Fischer appealed again claiming the Fifth Circuit had not applied the required level of scrutiny.

While this decision firmly supports such affirmative action programs, the Court’s opinion cautions:  “The Court’s affirmance of the University’s admissions policy today does not necessarily mean the University may rely on that same policy without refinement. It is the University’s ongoing obligation to engage in constant deliberation and continued reflection regarding its admission policies.”

In addition to OFCCP’s release this week of its updated Sex Discrimination Rule, to coincide with White House’s United State of Women Summit in Washington, D.C., the Equal Employment Opportunity Commission (EEOC) released three new resource documents dealing with equal pay and pregnancy discrimination.

The three documents released are:

The documents are not specific to federal contractors, but they nevertheless apply to many federal contractors. We should expect the documents to be referenced by enforcement officials at both the EEOC and OFCCP as these topics continue to be at the forefront of workplace discrimination law.

 

Today, OFCCP announced that, effective March 4, 2016, the annual hiring benchmark for veterans pursuant to VEVRAA regulation is 6.9%.  This is a slight decrease from last year’s 7.0% benchmark.

As part of the release OFCCP clarified that

“Contractors who adopted the previous year’s national benchmark of 7 percent after March 4, 2016, but prior to this announcement may keep their benchmark at 7 percent.”

The agency noted that going forward the effective date for the annual benchmark will match the date the Bureau of Labor Statistics publishes the data from which OFCCP calculates the benchmark,  This usually takes place in March every year.

As anticipated, OFCCP has released its new Sex Discrimination Rules – replacing the outdated Sex Discrimination Guidelines that have been in place since the 1970s.  The release coincides with the White House’s United State of Women Summit being held today in Washington D.C..

The new rule will go into effect on August 15, 2016 and addresses the issues of “sex-based barriers to equal employment and fair pay, including compensation discrimination, sexual harassment, hostile work environments, a lack of workplace accommodations for pregnant workers, and gender identity and family caregiving discrimination.”

OFCCP is holding a complimentary webinar on Thursday, June 16, 2016 2:00 pm Eastern, on the requirements of the new rule.

The Final Rule is just shy of 200 pages.  We are in the process of digging in and will be back soon with detailed analyses and insights.

The EEOC has announced an increase to the monetary fine for employers who fail to post the proper Title VII postings.  The penalty is now $525 per violation, a 150% increase from the previous $210 fine.  Pursuant to Title VII, the Americans with Disability Act and the Genetic Information Nondiscrimination Act (GINA), employers are required to post in conspicuous places Department issued postings “describing the applicable provisions of title VII, the ADA, and GINA.”  The Department of Labor’s EEO is the Law poster contains the required postings.

Increasingly, high-profile companies in the tech industry are feeling the pressure to publicly share employee pay information and address any existing “pay gaps.”  This has led to a number of recent press releases from Silicon Valley employers proclaiming “equal pay” within their organizations.

Most recently, in connection with Equal Pay Day, Facebook, Inc. and Microsoft Corp both publicly announced they pay male and female employees equally.  Microsoft went so far as to disclose its female employees earned 99.8 cents for every 1.00 dollar earned by men in the company and also shared data on pay equality for minority employees.

While other companies likely have, or soon will, feel the pressure for pay transparency, there are important considerations to take into account before doing so.  Some things to keep in mind include:

  • What type of analyses will the company rely on to substantiate such a pronouncement?
  • How will the analyses be conducted to protect them under privilege?
  • How will this information be utilized by the company, existing and former employees and other third-parties?

Importantly, if employers are going to make public statements about paying their employees “equally,” they first should conduct pay equity analyses to substantiate these claims and ensure the analyses are protected under privilege.  [Note: By “pay equity analyses,” we mean comparing employees to one another, not to market.  Many organizations conduct market analyses, but do not actually review pay equity for their employees within their organizations.]  However, with this increasing pressure on employers to make “equal pay” statements, many requests to analyze pay data come directly from the C-suite, so ensure you are aware of when this occurs and your organization is running these analyses properly and they are protected under privilege.