OFCCP Update: The GAO Report, Pay Transparency, Executive … · 2018-01-22 · OFCCP Current Focus Areas Fewer but more thorough audits Continued focus on hiring and steering Females

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OFCCP Update: The GAO Report, Pay Transparency,Executive Order Requirements, and More

Presented by: Leigh M. Nason

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Scope and Usage of Materials The information in this presentation is provided for

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This presentation is not intended to provide legaladvice.

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GAO Report Is Critical of OFCCP Issued September 22 after a long investigation of OFCCP Six recommendations

OFCCP should change its contractor scheduling process toensure it focuses on noncompliant contractors

Develop process to monitor AAPs on regular basis Make changes to geographically-based scheduling process Provide better training to new and existing staff Identify options for improving outreach and compliance

assistance to federal contractors and workers Assess current contractor guidance for possible improvement

What does this mean for contractors and subcontractors?



OFCCP Current Focus Areas Fewer but more thorough audits Continued focus on hiring and steering

Females AND males Minorities AND nonminorities

National office direction to make systemic compensationcases

Much interest in enterprise-wide settlements National office desire to litigate

Denial of access Hiring and compensation Disability



Trump Administration Executive Orders Now and (Perhaps) Later

1 new regulation = 2 rescinded regulations Could affect EEO-1 pay data collection

LGBTQ rights vs transgender rights

Federal Hiring Freeze

60-Day Regulatory Freeze (e.g., overtime rule)

Cabinet and Supreme Court Neil Gorsuch nomination to SCOTUS Alexander Acosta nomination as Secretary of Labor

If confirmed, will pick OFCCP Director



Pay Equity Title VII of the Civil Rights Act (“discrete acts”) Ledbetter Fair Pay Act (“pay decisions”) Equal Pay Act (“equal work”) Paycheck Fairness Act (never passed) Executive Orders (for federal contractors only)

Pay Transparency Fair Pay and Safe Workplaces (almost dead)

EEO-1 Pay Data Collection State laws



Pay Equity- Risk Factors for Claims Lack of meaningful standards, guidelines, or guidance Lack of management training Exercise of discretion Subjective decision-making Failure to document pay decisions and bonuses Failure to communicate criteria and basis for pay decisions

and bonuses Favoritism – others are better paid, get more overtime,

preferential shifts, etc.



Pay Equity – Prevention andProtection Written policies for pay increases and bonuses Guidelines based on objective, quantifiable factors Limit subjectivity with objective factors Document pay decisions Assess performance evaluation process Train decision-makers Periodic pay analyses (under privilege)



Pay Transparency – Executive Order 13665

Part of Fair Pay and Safe Workplaces executive order,most of which has been enjoined

Pay transparency provision applies only to new oramended contracts of $500,000+ after January 1,2017.

Trump could rescind this at any time



Pay Transparency – Executive Order 13665

Requires that covered contractors ensure that wage statements and pay stubs contain the required

information about gross pay, rate of pay, itemized additions to anddeductions from gross pay, total hours of worked, and overtimehours worked;

ensure that employees who are exempt from overtimerequirements receive the required exemption notices prior to thetime they perform work on a covered contract and/or in the firstwage statement received for work on the contract; and

identify independent contractors who will be working on coveredcontracts and ensuring that each is properly notified of his or herbeing classified as an independent contractor on the contract atissue.



Pay Transparency – OFCCP Rule Effective January 11, 2016 Prohibits discrimination against those “who inquire about,

discuss, or disclose their own compensation or thecompensation of other employees or applicants”

Defenses – legitimate workplace rules & essential functionof employee’s job

Contractors must update EEO clauses & employeemanuals and handbooks

Applicants and employees can file OFCCP complaints toaddress violations

Best practice tip – add to HR and manager training



New EEO-1 Reporting Obligations March 2018 filing deadline (maybe?)

Number of Employees By gender and race/ethnicity for 10 EEO-1 categories

Summary Pay Data (new) 12 pay bands (<$19,239 $208,000+) using Box 1 of W-2

Aggregate hours worked Data (new) Proxy or actual hours worked

Dangers of the New Data Collection Tool EEOC will “improve investigations of possible pay

discrimination” Broad EEO-1 categories, pay bands, misleading information

in W-2 data, and assumptions of hours worked



New EEO-1 Reporting Obligations This is most likely going away

But if you feel that you must do something NOW Assess existing HRIS and payroll capabilities Identify or develop policies that explain how employees earn

overtime, bonuses, commissions, and other components ofW-2 Box 1 earnings

Examine appropriateness of EEO-1 category assignments Determine how to report work hours for exempt employees



Veterans and Disability Outreach:OFCCP and ODEP Resources Section 503 Checklist “Disability Inclusion Starts With You” Video Accommodation Pocket Card VEVRAA Infographic TalentWorks Veterans.gov

Note that veterans’ hiring benchmark moved down to6.9% in March 2016.



OFCCP Final Rule on Sex Discrimination Final Rule issued June 14, 2016, effective August 15, 2016 Substantially revises previous “Sex Discrimination Guidelines” with

changes that are related to a range of sex discrimination issues Addresses these sex discrimination issues:

“Discriminatory compensation” Pregnancy discrimination, including providing reasonable

accommodations to pregnant employees Sex-based stereotyping Sexual harassment Discrimination in fringe benefits Discrimination based on gender, gender identity, or transgender

status



Web Surfing a la OFCCP https://www.dol.gov/ofccp/ https://www.dol.gov/ofccp/cml/index.htm https://www.dol.gov/ofccp/foia/foiareadingroom/ https://www.dol.gov/newsroom/releases/agency/ofccp https://www.fpds.gov/fpdsng_cms/index.php/en/ https://www.usaspending.gov/Pages/Default.aspx https://enforcedata.dol.gov/views/search.php https://www.eeoc.gov/eeoc/statistics/employment/jobp

at-eeo1/



Executive Order 13706: Paid Sick Leave Final Rule issued September 29, 2016; effective January 1, 2017 Will require certain federal contractors to provide at least one hour of paid

leave for every 30 hours worked to employees working on a federalcontract

Applies to only “new” contracts resulting from solicitations on or afterJanuary 1, 2017

Applies to only certain contracts: Procurement contracts for construction covered by the Davis-Bacon

Act Contracts for services covered by the Service Contract Act (SCA) Contracts for concessions, including concessions contracts excluded

from coverage under the SCA Contracts in connection with federal property or lands and related to

offering services for federal employees, their dependents, or thegeneral public



Executive Order 13706: Paid Sick Leave Covered Employees

Direct employees Indirect employees Employees covered by a collective bargaining agreement

Methods for Providing Leave Accrual Method Front-Load Method

What triggers paid sick leave? Physical or mental illness, injury, or medical condition of the employee To obtain diagnosis, care, or preventive care from a health care provider To care for a child, parent, spouse, domestic partner and some others who

has a medical condition or needs diagnosis For absences related to domestic violence, sexual assault, or staking in

certain circumstances



Big Data Refers to the collection and analysis of digital history created when people

shop, surf the internet, etc. and includes tests and measurements fordocumenting aptitudes, behaviors and competencies

Types of big data in practice: Using algorithms to judge facial expressions of candidates during

interviews so that employers can choose the “best fit” Mining company data to identify applicants that mirror a company’s best

applicants EEOC: testimony heard on October 13 on big data’s increasing role in

recruitment, hiring, and other employment decisions Risk of disparate impact claims: when facially-neutral policy (or algorithm)

adversely affects protected group; if this happens, employer must showbusiness necessity or conduct (ongoing) validity study

Privacy concerns from workplace monitoring and wearable tracking devices Indemnification from vendor is key



Other Developments Revised FAAP Directive

Documentation of a qualifying federal contract no longerrequired

Contractors are now required to provide information relatedonly to subsidiaries that will be included in the FAAP, ratherthan all subsidiaries as previously required.

OFCCP may require a meeting to determine FAAP requestappropriateness

Contractors only required to provide information on relatedsubsidiaries to be included in FAAP, not all subsidiaries

Guarantee of at least one compliance evaluation duringFAAP agreement.



Other Developments Joint Employers – Who to Include in the AAP?

“Joint employment”: when a person is employed by two or moreentities such that the employers are responsible – individually andjointly – to the employee for compliance with a law or regulation

Independent contractors, interns, co-ops, temporary workers Expansion of Mega-Construction Project Program

Qualified to participate, if Receive federal funds or federal financial assistance Value of $25 million or more Last at least one year

No change to construction regulations



Takeaways GAO Report is already driving change at OFCCP

Expect less flexibility from the agency on extensions of time, delayed AAPsubmission in audits, etc.

We recommend preparing annual AAPs, well … annually Lots of ways to organize AAPs but every employee must be included in

“an” AAP Be careful of privilege concerns for compensation analyses and disparity

analyses EEO-1s will drive audits for the immediate future; prepare them strategically! Fewer audits, but more thorough and time-consuming

Know what you are submitting to OFCCP and understand in advance whatagency will find when it reviews data

Executive Orders can be burdensome; review new contracts to understandobligations and exemptions

Pay, pay, pay – both federal and state. Be proactive here!


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OFCCP Update: The GAO Report, Pay Transparency, Executive … · 2018-01-22 · OFCCP Current Focus Areas Fewer but more thorough audits Continued focus on hiring and steering Females