PRESS RELEASE – US DEPARTMENT OF LABOR ANNOUNCES A FINAL RULE UPDATING ITS EQUAL EMPLOYMENT OPPORTUNITY IN APPRENTICESHIP REGULATIONS

The U.S. Department of Labor has updated its Equal Employment Opportunity Apprenticeship Regulations. Click here to learn more.

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This Just In – VEVRAA Hiring Benchmark Released

The annual VEVRAA hiring benchmark has been released and it is 6.7%. Click here to learn more.

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The “Blacklisting” Rule is No More

In a move lauded by federal contractors, President Donald Trump signed a resolution into law today that blocks the “blacklisting” rule from taking effect.  The rule would have required federal contractors to disclose allegations of misconduct, whether or not those allegations were proven or dismissed, going back for three years.  Congress invoked the Congressional Review Act to block the rule before it took effect and President Trump’s actions today cemented the rule’s fate.

It has been targeted by contractors and Congress ever since it was enacted by President Obama by executive order.  Many critics cited the onerous reporting requirements and obligations which would discourage smaller businesses from competing for federal contracts.  Critics also argued that there are sufficient measures already in place to ensure fair pay and safe work environments under existing laws making the blacklisting rule an unnecessary and duplicative regulation.

Members of Congress were quick to hail the action as part of President Trump’s overall plan to reducing red tape and limiting the power of unelected officials.  Fact Sheet on the resolution.

For more information, contact Ahmed Younies at 714-884-4610 or ayounies@hrunlimitedinc.com.

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Press Release – U.S. Dept. of Labor Announces Availability of $66M in Grants

The U.S. Department of Labor has announced the availability of $66 million in grants to improve employment opportunities for justice-involved individuals. Click here to learn more.

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This Just In – OFCCP Just Mailed Scheduling Letters to Selected Federal Contractors To Be Audited

At the end of last week, the OFCCP began mailing Scheduling letters to selected contractors.  For Federal Contractors who received CSALs, be prepared.  Since Compliance Officers’ case load  is more manageable, expect more comprehensive and longer audits.

Remember! The OFCCP itself addressed on its website that A contractor establishment should not be scheduled for another compliance evaluation during the 24–month period following the date on which the prior review was closed.  The OFCCP further advised that the establishment’s representative should call the local OFCCP office which issued the scheduling letter to inform them of the pending 24-month period.  Click here for the OFCCP “FAQs”, and scroll down to the last question.

If you receive a letter and would like assistance in preparing for the Scheduling Letter or Desk Audit submission, please feel free to contact Ahmed Younies at (800) 708-3655 extension 703, ayounies@hrunlimitedinc.com or Chat with one of our representatives.

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Best Practices for Making Job Applications Accessible to Individuals with Disabilities

Applying for employment is nerve-wracking enough without a disability.  Try to imagine, then, if you had some form of disability that made it difficult to even navigate the on-line application process.  What if you are blind but the application has no text-to-speech capability?  Or, the application has a time limit that shuts you out after 60 minutes which is not enough time for you to read and respond since you are dyslexic?  While technology has made so much of hiring easier and accessible, it still lags behind in terms of accommodations for those with certain disabilities.

Accommodation in hiring, not just in employment, is required by the Americans with Disabilities Act (ADA).  The ADA prohibits discrimination against a qualified applicant with a disability by employers with 15 or more employees as well as government (both state and local) employers.  An individual with a disability, as defined by the ADA, is a person who has an impairment, either mental or physical, that “substantially limits a major life activity”, has a history or record of a substantially limiting impairment, or someone who is regarded by their employer as having such a substantially limiting impairment.

Such an applicant – an individual with a disability as defined under the ADA – is protected by the ADA in the hiring process, not just employment, provided the individual is able to meet the employer’s requirements for the position.  They must have the requisite training, education, licensure, etc., as required by the employer as a condition of employment.  Those individuals with disabilities who do meet this requirement are then eligible for accommodations, and if they require them, should be provided with them by the prospective employer.

While accommodation requirements for hiring are not new, the internet has changed the way in which most people now apply for positions.  And, unfortunately, the internet is not always accessible to those with disabilities, particularly those with blindness, paralysis, arthritis, low vision, or dyslexia.

Many large employers, including the federal government, are addressing this somewhat neglected area. Specifically, the Office of Federal Contract Compliance Programs (OFCCP) has already implemented rules designed to address the need for contractors to be accessible not just in employment, but in hiring as well.  Per the ADA and the Vietnam Era Veterans’ Readjustment Assistant Act (VEVRAA), federal contractors are required to make online applications for employment accessible to those applicants who are qualified and have disabilities or are disabled veterans.

For example, while many systems are somewhat accessible to disabled users and those users may also use adaptive software for their own purposes, an online system may still not be fully accessible to them.  The adaptive software may not correctly display graphics or a webpage may not work at all with adaptive software.  OFCCP encourages, but does not require, contractors to get around this problem by using “universal design” techniques in their website and application design.  This is particularly crucial and important if the contractor only uses on-line applications for employment.  Even then, the contractor must make alternative avenues for filling applications available to individuals with disabilities if they are still unable to apply on-line.

As for what not to do, do not establish a separate application system to be used solely by individuals with a disability.  This would constitute an illegal inquiry prior to employment as to the disability status of the applicant.  It could also be seen as a form of segregation.  This prohibition is different from the requirement that the employer offer an alternative method of application since this avenue is offered in addition to the on-line form and does not seek to isolate disabled applicants.

On the what to do, do provide additional accommodations to applicants such as offering information about job vacancies in formats that are accessible such as braille, or using TDD; and, allowing time extensions for applications that are timed for those with cognitive difficulties.

Do incorporate interoperability in your application system such that it will work with an applicant’s adaptive technology.  Do periodically evaluate and audit your hiring process to ensure that you are providing opportunities to individuals with disabilities, including in the hiring process and respect to online systems.

A vibrant and skilled applicant pool is waiting but may need some additional help to find their way to you.  Making your on-line application systems accessible to these individuals who may also have disabilities can get you access to these vibrant and skilled workers.

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Pressure Mounts on Feds to Cut Rule Requiring Pay Data

Last month, Victoria Lipnic, interim Chair of the Equal Employment Opportunity Commission (EEOC) expressed her opinion that the revisions to the EEO-1 form requiring disclosure of pay data from employers should be re-evaluated.  Her statement fell short of advocating outright repeal, mainly because Democrats still have a majority of the seats on the Commission.  Still, it sent a shot across the bow and gave a possible hint as to what the EEOC under the Trump Administration might do with this particularly controversial revision.

Now, the U.S. Chamber of Commerce has come out in favor of eliminating the rule or delaying its implementation by way of petitioning the Office of Management and Budget (OMB) to rescind its approval of the rule. The Chamber recently sent a letter to John Mulvaney, the director of OMB, which oversees and approves administrative rules for all federal agencies, requesting the rescission or at least review, which would delay implementation of the rule.

The rule has never been popular with the business sector.  At its core, it requires employers with 100 or more employees to report summary pay data, specifically what it pays its employees categorized by gender, ethnicity and race as part of the annual Employer Information Report or EEO-1.  The stated purpose of the data collection is to allow the EEOC greater information to use to investigate pay discrimination and wage gaps.  The information provided would not include individual pay, salaries, or any information that could identify a worker personally.

Lipnic, then as a commissioner, voted against its adoption when it was first introduced.  She was out-voted by the Democratic majority on the board and the rule was approved with a deadline from September 30, 2016, until March 31, 2018-to prepare for this change.  Given the due date which is almost exactly one year away, the pressure on the Trump Administration to make a decision about the fate of this rule is mounting because businesses will need to start preparing for the change by obtaining new software, hiring staff, and making other expenditures to become compliant on the deadline.

Keeping these deadlines in mind, the Chamber in its petition to OMB to rescind the rules, pointed out numerous flaws that it had identified in the program that it claims OMB approved in error.  Specifically, the Chamber argued that the EEOC failed to meet it regulatory burden under the OMB’s rules to show that the collection of the data would be useful or have any utility in furthering the EEOC’s directive of fighting pay discrimination.

Further, the Chamber argued, the EEOC failed to adequately disclose the costs and burdens the new reporting requirement would put on employers.  The Chamber argued that the costs and burdens were far higher than those estimated by the EEOC and argued that employers could easily be required to collectively spend upwards of $400 million each year to provide the data.

The Chamber urged OMB to see the error of its ways and pull back the approved regulations, preferably sooner rather than later, to at least hold them in abeyance while the Trump Administration decides how it wants to proceed.  Presumably, the Chamber is also working the Administration directly to make some decision as to the immediate fate of the rule.

The Chamber’s attempt to kill the rules through the OMB rather than the EEOC can be explained by the fact that as of now, the EEOC’s board is still made up of a majority of Democrats, all of whom voted for the rule revision.  It is very unlikely that they would change their mind now, meaning Lipnic and the Administration will have to wait them out until their terms expire.  This will not happen until later this year, which may be too late for some companies who would have already begun to make investments to comply.

For her part, Lipnic recently stated that she was not surprised that the rule’s burden was being reviewed and questioned by stakeholders.  She also stated that she was sure that OMB was going to give the matter a full review.

For more information, contact Ahmed Younies at 714-884-4610 or ayounies@hrunlimitedinc.com.

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OFCCP Sends Clear Message with Letters that Audits Will Start Soon

With the new administration still getting its bearings, there was naturally some curiosity as to whether and when the interim director of the Office of Federal Contract Compliance Programs (OFCCP) would continue with issuing Courtesy Scheduling Announcement Letters (CSALs).  The wait for an answer is over as of February 21, 2017, when CSALs signed by interim Director Tom Dowd were sent to the “Human Resources Director” of selected contractors.

CSALs are issued to federal contractors who have been chosen through the national office in Washington, D.C. from the Federal Contractor Selection System (FCSS) using neutral but undisclosed criteria.  They are designed to give the contractor advanced notice of an upcoming audit of the contractor’s compliance.  OFCCP sends out CSALs for several reasons including to allow contractors time to gather their documentation and support for the audit, to conduct self-audits to identify problem areas before OFCCP gets involved, and to take advantage of compliance assistance offered by OFCCP.  Be aware! The OFCCP itself addressed on its website that A contractor establishment should not be scheduled for another compliance evaluation during the 24–month period following the date on which the prior review was closed.  The OFCCP further advised that the establishment’s representative should call the local OFCCP office which issued the scheduling letter to inform them of the pending 24-month period.  Click here for the OFCCP “FAQs”, and scroll down to the last question.

Under the Obama Administration, the last round of CSALs was issued several years ago in 2014.  This is not as surprising considering that these are courtesy notices and not required by law.  The lag of at least two years since the last letters also fueled much of the conjecture as to whether the new administration would continue with the tradition.

Since CSALs are a courtesy, not a formal notice, it is not necessarily the case that a contractor that receives a CSAL will actually be audited.  Similarly, firms that are not issued CSALs may still be audited.  Thus, perhaps their broadest purpose is to put all contractors on alert that OFCCP audits are on the horizon and that while some have been identified, all other contractors are not necessarily going to be overlooked.

Even those firms that are on the list and receive CSALs, there is still a great deal of uncertainty as to the type and scope of the potential audit.  For example, OFCCP conducts audits based on contract award notices, directed reviews, conciliation agreements or individual complaints, or as part of the larger agency Corporate Management Compliance Evaluation (CMCE) or Functional Affirmative Action Plan (FAAP).  Again, therefore, the fact that notices are going out is alone enough to require contractors to begin to review their Affirmative Acton Plans (AAPs), particularly with respect to requirements related to individuals with disabilities and veterans.

As of now, the actual list of contractors – and thus the scope of the audit net – is not known, and therefore, at a bare minimum, all federal contractors should be on the lookout for a CSAL.  For those contractors who have a designated point of contact on the scheduling list that is issued in the scheduling cycle, the letter will likely be addressed to that person.  For all other contractors, it will likely be directed to the generic “Human Resources Director”.  Regardless of the addressee, however, any employees who handle the mail or correspondence should be advised to be on the lookout for the letter so that they can route it to the appropriate person when it comes in.

It is also important to note that the OFCCP may not necessarily send the letter to the headquarters of a contractor.  Rather, CSALs are sent to any establishment on the scheduling list.  If the establishment is not the same as the headquarters, it is the responsibility of the establishment to forward the letter to the headquarters.  Thus, explicit instructions for establishments that may be part of a larger corporation to know to look for CSALs and then to send them on to headquarters is warranted.

Similarly, all contractors should use the time between now and when they may receive the CSAL or a formal audit notice to get prepared.  This means reviewing the contractor’s AAP, identifying potential problem areas, and marshalling resources to be on stand-by in the event of an audit.  This is beneficial even if the contractor does not end up being the subject of an audit as it will put the contractor in a better position for compliance going forward.

We will update as we get more information about the scope and reach of the audits.

For more information, contact Ahmed Younies at 714-884-4610 or ayounies@hrunlimitedinc.com.

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In With the New, But Not Quite Out With the Old

A few weeks after his inauguration in January, Donald Trump appointed the only Republican Commissioner at the Equal Employment Opportunity Commission, Victoria Lipnic, as the acting chair of the Commission.  The question on the minds of many employers and human resource professionals, however, was not who was going to be appointed, but whether the new administration will also mean a new enforcement agenda.  According to Lipnic, the short answer is, “not really.”

At a recent panel discussion, Lipnic stated that while the EEOC will uphold the core mission of the EEOC by pursuing enforcement of the country’s anti-discrimination laws, the focus will shift more towards collaboration with employers to further bolster the Trump Administration’s commitment to job creation and growth.

Of course, how this actually plays out rests a great deal on when the Commission takes action.  Currently, Lipnic is the only Republican Commissioner.  However, with one current vacancy to be filled and another that will open later this year when Jenny Wang’s term expires, the swing from Democrat to Republican on the five-member board will be complete later this year.  Once Lipnic, or whoever is appointed as the permanent chair, has the majority in place, the fireworks may well begin.

The type and ferocity of those fireworks remains to be seen.  The first salvo was launched with Lipnic’s comments on the Strategic Enforcement Plan the Commission adopted in October 2016 for fiscal years 2017-2021.  She indicated that the priorities outlined in the SEP will be retained … for the most part.  Of those enforcement priorities, she did specifically single out systemic initiatives for review.  While systemic initiatives will continue, Lipnic will call for the Commission to seriously evaluate the resources that are being devoted to them.  In contrast, Lipnic opined that it was very important for the Commission to continue to pursue individual cases of discrimination.

For those searching the tea leaves for the true future of enforcement, Lipnic’s comments may not offer much guidance one way or the other.  This is understandable since the new administration is barely three weeks old and she is the acting chair, meaning she could be replaced in a few months.  Given her history of working with Democratic Commissioners, Lipnic may not be Trump’s first choice to head the Commission for the long run.  He may instead seek a Republican more aligned with his pro-business stance.

Lipnic did, however, make her Republic credibility clear by pointing out her prior disagreements with Democratic Commissioners over new changes to the EEO-1 form.  Specifically, she was against the requirement that employers with 100 or more employees also disclose wage data in addition to gender, race, and ethnicity.  She identified this regulation as a classic example of what the Trump Administration was seeking to have reviewed and reconsidered, at a minimum.

Similarly, she was not in favor of allowing the EEOC general counsel – another position that is to be filled – to file suit in district court absent the vote of the Commissioners. She believes that the Commissioners should have some greater oversight over this litigation.  Whether the EEO-1 and general counsel rules will fall by the wayside remains to be seen.

However, it does appear that Lipnic is attempting to not stir up the waters just yet, but is giving enough hints to mollify both employers and workers.  While this is not the modus operandi of the Trump Administration, it is a reflection of her long-standing relationship with the EEOC and her current temporary status.  Stay tuned for further updates!

For more information, contact Ahmed Younies at 714-884-4610 or ayounies@hrunlimitedinc.com.

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LexisNexis Pay Discrimination Identified in OFCCP Investigations

LexisNexis Risk Solutions will pay over $1.2 million in back pay and interest and provide additional relief to resolve allegations of systemic pay discrimination against women at its facilities in Alpharetta, Georgia, and Boca Raton, Florida.

LexisNexis provides computer-assisted legal and business research and risk management services. During fiscal years 2015 and 2016, the company had millions of dollars in federal contracts with the U.S. Departments of Homeland Security, Justice, Transportation and Labor, and the Office of Personnel Management and the General Services Administration.

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Southern Glazer’s Wine and Spirits (LA) Charged by the OFCCP for Hiring Discrimination

A routine investigation by the U.S. Department of Labor’s Office of Federal Contract Compliance Programs found that Southern Glazer’s Wine and Spirits of Louisiana, LLC, systemically discriminated against black applicants in its hiring practices at its St. Rose warehouse facility. The company has entered into a consent decree to resolve the department’s claims.

An OFCCP compliance review found that, from January 2008 to January 2009, the federal contractor discriminated against 467 black applicants for warehouse worker positions in violation of Executive Order 11246. OFCCP also found that the company failed to keep complete and accurate employment records and failed to evaluate its selection procedures as required by law.

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OFCCP Files Lawsuit Against Google Inc. for Compensation Data

The U.S. Department of Labor has filed a lawsuit to require Google Inc. to provide requested compensation data and documents for the multinational company’s Mountain View headquarters as part of a routine compliance evaluation.

The Office of Federal Contract Compliance Programs asked the technology giant to submit information in September 2015 about its equal opportunity program and to provide supporting documents as part of a scheduled compliance review. As a federal contractor, Google must agree to permit the federal government to inspect and copy records and information relevant to its compliance with the equal employment laws administered by OFCCP.

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For more information, contact Ahmed Younies at 714-884-4610 or ayounies@hrunlimitedinc.com.

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How Effective is the OFCCP? Part IV – The Conclusion

Happy New Year! We start 2017 wrapping up our series on the Government Accountability Office (GAO)’s report of the OFCCP’s effectiveness in enforcing Affirmative Action laws and regulations. You may recall that the GAO in its recent report found the OFCCP to be exhibiting five areas of weakness. In the previous parts, we explored the first three areas. We will now discuss the last two. Since you likely have a lot of work to do upon return from your holiday celebrations, let’s not waste any more time. Here they are:

Reported Inconsistencies in Compliance Evaluations May Be Exacerbated by Lack of Training

According to the GAO, Compliance Officers are not receiving the necessary training to obtain, much less maintain, the skills necessary to conduct Compliance Evaluations. This too would tend to lead to inconsistent practices across offices. For example, the OFCCP in 2013 focused its training efforts on recent regulatory changes. OFCCP officials acknowledge that since 2013 they have conducted 23 staff webinars focused on these regulatory changes. The result: Compliance Officers lack access to essential, generalized training and knowledge that enable them to properly address many of the issues that arise during Compliance Evaluations. In fact, the GAO states in its report, that “compliance officers we spoke to in one district office were concerned that the lack of ongoing professional training limited their ability to correctly and consistently conduct compliance evaluations”.

What if anything has the OFCCP done to address this issue? In some offices, managers paired Compliance Officers with less expertise in some areas with more experienced Compliance Officers. While that is certainly a reasonable and sensitive approach, there is one glaring flaw here, too: This approach only occurs in some offices, it lacks the centralized, holistic effort needed, and therefore cannot address the reported inconsistencies in the manner that is truly necessary and appropriate. The GAO also pointed out that the training being given fails to address employees’ career development concerns, as well as needed skill-specific training.

In addition, the training the OFCCP has provided has not been timely.   Agency officials stated that “budget constraints” have made providing timely training difficult. (This statement is curious in light of the fact that the OFCCP in the last few years probably experienced the largest budget allocations ever.) In half the regions the GAO visited, managers admitted that new Compliance Officers did not receive training. In one case, a Compliance Officer stated that s/he had been employed with the OFCCP for 8 or more months before receiving formal training. Compliance Officers in one district office specifically complained they felt unprepared to do their jobs.

Such a glaring deficiency leaves little wonder why the OFCCP’s efforts are at best inconsistent, and, in turn, why its effectiveness may be compromised. The GAO’s recommendation in this regard should therefore come as no surprise:

Provide timely and uniform training to new staff, as well as provide continuing 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.

Most Violations Are Resolved Through Conciliation Agreements

According to the GAO, between Fiscal Years 2010 and 2015, the OFCCP resolved 99 percent of its violations through Conciliation Agreements, in which the contractor agrees to take certain remedial actions to address the violation(s) in question.  Those remedies may include injunctive-type relief, where a contractor is required to either refrain from certain practices deemed discriminatory or to implement certain measures, such as an applicant tracking system. Remedies may also include offering jobs to certain rejected applicants, back pay and other money damages.

Is there anything wrong with resolving violations through Conciliation Agreements? Inherently, no. The problem is if that is effectively the only remedy, then many cases will fall through the cracks. For example, what happens if the contractor does not live up to the commitments it made in a Conciliation Agreement? Compliance Officers are supposed to monitor and report progress in compliance with the Conciliation Agreement. When a contractor does not comply with a Conciliation Agreement, the OFCCP may begin an investigation. The GAO notes that “since 2010, OFCCP has referred a small number of cases to the DOL Office of the Solicitor for enforcement through administrative enforcement proceedings… Additionally, OFCCP may refer a case to the Office of the Solicitor in certain other circumstances, such as when an establishment has denied compliance officers access to information or their facilities. When referred a case, the Office of the Solicitor generally reviews the case and may take further action through administrative enforcement procedures.”

What happens then? Administrative sanctions can be imposed, up to and including debarment, where a contractor loses their contract and is ineligible to receive future federal government contracts. However, even the OFCCP admits that debarment is rare. In fact, on average, debarment happened less than once per fiscal year since 2010.  The rarity of this remedy is reflective not of effective enforcement efforts by the OFCCP, but the OFCCP’s reluctance to use it. Why is that? According to the OFCCP, “because contractors who are debarred are no longer under OFCCP’s jurisdiction and not subject to the worker protection requirements the agency oversees.” Here too, it is easy to see where cases of either discrimination or other violations of affirmative action laws and regulations are falling through the cracks.

Oddly enough, the GAO’s remaining recommendations do not address this particular issue. It would seem, however, that the OFCCP needs to re-visit both its methods and its use of available methods. While it did not specifically name these as weaknesses in enforcement efforts, the GAO did include these last two recommendations in its report:

• 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.

• 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.

These last two recommendations are the only ones directed at how to work with contractors.

So, there you have it. According to the GAO, the OFCCP needs to take steps to ensure consistency in its offices. That’s the nutshell version. You can read our previous two posts to get a little more in depth and if you want more details, you can access the GAO report here.

Suppose you don’t want to do any of that? What can you take away from this three-part series, and the GAO findings? Here’s what you should not do. You should not assume that because the OFCCP has been found by the GAO to have weaknesses in its effectiveness that you no longer need to focus on your affirmative action obligations as a federal contractor. As you well know from our other posts, once you are selected for a Compliance Evaluation, you will be subject to scrutiny, if not sanctions, if the OFCCP finds violations. In our opinion, it is not worth the risk. So either keep doing what you’re doing, or reach out to us with any questions.

For more information, contact Ahmed Younies at 714-884-4610 or ayounies@hrunlimitedinc.com.

 

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How Effective is the OFCCP? The GAO Answers – Part III

We started this series with an overview of the GAO’s findings as to the OFCCP’s effectiveness. Just to recap, here are the five areas of weakness found by the GAO:

1. Weakness in OFCCP’s process for selecting contractors for Compliance Evaluations makes it challenging to know the extent to which Equal Opportunity Requirements are followed;

2. OFCCP Relies on Voluntary Compliance with Requirements;

3. OFCCP’s Compliance Evaluation Assignment Process May Result in Geographic Imbalances;

4. Reported Inconsistencies in Compliance Evaluations May Be Exacerbated by Lack of Training;

5. Most Violations Are Resolved Through Conciliation

In our previous post, we discussed the first weakness listed above. Let’s move onto the second.

The OFCCP Relies on Voluntary Compliance with Requirements:

This particular weakness would seem to be so self-explanatory, that we might even ask, “Why would the OFCCP use this as a primary strategy if it hopes to be effective?” The answer, simply put, is that the OFCCP, even the more beefed up version we have seen in recent years, cannot possibly conduct Compliance Evaluations for all contractors. (According to the Government Accountability Office report there are “tens of thousands” of contractors under the OFCCP’s jurisdiction.) That said, reliance on voluntary compliance simply cannot ensure that contractors are complying with even basic requirements, such as writing and implementing an AAP, let alone analysis, record keeping and many other more complex regulatory requirements. Note: Failure to have a written AAP was one of the top violations since 2008.

The implication here is fairly obvious: If the OFCCP is relying on voluntary compliance it has little or no actual enforcement mechanisms in place to ensure compliance. For example, when the OFCCP selects a contractor for a Compliance Evaluation, it sends a Corporate Scheduling Announcement Letter, or CSAL (essentially a heads up) that it will be scheduling a Compliance Evaluation. In the Scheduling Letter, the OFCCP requests the contractor to submit data, including a copy of the AAP, within 30 days. By the OFCCP’s own admission, however, approximately 85 percent of contractors who received scheduling letters in 2015 did not submit an AAP within the aforementioned 30 days. Many requested extensions. While contractors are required in their contracts to develop an AAP within 120 days of the contract commencement, and update the AAP annually, they often do not. What is more, the OFCCP has no process for ensuring compliance with even this requirement, and therefore lacks a reliable indicator of whether its own objectives are being met, and, consequently, whether its own efforts in doing so are effective.

This weakness appears so glaring, so obvious that one wonders why it should have taken a lengthy investigation or audit by the Government Accountability Office (GAO) to uncover it.

The GAO’s recommendation to the Secretary of Labor: “Develop a mechanism to monitor AAPs from covered federal contractors on a regular basis. Such a mechanism could include electronically collecting AAPs and contractor certification of annual updates” therefore should come as no surprise.

 

Let’s move onto the third weakness identified by the GAO:

OFCCP’s Compliance Evaluation Assignment Process May Result in Geographic Imbalances

When the OFCCP distributes its scheduling lists, or assigns Compliance Evaluations to District or Area offices, it does so primarily based on the physical address of the contractor establishments. In other words, the contractor’s physical address determines which district or area office will be assigned the Compliance Evaluation. The reason: to minimize travel costs if an on-site visit becomes necessary. According to the GAO this distribution method is outdated, given the steady decline in the number of evaluations actually requiring on-site visits. Specifically the OFCCP admitted that in 2015, only 25% of Compliance Evaluations required onsite visits. The OFCCP has also acknowledged that its current distribution of compliance officers among the 48 district and area offices did not correspond to the national distribution of federal contractors. According to the OFCCP this uneven distribution is due in part to attrition levels across offices. These disparities impact how many officers are actually available in the different district and area offices to conduct compliance evaluations, increasing the likelihood of unevenness and inconsistencies and lack of continuity. Clearly, such disjointed efforts will impact the agency’s effectiveness.

The GAO therefore recommended that to address this particular weakness, the Secretary of Labor “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”.

In light of these identified weaknesses, and the GAO’s recommendations to the Secretary of Labor, what can – and should—federal contractors do? The short answer: Expect some changes aimed at tightening up the OFCCP’s enforcement processes and mechanisms. Yes, we know that with a new President taking office soon – one with a very different political agenda than Mr. Obama, that the OFCCP may develop a new and different look. The changes recommended by the GAO however, do not necessarily require more revenue, however. Even if the OFCCP’s presence does not appear to loom as large in the near future, the agency itself, will not be going away, and it will still be charged with enforcing Affirmative Action laws and regulations. Reviewing and ensuring your own compliance can only help you.

In our next installment we will cover the last two weaknesses identified by the GAO, and, of course, we will provide more recommendations to you, our readers.

For more information, contact Ahmed Younies at 800-708-3655, x703 or ayounies@hrunlimitedinc.com.

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How Effective is the OFCCP? The GAO Answers – Part II

The OFCCP selection process: an area for improvement

What exactly are the weaknesses in the selection process? According to the GAO, “OFCCP’s contractor selection process is nonrandom and does not produce a generalizable sample of contractors for evaluation”. The result, according to the GAO: OFCCP cannot draw conclusions about noncompliance risk in the overall federal contractor population, based on the sample provided by the number of Compliance Evaluations it conducts.

While the OFCCP uses neutral factors in its selection process, such as alphabetical order, employee count, contract value and contract expiration date, it is not able to identify which of these factors, if any, are associated with noncompliance risk due to use of nonrandom selection of contractors for review. The OFCCP therefore cannot state with any degree of certainty the extent of noncompliance by federal contractors, and does not really even know if it is focusing its efforts on those contractors at greatest risk of noncompliance. Even if the ACE method is itself inherently effective, it will not matter, if it is not targeting at those most at risk of non-compliance.

While OFCCP has tried developing a model for identifying factors associated with noncompliance, when put into practice that model did not prove to be useful. Why? According to OFCCP officials “the model was developed with a nonrandom set of contractor establishments selected from prior OFCCP compliance reviews”.  OFCCP is reportedly working on developing a new model.  It should come as no surprise, then, that the GAO’s first recommendation is as follows:

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 opportunity and affirmative action requirements.

In plain English, the GAO seems to be saying, that the factors the OFCCP uses in selecting contractors for compliance evaluation are faulty, so therefore OFCCP should revise those factors. Since the report apparently offers no insight into how the OFCCP could or should do that, the recommendation, in and of itself, does not appear to be of much help.  Hopefully, some additional guidance will follow.

In light of this finding, here are some proactive steps that federal contractors should take, sooner rather than later:

1. If you do not have an AAP, make sure to develop and implement one immediately. Not having an AAP is a surefire way to be found in violation of EEO/AA requirements if you are selected for a Compliance Evaluation;
2. Review your hiring, promotion, termination and compensation practices. Look for statistical disparities;
3. If you do find disparities, either take steps to address them or, if there are valid reasons for such disparities, document those reasons;
4. Document any steps you take to address any disparities;
5. Make sure you are compliant with all recordkeeping requirements;
6. Investigate any allegations of discrimination, document your findings, your responses and reasons for all actions taken or not taken in response.

Clearly this list is not exhaustive, but it should be enough to get you started. Next week, we will continue this discussion with the GAO’s second finding, its recommendations to the OFCCP and our recommendations to you, our readers.

For more information, contact Ahmed Younies at 800-708-3655, x703 or ayounies@hrunlimited.com.

 

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How Effective is the OFCCP? The GAO Answers – Part I

The OFCCP often projects a larger than life presence in the consciousness of many federal contractors. How can it not? For FY 2016, the OFCCP had an annual operating budget of just over $105 million and was authorized 615 full-time equivalent staff positions.  While its staffing decreased from 755 authorized FTE positions in FY 2015 (an almost 19-percent decrease) its budget increased by about a half a million dollars. With its impressive budget and significant FTE authorization, with so many big-payout settlements of discrimination cases, with so many new regulations and data collection requirements, with seemingly so much stepped-up enforcement activities, it must really be making great strides in eradicating discriminatory hiring and employment practices by federal contractors. Not so, according to the General Accounting Office (GAO). The House of Representatives Committee on Education and the Workforce, and its Subcommittee on Workforce Protections requested the GAO to review the OFCCP’s performance. To say the least, those reviews were less than stellar. Since we assume this topic to be of great interest to our readers, we will devote the next few weeks to a series on the GAO’s findings, its recommendations, and, of course, we will also include our own recommended Best Practices. First, however, let’s get some background.

You may be aware that whereas the OFCCP’s activities aimed at ensuring non-discrimination have included outreach and compliance assistance (with AA laws and regulations) it chose to refocus its efforts on enforcement as of 2011. So, in Dr. Phil language, “How’s that working out” for them? Not well, according to the GAO. In order to detect violations, the OFCCP relies heavily upon Compliance Evaluations (aka “audits”). According to the GAO, the OFCCP conducts compliance evaluations on about 2 percent of all federal contractors, annually. Since 2010 about 78 percent of all evaluations found no violations, and about 2 percent indicated discriminatory practices.  Wouldn’t that just mean that contractors are doing a great job of complying with affirmative action laws and regulations? Not if the OFCCP’s means and methods are flawed – which, they are, according to the GAO.  More on that in a moment.

The OFCCP’s two approaches to ensure compliance with federal EEO and Affirmative Action requirements are enforcement and compliance assistance. We have already established however, that the bulk of the OFCCP’s emphasis since 2011 has been on enforcement, primarily by conducting Compliance Evaluations, which it in turn carries out primarily by using compliance officers to evaluate contractors. The OFCCP selects which contractors to review and then reviews those contractors’ hiring, promotion, compensation, termination and other employment practices, including recordkeeping. The evaluation may occur at the contractor’s facility which produces the goods or services. The facility can be a factory, office or store.

How does the OFCCP determine who it selects for review? In general it uses federal and commercial databases, along with “other factors”. Regional and district office staffing levels establish the basis for determining total number of contractors reviewed each year within the jurisdiction of the particular regional office. Moreover, based on the location of the establishment(s) to be reviewed, the local district office receives the scheduling list of contractors located in its jurisdiction. From there, several facially neutral factors, such as alphabetical order, employee count, contract value, contract expiration date, among other factors, determine further allocation or sorting. Many of you are aware of this process. We include it here, because the GAO raises concern about the selection process, which we will discuss momentarily.

One more general point about the OFCCP’s enforcement efforts: whereas through 2010 the OFCCP’s Compliance Evaluation process had been known as Active Case Management (ACM) the OFCCP changed its process to one of Active Case Enforcement (ACE). Why and what’s the difference? Perhaps we can best find that answer in the OFCCP’s own directive outlining ACE procedures. According to the OFCCP, ACM proved to be of “limited utility” because it could not effectively use all of its investigating tools, such as offsite review of records. The OFCCP therefore implemented the ACE process, which requires more comprehensive evaluations of each selective contractor. Presumably, the ACE model allows for a more proactive, if not aggressive approach. The ACE process includes, without limitation, ascertaining the presence of indicators of discrimination or violations that warrant an onsite investigation. Indicators might include patterns of individual and/or systemic discrimination, patterns of major technical violations such as recordkeeping deficiencies and failure to maintain an AAP, in addition to statistical and anecdotal evidence of discrimination. (Item: In 2015, close to 85% of evaluated contractors did not submit their AAP within 30 days of the OFCCP’s request and, in some cases, received extensions).

The GAO concluded that significant weaknesses in the OFCCP’s enforcement efforts render the OFCCP unable to truly assess the extent of federal contractor compliance. With the budget and staff devoted to objectives that the Obama Administration has identified as a high priority, how can that be? What are those weaknesses? The GAO, in its report identifies five key weaknesses. We will list them here:

1. Weakness in OFCCP’s process for selecting contractors for Compliance Evaluations makes it challenging to know the extent to which Equal Opportunity Requirements are followed;

2. OFCCP Relies on Voluntary Compliance with Requirements;

3. OFCCP’s Compliance Evaluation Assignment Process May Result in Geographic Imbalances;

4. Reported Inconsistencies in Compliance Evaluations May Be Exacerbated by Lack of Training;

5. Most Violations Are Resolved Through Conciliation

We’ll start with the analysis of the first deficiency, weaknesses in the selection process, and, over the next few weeks, address the others.

For more information, contact Ahmed Younies at 714-426-2918, x1 or ayounies@hrunlimitedinc.com.

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What the EEOC and OFCCP Want You to Know About Criminal Background Checks

What’s up with the EEOC, the OFCCP and criminal background checks? While the EEOC enforces anti-discrimination laws for private employers, and generally those who employ 15 or more employees, the OFCCP enforces affirmative action laws and regulations to which federal contractors are subject. Administering background checks to all applicants can’t be discriminatory, can it? If not, then why would employers even have to worry about the EEOC or the OFCCP when conducting background checks?

Let’s answer that question and some others:

Are former convicts a protected class under anti-discrimination laws?  No. Certain practices, although themselves neutral, may, by “hurting” a disproportionate number of   people protected under federal anti-discrimination laws, have a discriminatory impact. Those practices too would then be in violation of federal anti-discrimination laws.  The EEOC, citing studies show that African-Americans  and Hispanics have significantly more arrests and convictions,  takes the position that blanket exclusions of all applicants with criminal histories therefore has a discriminatory impact on African-Americans and Hispanics. The OFCCP has specifically stated that it follows the EEOC’s practices, and in Directive 306, explicitly adopted the EEOC position and practices with respect to use of arrest and conviction records in making hiring decisions.

Why do the EEOC and OFCCP get involved in this practice? Many employers are surprised to hear that the EEOC has issued position statements since at least 1987 on this very issue. Based on this position, it began investigating complaints relating to use of background checks when hiring, and filing lawsuits long before issuing its latest Enforcement Guidance last April. Again, the OFCCP has long followed EEOC practices with respect to this and many other anti-discrimination laws and measures.

Does this mean that employers can no longer conduct criminal background checks? No!  Employers can, and, in order to avoid harmful situations and negligent hiring suits, should, still conduct background checks. The EEOC’s Enforcement Guidance attempts to provide employers with some additional guidelines as to how and when to use the information contained in criminal background checks in making their hiring decisions. Prior to issuing its Enforcement Guidance, the EEOC provided more basic guidelines (which the Enforcement Guidance has incorporated) by telling employers to consider the following factors with respect to applicants and their criminal backgrounds:

1. The nature and gravity of the offense;
2. Time elapsed since the conviction and/or completion of sentence;
3. Nature of the job held or sought.

The EEOC, and federal court cases (the US Supreme Court has never decided this issue) also have held that a business necessity will justify exclusion of an applicant based on his or her criminal record. Simply put, if one’s criminal past is not relevant to the essential functions of a particular job or some other compelling business necessity, the employer should not exclude the applicant on that basis. For example, if Betty applies for a job as a bookkeeper and was convicted two years ago for embezzlement, that is relevant to the job. Rejecting her is justified even under the EEOC’s analysis and guidelines.  An employer might reject a man with a history of sexually assaulting women  for a job that would put him in proximity with a female employee late at night when no one else is around and be acting consistent with a business necessity. On the other hand, if Danny pleaded guilty to public drunkenness one time 7 years ago that may not be a justifiable basis for refusing him a job as an administrative assistant.

Since the OFCCP is all but in lock-step with the EEOC on this issue, federal contractors would do well to familiarize themselves with the EEOC’s Enforcement Guidance.

What then, does the EEOC’s Enforcement Guidance really change?  Given that the EEOC’s position and practices have been essentially the same for over 25 years, perhaps not much at all.  The Guidance over 46 pages long, mostly cites background, studies and reasoning for its position. The part of most practical interest to employers, the list of Employer Best Practices, is at the end of the Enforcement Guidance, and is as follows:

General:

• Eliminate policies or practices that exclude people from employment based on any criminal record. Employers cannot have blanket exclusions of those with criminal pasts. (So this is a blanket exclusion of blanket exclusions?? Maybe.)
• Train managers, hiring officials and decision makers about Title VII and its prohibition on employment discrimination. Title VII of the Civil Rights Act of 1964 is the law that prohibits employment discrimination against certain classes of people identified therein (i.e. “protected classes”). The EEOC wants employers to sensitize its managers to these laws, and how otherwise neutral practices can have a discriminatory impact on the people who Title VII is designed to protect. Ideally, training managers about Title VII and related laws should not be new.

Developing a Policy:

• Develop a narrowly tailored written policy and procedure for screening applicants and employees for criminal conduct (that does the following: )
  • Identify essential job requirements and the actual circumstances under which the jobs are performed.
  • Determine the specific offenses that may demonstrate unfitness for performing such jobs
  • Identify the criminal offenses based on all available evidence.
  • Determine the duration of exclusions for criminal conduct based on all available evidence.
  • Include an individualized assessment.
  • Record the justification for the policy and procedures.
  • Note and keep a record of consultations and research considered in crafting the policy and procedures.
• Train managers, hiring officials and decision makers on how to implement the policy and procedures consistent with Title VII.

In short, the EEOC and OFCCP want employers to implement policies that consider the relationship of the criminal offense(s) to the essential job requirements, especially if they are “old”, possible rehabilitation by the candidate, and whenever possible, to evaluate on a case by case basis. If an employer rejects an applicant based on criminal history, it should record the decision and the justification and, once it has created a policy and procedures, train those it expects to be implementing them. (NOTE: According to the EEOC, arrests alone are not themselves evidence of criminal conduct, though the underlying conduct leading to the arrest, if related to job functions or business necessity can be considered.)

Questions:

• When asking questions about criminal records, limit inquiries to records for which exclusion would be job-related for the position in question and consistent with business necessity.

Employers should, whenever possible, only ask about items related to the actual job or a specific business necessity. If the report refers to something that is not related to the job, the employer should not ask about it.

Confidentiality:

• Keep information about applicants’ and employees’ criminal records confidential. Only use if for the purpose for which it is intended.

This one seems self-explanatory.

Well, let’s stop here for now, and if you want to learn more about use of criminal background checks in the hiring process, make sure to attend our webinar on Thursday, November 10 at 10:30 a.m. PST, 1:30 p.m. EST.

For more information, contact Ahmed Younies at 800-708-3655, x703.

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Federal Law Alert: Annual EEO-1 Reports

Pay Data Will Now Be Required on EEO-1 Reports for Employers with 100 or More Employees

The Equal Employment Opportunity Commission (EEOC) has announced that it will require employers with 100 or more employees to submit summary pay data and total hours worked for the year as part of the annual EEO-1 report.

The first report, capturing data from 2017, will be due March 31, 2018. In subsequent years, March 31 will become the new annual deadline for EEO-1 reports—a change from September 30. As a result of pushing the reporting date from September to March, no reporting will be due in 2017.

On the new form, federal contractors and subcontractors with 50-99 employees will not report summary pay data or hours, but they will continue to report employees by job category as well as by sex and ethnicity or race.

Continuing with current practice, employers with 99 or fewer employees and Federal contractors and subcontractors with 49 or fewer employees will not be required to complete the EEO-1 report.

EEO-1 reporting of sex and ethnicity or race is based on counts taken during the “workforce snapshot period.” For reporting years 2016 and earlier, the “workforce snapshot period” was July 1 to September 30. Starting with the EEO-1 report of 2017 data, however, the “workforce snapshot period” will be October 1 to December 31. An employer may choose any pay period during this three-month “workforce snapshot period” to count its full and part-time employees for the EEO-1 report.

According to the EEOC, the new requirement is intended to help decrease pay disparities based on gender and race or ethnicity. The EEOC will use the collected data to help it investigate and identify unlawful pay discrimination. It will therefore be important for employers to ensure that they have systems in place to collect the required data and correct any pay disparities that cannot be explained by legitimate business factors.

For more information, contact Ahmed Younies at (800) 708-3655, x703, or ayounies@hrunlimitedinc.com.

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An Overview of the Fair and Safe Workplaces Final Rules

Back in July, 2014, President Obama signed Executive Order 13673, also known as the Fair and Safe Workplaces Executive Order. It is a comprehensive Order aimed at ensuring federal contractors’ compliance with fourteen—yes fourteen–federal labor laws, along with their state counterparts. Now, two years later, the Federal Acquisition Regulatory (FAR) Council and the United States Department of Labor have published final rules implementing the EO 13673. The stated objective of the Executive Order and the implementing rules is to ensure that federal government agencies contract with “responsible” contractors. In other words, contractors subject to the Executive Order can face serious consequences, including loss of federal government contracts if they do not comply with the fourteen labor laws. (See below).  The new rules are quite comprehensive. While we cannot possibly explore all of them here, we can at least get an overview. Let’s start with 4 of the 5 W’s (who, what, when and how):

Who is affected by the new rules? Federal contractors (and sub-contractors) with contracts valued in excess of $500,000.

What are the new rules? In a nutshell, the new rules, you must self-report any violations with the following fourteen federal labor laws and their state counterparts:

1. Fair Labor Standards Act
2. Occupational Safety and Health Act (and state law equivalents)
3. Migrant and Seasonal Agricultural Worker Protection Act
4. National Labor Relations Act
5. Family and Medical Leave Act
6. Davis-Bacon Act
7. Service Contract Act
8. Title VII of the Civil Rights Act
9. Americans with Disabilities Act
10. Age Discrimination in Employment Act
11. Executive Order 11246 (affirmative action and equal employment opportunity)
12. Vietnam Era Veterans’ Readjustment Assistance Act
13. Section 503 of the Rehabilitation Act
14. Executive Order 13658 (federal contractor minimum wage)

When do the new rules take effect?  Agencies can use the DOL guidance immediately. The DOL guidance is supposed to assist agencies in complying with the Executive Order.  The FAR Council’s rules are phased in over a two-year period, beginning October 25, 2016. Here are some of the key facets:

• Starting September 12, 2016 you may request from the DOL a voluntary assessment of your labor compliance history. While the request would implicitly be in anticipation of bids on future contracts, it would not be tied to any specific bids or contracts. This type of voluntary assessment, also known as a pre-assessment, would be seen as a mitigating factor with respect to future acquisitions. This option is available to you as of September 12, 2016, on an ongoing basis. In other words, you can always do a voluntary pre-assessment independent of any specific bid/acquisition.
• As of October 25, 2016, federal prime contractors with contracts valued at or above $50 million must disclose any violations of the above-cited 14 federal labor laws in the previous year. Contractors and sub-contractors with federal contractors of $1 million or more may not require employees to arbitrate sexual assault, harassment or Title VII, though the parties may agree to binding arbitration after the dispute arises. In other words, covered contractors will no longer be able to require employees to sign an arbitration agreement as a condition of employment.
• As of January 1, 2017 all federal contractors and sub-contractors must start providing their employees wage statements.
• As of April 24, 2017 all federal contractors must disclose violations in the previous year of the 14 above-cited labor laws in when seeking contracts valued at $500,000 or more, and sub-contractors must begin doing so as of October 25, 2017; all federal contractors and sub-contractors must begin doing so as of October 25, 2018.

How will the new rules be implemented? In a nutshell, contracting officers are supposed to consider your compliance record in the previous year before awarding bids on contracts for $500,000 or more.   If your company is a subsidiary, parent or affiliate Company, the contracting officer under FAR Council rules evaluates the compliance history of the entity whose name is on the bid. What else can you expect? First and foremost, just because you have a finding of a compliance violation doesn’t mean that your company will be rendered “non-responsible”. In other words, that alone will not automatically cause you to lose the contract.  Information you provide about mitigating factors is considered –and is kept confidential, unless you, the contractor decide you want that information disclosed. Each contractor under EO 13673 designate an Agency Labor Compliance Advisor (ALCA), who assists your contract officer in evaluating the information. The ALCA must provide a written analysis of the compliance issues/history, and the contracting officer must include in the contract file how it weighed the analysis in arriving at the “non-responsibility” determination, if any. Even successful bidders are not entirely off the hook, however. If you secure a federal contract of $500,000 or more, you will still have to provide updates as to your labor law compliance twice each year during the contract term.

Note that most of the requirements discussed will only apply to those with federal contracts of at least $500,000. What if your contracts are valued at less than $500,000? Don’t get excited. You’re not entirely off the hook either. You still have to provide wage statements to your employees, starting January 1, 2017. What information must those statements include? The statements must show hours worked, overtime hours worked, pay rate and total pay for the pay period, and any additions to or deductions from pay. If a significant portion of your workforce’s primary language is other than English, the statements must be printed in that language. Exempt employees’ statements if they indicate the employee’s exempt status need not indicate the hours worked.  What if your workforce consists solely or primarily of independent contractors? You still have to provide a statement. In this case the statement would indicate their independent contractor status. (Remember also, that if you have any contracts valued at $1 million or more, the aforementioned limitations on arbitration apply to you as well.)

Is that everything? Frankly no. There is much more, but there is simply not enough time – or room—to cover it in one post.  We may, as we often do, follow up as appropriate with additional information.

For more information, contact Ahmed Younies at (714) 426-2918, x. 1, or ayounies@hrunlimitedinc.com.

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Anti-Discrimination Rules with a Twist: The OFCCP’s Final Rules on Sex Discrimination (Part I of II)

The OFCCP’s Final Rule on Sex Discrimination took effect this week, on August 15, 2016. Many of you already know that sex discrimination has been illegal since at least 1964, when the Civil Rights Act was enacted. Pay Discrimination based on sex has been illegal since at least 1963. Most employers know they cannot base employment decisions and practices on sex. Yet the OFCCP has issued new rules on sex discrimination – why? The OFCCP says its previous guidelines and regulations were “outdated”.

The goals of this Final Rule:

“[H]armonizing OFCCP’s outdated regulations with current Title VII jurisprudence” and facilitating “contractor understanding and compliance, potentially reduc[ing] contractor costs, and increase labor-market efficiency changes”.

Let’s have a look those new rules, then, shall we?

Here is what the Final Rule provides:

• Accommodations to workers with conditions related to pregnancy/childbirth:

Required accommodations include without limitation extra bathroom breaks, light-duty assignments, in those situations where contractors provide similar accommodations to similarly-situated non-pregnant workers (e.g. individuals with disabilities).

• Fair Pay Practices:

Most of you know that employers can’t pay workers differently based on sex. What you may not know is what practices could actually constitute pay discrimination. Here are some: denying opportunities for overtime, training, higher-paying jobs, based on a worker’s sex, or based on assumptions about a worker because of their sex or gender stereotypes (not conforming to particular gender norms and expectations about their appearance, attire, or behavior). The new rules state these and other points clearly, whereas the old rules did not.  Under this Rule, workers can recover lost wages whenever an employer pays wages resulting from discrimination, and not just when the underlying decision is/was made.

• Equal benefits from fringe-benefit plans, to male and female employees:

Fringe benefits include without limitation medical, hospital, accident, life insurance and retirement benefits as well as profit-sharing and bonus plans, leave and other terms and conditions of employment.

• Forbids sexual harassment:

Expand the scope of harassment training to include pregnancy/sex-stereotyping/child rearing/sexual orientation and/or transgender modules. As we know, sexual harassment includes without limitation unwelcome sexual advances, requests for sexual favors, offensive remarks about a person’s sex, other verbal or physical conduct of a sexual nature when the conduct interferes with the person’s work performance, forms the basis for employment decisions or otherwise creates a hostile working environment.

• Equal access to jobs and workforce development opportunities for men and women:

Contractors cannot establish different requirements based on sex unless it can show that such requirements are a bona fide occupational qualification (this is a very high standard, and therefore a very narrow exception). Different job requirements based on sex must be job-related and consistent with business necessity.

• Protection for workers with caregiving responsibilities:

This provision addresses the common practice of basing treatment on stereotypical assumptions that women are more likely to have caregiving responsibilities and then denying employment opportunities on that basis. It reinforces the prohibition against denying opportunities to any employee based on his or her sex. Conversely, if a father requests flexible arrangements for caregiving, it must afford those accommodations if it makes similar accommodations for working mothers.

• Protections for transgender workers:

This does one thing that Title VII does not: it clearly states that sex discrimination includes discrimination based on gender identity. It also requires that workers be allowed to use bathrooms, changing rooms, showers and similar facilities consistent with their gender identity. It also explicitly states that contractors cannot exclude coverage for care related to gender dysphoria or gender transition.

• Protection against discrimination based on sex stereotypes:

Contractors cannot discriminate in any way against employees or applicants who fail to comply with gender stereotypes about how men and women act or the types of jobs they “should” do.

• Protections for religiously affiliated contractors under the Religious Freedom Restoration Act (RFRA):

The RFRA allows religiously affiliated contractors, such as religious corporations, educational institutions or societies to favor people of a particular religion when making employment decisions, and follows Supreme Court precedent, which recognizes the First Amendment’s requirement of a “ministerial exception” from employment discrimination laws. The ministerial exception prohibits the government from interfering with the religious organization making employment decisions about its so-called ministers (this alone could probably be a separate topic).

As you can see, this Rule is fairly comprehensive. It not only takes Title VII and its amendments, and cases interpreting those laws and incorporates them into one Final Rule, it goes even further. How so?

Title VII itself, along with its amendments, and along with most cases interpreting them, is silent on the issues of gender identity and to some extent, on gender stereotypes.

We see here another example of President Obama using the OFCCP to advance those parts of his agenda that he has not been able to push through Congress and make all his employers subject to it.

If you are a federal contractor, what has changed for you? Theoretically nothing. Practically speaking, the changes may be significant. This Final Rule gives the OFCCP a specific tool to use to go after contractors who continue to engage in sex discrimination. It also makes it harder for you as a federal contractor to claim you  “didn’t know” that certain behaviors constitute sex discrimination, and puts more greater onus on you to ensure equal employment opportunities for men and women. Finally, you cannot argue that the protections don’t apply to transgender employees, the way non-contractor employers might with regard to Title VII.

Suppose you are not a federal contractor. Don’t get complacent! The issue of protection to transgender employees will probably reach the US Supreme Court in the not-too-distant future. Moreover, the fact that the EEOC and the OFCCP and the President (at least until the end of 2016) are on the same page on this and other sex-related issues does create some pressure to  keep the tide moving in that direction. Therefore, non-contractor employees would do well to get ahead of the issue by reviewing the Final Rule and acting accordingly.  Are there specific steps you can take? Stay tuned, as we reserve the right to cover that in an upcoming post!

For more information, contact Ahmed Younies at (714) 426-2918, ext. 1, or ayounies@hrunlimitedinc.com.

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