The Department of Labor has released proposed guidance to assist with implementation of Executive Order 13673 – Fair Pay and Safe Workplaces.  The proposed guidance is expected to be published in the Federal Register tomorrow which will start a 60-day public comment period.

The Federal Acquisition Regulatory Council has likewise released proposed regulations implementing the Executive Order, which integrate the Department of Labor’s proposed guidance.  The proposed regulations will also be open to public comment for 60 days following publication tomorrow in the Federal Register.

The proposed guidance weighs in at a hefty 106 pages and the proposed Rule is approximately 130 pages.  We are working our way through them both and will provide details and insights soon.

With the release of the new veterans and individuals with disabilities regulations, as well as roll-out of the new scheduling letter and LGBT regulations, OFCCP accomplished a lot over the last year and it’s not done yet. The latter-half of 2015 and into 2016 looks to bring more regulatory changes. The following items remain on OFCCP’s Regulatory Agenda, including its latest projections for issuance of proposed or final regulations:

  • Breaking News: Fair Pay and Safe Workplaces: The regulatory agenda did not provide an update with respect to any proposed regulations implementing Executive Order 13673. However, we have learned that proposed regulations implementing the executive order is expected to be released this week.  We will provide an update as soon as they are available to the public.
  • Equal Pay Report: OFCCP’s latest regulatory agenda projects November 2015 for publication of these final rules.  More about the proposed report can be found here.
  • Sex Discrimination Proposed Rules: In January, OFCCP proposed binding regulations to replace the decades-old Sex Discrimination Guidelines. The comment period closed in April 2015 and OFCCP is projecting December 2015 for final rules.
  • Pay Transparency: OFCCP says August 2015 for final rules implementing employer obligations for more transparency around employee pay.  In addition to prohibiting discrimination/retaliation against applicants and employees who discuss pay, the proposed rules require:
    • Inclusion in employee handbooks of an anti-discrimination policy to be provided by OFCCP; and
    • Physical or electronic posting of the policy for applicants and employees.
  • Construction Contractor Affirmative Action Requirements: OFCCP has for years been preparing updated regulations governing affirmative action for federal construction contractors. OFCCP’s latest projection is to release the proposed rules or comment in November 2015.

As we learn of updates we’ll pass them along so check in often and stay up-to-date.

In an update to our post more than a year ago about the National Association of Manufactures’ legal challenge to the posting requirements under Executive Order 13496, a federal district court in Washington, D.C. has rejected NAM’s constitutional challenge to President Barack Obama’s 2010 Executive Order requiring certain federal contractors to post a “Notification of Employee Rights under Federal Labor Laws.”

For a more detailed discussion of this development, please check out the recently published article on our website.

This past March, Labor Secretary Thomas Perez issued a News Release announcing the overall unemployment rate for all veterans has dropped for the fourth consecutive year – this is great news.

In an effort to assist in the employment of veterans, covered federal contractors are required to set a protected veteran hiring benchmark as part of their affirmative action obligations. As we reported earlier this week, OFCCP recently announced a corresponding drop in the national veteran hiring benchmark to 7% from 7.2%. The benchmark is an estimate of veterans in the civilian workforce and serves as the annual target rate for covered veteran hires to which federal contractors should strive.

Veteran Preference Policies

The groundswell of support for veteran employment also raises the topic of veteran employment preferences. The federal government and most states have long mandated government employment preferences for veterans. When challenged, these programs have been upheld as permissible pursuant to Section 712 of Title VII of the Civil Rights Act of 1964 and not found to have violated non-discrimination laws. Similarly, as OFCCP noted in its comments regarding the new VEVRAA regulations, non-veterans have no “reverse-discrimination” claim under VEVRAA or Title VII for employment decisions based on veteran status.

Currently seventeen states have authorized private employers to utilize voluntary veteran preference policies – with three coming in the first several months of 2015 alone. The list of states authorizing voluntary private employer veteran preference policies include:

Arizona, Arkansas, Florida, Idaho, Iowa, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Montana, Nebraska, North Dakota, Oklahoma, Oregon, South Carolina, Virginia, Washington and Utah.

 While increase veteran employment is something we can all support, there is another side to this coin: the impact of veteran preferences on women. In its 1990 Policy Guidance on Veterans’ Preference Under Title VII, EEOC stakes out its position that veteran preferences have a significant adverse impact on women due to the historically low numbers of women in the military services. Therefore, EEOC states, preferences are typically justifiable only if authorized by federal, state or local laws as provided in Section 712 of Title VII. EEOC has not recently indicated a position on whether voluntary veteran preferences authorized by state law are covered by Section 712.

Consider Whether a Preference is Defensible

Consequently, private employers considering a veteran preference policy should also consider:

  •  Whether the state in which the employer operates has a veteran preference law for private employers. Such state laws likely protect voluntary veteran preference policies from Title VII attack. However, it remains to be seen what effect EEOC’s guidance may have and whether female plaintiffs may take issue under Title VII.
  • Without a state law , a veteran preference may not be permitted under Title VII, without a showing that it does not have an adverse impact on women.
  • Finally, some state veteran preference laws impose specific requirements on employer policies, such as:
    • The policy must be in writing;
    • Preferences must be applied uniformly to hires, promotions and reductions-in-force decisions; and
    • Preferences may only be extended to veterans who are qualified or “equally qualified” as compared to competing candidates.

EEOC warns in its Guidance that a voluntary veteran preference policy which is not implemented according to the state law authorizing it, or which is not otherwise consistently applied, may create an argument that the preference is a pretext for sex discrimination.

In summary, while veteran preference policies may be laudable and attractive to many private employers, such policies should be well-informed and implemented with care.

Utilizing 2014 Bureau of Labor Statistics (BLS) year-end data, OFCCP has revised the VEVRAA hiring benchmark to 7 percent – down from the current 7.2% mark. Pursuant to the revised veteran regulations, covered contractors and subcontracts must either adopt the national benchmark, or set their own using the proscribed five-factor method, for each establishment. While OFCCP has said failing to meet the hiring benchmark will not be deemed a violation, the mark should be used by contractors in the required assessment of the effectiveness of the contractor’s good faith outreach efforts.

The Annual National Benchmark, as well as data to be used by those calculating their own benchmark using the five-factor analysis, can be found at http://www.dol-esa.gov/errd/VEVRAA.jsp.

April 14, 2015 has been identified as National Equal Pay Day – the day which symbolizes how far into the year women must work to earn what men earned in the previous year.

President Obama has made fighting pay discrimination a top priority of his Civil Rights Agenda. He has recently taken several executive actions to further this agenda including:

  • Executive Order 13665 – Pay Transparency: Prohibiting discrimination/retaliation against applicants and employees, including employees who discuss pay.
  • Equal Pay Report: A report to be filed annually for employers reflecting company-wide compensation. OFCCP is in the process of evaluating the more than 8,000 comments received during the public comment period.

In addition, OFCCP has taken steps to ramp up its enforcement of pay discrimination:

  • Directive 307: effective February 2013 and outlines the procedures for reviewing contractor compensation systems and practices during a compliance evaluation
  • New Scheduling Letter and Itemized Listing: requires detailed employee-level compensation data to be provided at the outset of every OFCCP compliance review. The data required to be submitted includes:
    • Base
    • Bonus
    • Commissions
    • Overtime Earned
    • Merit Increases
    • Incentive Compensation
  • Proposed Sex Discrimination Regulations: revises obligations for contractors around pay for women, among other things.

What does all of this mean? The President and OFCCP are serious about addressing pay discrimination and are building programs and processes in furtherance of this goal.

The question is – what are you doing proactively to ensure your company is paying people fairly?

Stay tuned for an upcoming blog post where we will delve into the world of proactive pay analyses and what you can do to gain insight into your compensation systems.

Since introducing its new scheduling letter in late 2014, OFCCP has made many important changes to enforcement in audits.  From ramped up enforcement of the Agency’s VEVRAA and Section 503 regulations to new and very different ways to investigate pay systems for discrimination, the Agency has fundamentally changed how it conducts compliance reviews.  And it’s just beginning.  There are new proposed and final regulations regarding pay on the horizon.  Its critical employers understand the quickly changing “rules of the game.”

So, come join me at The OFCCP Institute’s Annual Conference April 29-30 in Washington, D.C. to learn about the Agency’s enforcement trends and network with other federal contractors who are working, just like you, to navigate the changed compliance landscape.  The Institute has the honor of welcoming Consuela A. Pinto, Counsel for Litigation and Regional Coordination, from the U.S. Department of Labor’s National Office of the Solicitor as a guest speaker during the conference.

For the conference agenda and to register, click here.  Hope you to see you there!

As a follow up to last week’s training on implementation of the new sexual orientation and gender identity non discrimination regulations, OFCCP will be holding an upcoming webinar to discuss how the Agency will be processing complaints under Executive Order 13672.

The public webinar will be held on April 8, 2015 ,and again April 9, 2015 , from 2:00 – 3:30 p.m. Eastern.

In light of this week’s Supreme Court decision in Young v. United Parcel Service addressing the issue of accommodations and pregnancy discrimination, OFCCP has extended the public comment period for the Agency’s Sex Discrimination Regulation Notice of Proposed Rulemaking.  The public comment period now closes April 14, 2015.

By extending the comment period by two weeks, the Agency seeks to give the public the opportunity to take into consideration, and comment on, the impact of the Court’s decision in Young on the Agency’s proposed rule on Discrimination on the Basis of Sex.