President Trump Takes Broad Aim at DEI and Takes Steps to End All Affirmative Action in Employment by Revoking EO 11246

On Tuesday, President Trump signed an Executive Order to end employment preferences based on, among other things, race and gender, as well as programs to encourage diversity, equity and inclusion.     He has directed federal agencies to investigate private sector employers which are not complying with equal opportunity statutes (like Title VII) and are, instead, showing impermissible racial and gender preferences.  While the actions aimed at DEI programs was expected, the Executive Order goes as far as to revoke Executive Order 11246 which established and governs affirmative action programs required of virtually all federal contractors.   While federal contractors may continue to comply with their Affirmative Action Plans and the current regulations for 90 days, OFCCP has been directed to immediately cease promoting “diversity,” holding employers liable for affirmative action or requiring employers to obtain workforce balancing based on race, gender, sexual identity, religion or national origin, etc.  DEI objectives are to be removed from grants and federal acquisition materials.  The Order specifically provides that it does not affect employment preferences for veterans and does not prohibit free speech, including speech which endorses or advocates DEI initiatives, which are considered to be illegal under this Executive Order.  The Order is silent about Rehabilitation Act requirements of federal contractors. 

The Order also indicates an intention to formulate a policy of private sector enforcement of EEO laws against DEI policies.  As part of that initiative:

As a part of this plan, each agency shall identify up to nine potential civil compliance investigations of publicly traded corporations, large non-profit corporations or associations, foundations with assets of 500 million dollars or more, State and local bar and medical associations, and institutions of higher education with endowments over 1 billion dollars;

The text of the order is below, with parts boded of particular interest:

ENDING ILLEGAL DISCRIMINATION AND RESTORING MERIT-BASED OPPORTUNITY

Section 1.  Purpose.  Longstanding Federal civil-rights laws protect individual Americans from discrimination based on race, color, religion, sex, or national origin.  These civil-rights protections serve as a bedrock supporting equality of opportunity for all Americans.  As President, I have a solemn duty to ensure that these laws are enforced for the benefit of all Americans. 

Yet today, roughly 60 years after the passage of the Civil Rights Act of 1964, critical and influential institutions of American society, including the Federal Government, major corporations, financial institutions, the medical industry, large commercial airlines, law enforcement agencies, and institutions of higher education have adopted and actively use dangerous, demeaning, and immoral race- and sex-based preferences under the guise of so-called “diversity, equity, and inclusion” (DEI) or “diversity, equity, inclusion, and accessibility” (DEIA) that can violate the civil-rights laws of this Nation.

Illegal DEI and DEIA policies not only violate the text and spirit of our longstanding Federal civil-rights laws, they also undermine our national unity, as they deny, discredit, and undermine the traditional American values of hard work, excellence, and individual achievement in favor of an unlawful, corrosive, and pernicious identity-based spoils system.  Hardworking Americans who deserve a shot at the American Dream should not be stigmatized, demeaned, or shut out of opportunities because of their race or sex.

These illegal DEI and DEIA policies also threaten the safety of American men, women, and children across the Nation by diminishing the importance of individual merit, aptitude, hard work, and determination when selecting people for jobs and services in key sectors of American society, including all levels of government, and the medical, aviation, and law-enforcement communities.  Yet in case after tragic case, the American people have witnessed first-hand the disastrous consequences of illegal, pernicious discrimination that has prioritized how people were born instead of what they were capable of doing.

The Federal Government is charged with enforcing our civil-rights laws.  The purpose of this order is to ensure that it does so by ending illegal preferences and discrimination.

Sec. 2.  Policy.  It is the policy of the United States to protect the civil rights of all Americans and to promote individual initiative, excellence, and hard work.  I therefore order all executive departments and agencies (agencies) to terminate all discriminatory and illegal preferences, mandates, policies, programs, activities, guidance, regulations, enforcement actions, consent orders, and requirements.  I further order all agencies to enforce our longstanding civil-rights laws and to combat illegal private-sector DEI preferences, mandates, policies, programs, and activities.

Sec. 3.  Terminating Illegal Discrimination in the Federal Government.  (a)  The following executive actions are hereby revoked:
(i)    Executive Order 12898 of February 11, 1994 (Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations);
(ii)   Executive Order 13583 of August 18, 2011 (Establishing a Coordinated Government-wide Initiative to Promote Diversity and Inclusion in the Federal Workforce);
(iii)  Executive Order 13672 of July 21, 2014 (Further Amendments to Executive Order 11478, Equal Employment Opportunity in the Federal Government, and Executive Order 11246, Equal Employment Opportunity); and
(iv)   The Presidential Memorandum of October 5, 2016 (Promoting Diversity and Inclusion in the National Security Workforce).

(b)  The Federal contracting process shall be streamlined to enhance speed and efficiency, reduce costs, and require Federal contractors and subcontractors to comply with our civil-rights laws.  Accordingly:
(i)    Executive Order 11246 of September 24, 1965 (Equal Employment Opportunity), is hereby revoked.  For 90 days from the date of this order, Federal contractors may continue to comply with the regulatory scheme in effect on January 20, 2025.
(ii)   The Office of Federal Contract Compliance Programs within the Department of Labor shall immediately cease:
(A)  Promoting “diversity”;
(B)  Holding Federal contractors and subcontractors responsible for taking “affirmative action”; and
(C)  Allowing or encouraging Federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.

(iii)  In accordance with Executive Order 13279 of December 12, 2002 (Equal Protection of the Laws for Faith-Based and Community Organizations), the employment, procurement, and contracting practices of Federal contractors and subcontractors shall not consider race, color, sex, sexual preference, religion, or national origin in ways that violate the Nation’s civil rights laws.

(iv)   The head of each agency shall include in every contract or grant award:
(A)  A term requiring the contractual counterparty or grant recipient to agree that its compliance in all respects with all applicable Federal anti-discrimination laws is material to the government’s payment decisions for purposes of section 3729(b)(4) of title 31, United States Code; and
(B)  A term requiring such counterparty or recipient to certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.
(c)  The Director of the Office of Management and Budget (OMB), with the assistance of the Attorney General as requested, shall:
(i)    Review and revise, as appropriate, all Government-wide processes, directives, and guidance;
(ii)   Excise references to DEI and DEIA principles, under whatever name they may appear, from Federal acquisition, contracting, grants, and financial assistance procedures to streamline those procedures, improve speed and efficiency, lower costs, and comply with civil-rights laws; and
(iii)  Terminate all “diversity,” “equity,” “equitable decision-making,” “equitable deployment of financial and technical assistance,” “advancing equity,” and like mandates, requirements, programs, or activities, as appropriate.

Sec. 4.  Encouraging the Private Sector to End Illegal DEI Discrimination and Preferences. 

(a)  The heads of all agencies, with the assistance of the Attorney General, shall take all appropriate action with respect to the operations of their agencies to advance in the private sector the policy of individual initiative, excellence, and hard work identified in section 2 of this order.

(b)  To further inform and advise me so that my Administration may formulate appropriate and effective civil-rights policy, the Attorney General, within 120 days of this order, in consultation with the heads of relevant agencies and in coordination with the Director of OMB, shall submit a report to the Assistant to the President for Domestic Policy containing recommendations for enforcing Federal civil-rights laws and taking other appropriate measures to encourage the private sector to end illegal discrimination and preferences, including DEI.  The report shall contain a proposed strategic enforcement plan identifying:
(i)    Key sectors of concern within each agency’s jurisdiction;
(ii)   The most egregious and discriminatory DEI practitioners in each sector of concern;
(iii)  A plan of specific steps or measures to deter DEI programs or principles (whether specifically denominated “DEI” or otherwise) that constitute illegal discrimination or preferences.  As a part of this plan, each agency shall identify up to nine potential civil compliance investigations of publicly traded corporations, large non-profit corporations or associations, foundations with assets of 500 million dollars or more, State and local bar and medical associations, and institutions of higher education with endowments over 1 billion dollars;
(iv)   Other strategies to encourage the private sector to end illegal DEI discrimination and preferences and comply with all Federal civil-rights laws;
(v)    Litigation that would be potentially appropriate for Federal lawsuits, intervention, or statements of interest; and
(vi)   Potential regulatory action and sub-regulatory guidance.

Sec. 5.  Other Actions.  Within 120 days of this order, the Attorney General and the Secretary of Education shall jointly issue guidance to all State and local educational agencies that receive Federal funds, as well as all institutions of higher education that receive Federal grants or participate in the Federal student loan assistance program under Title IV of the Higher Education Act, 20 U.S.C. 1070 et seq., regarding the measures and practices required to comply with Students for Fair Admissions, Inc. v. President and Fellows of Harvard College, 600 U.S. 181 (2023).

Sec. 6.  Severability.  If any provision of this order, or the application of any provision to any person or circumstance, is held to be invalid, the remainder of this order and the application of its provisions to any other persons or circumstances shall not be affected thereby.

Sec. 7.  Scope.  (a)  This order does not apply to lawful Federal or private-sector employment and contracting preferences for veterans of the U.S. armed forces or persons protected by the Randolph-Sheppard Act, 20 U.S.C. 107 et seq.
(b)  This order does not prevent State or local governments, Federal contractors, or Federally-funded State and local educational agencies or institutions of higher education from engaging in First Amendment-protected speech.
(c)  This order does not prohibit persons teaching at a Federally funded institution of higher education as part of a larger course of academic instruction from advocating for, endorsing, or promoting the unlawful employment or contracting practices prohibited by this order.

Sec. 8.  General Provisions.  (a)  Nothing in this order shall be construed to impair or otherwise affect:
(i)   the authority granted by law to an executive department, agency, or the head thereof; or
(ii)  the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b)  This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c)  This order is not intended to and does not create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

OFCCP Moves Closer to Requiring Annual AAP Certification by June 30

As the OFCCP moves closer to requiring annual compliance certification from service and supply contractors and subcontractors, last week it unveiled its compliance portal where contractors can submit their affirmative action plans (during a compliance review) and annually certify compliance with their affirmative action obligations.  “The Contractor Portal is a new OFCCP platform where covered contractors must certify whether they are meeting their requirement to develop and maintain annual AAPs.”  The portal will open on February 1, 2022.  The OFCCP has also announced that the certification details (like the content of the certification and public availability of the information) will be available in the portal by March 31, 2022.  “By June 30, 2022, existing contractors must certify whether they have developed and maintained an affirmative action program for each establishment and/or functional unit, as applicable.”

In its User Guide, the OFCCP explains:

Currently, federal contractors submit their AAPs via mail or email. The AAP-VI system will be the primary source for entering, tracking and submitting your Affirmative Action Programs for review by OFCCP. AAP-VI will provide federal contractors a system to submit their Programs in a more efficient manner and provide visibility and reporting capabilities of the data submitted by the Programs.

The impetus for the new program presumably comes from a 2016 GAO report finding that the OFCCP does not effectively track compliance with the affirmative action obligations of the vast number of contractors and subcontractors.

While the specific details of the required contractor certification have not been revealed, there was a sample of a question and certification page for companies seeking to receive a federal contract through the System for Award Management:

Select the checkbox pertaining to the correct SAM statement that best describes your AAP requirements.

o It has developed and maintained affirmative action programs at each establishment, as applicable. See 41 CFR Chapter 60.

o It has been party to a qualifying federal contract or subcontract for 120 days or more and has not developed and maintained applicable affirmative action programs at each establishment, as applicable. See 41 CFR Chapter 60.

o It became a covered federal contractor or subcontractor within the past 120 days and therefore has not yet developed applicable affirmative action programs. See 41 CFR Chapter 60.

New federal contractors have 120 days in which to develop an affirmative action program and 90 days after that in which to certify their compliance.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

EO 13706 Mandates Paid Leave for Federal Contractor Employees in 2017

On Labor Day, President Obama issued Executive Order 13706 (which was published in the Federal Register a few days later) mandating that federal contractors provide paid leave to employees.  Regulations are to be published by the end of the September 2016 and will apply to contractors and subcontractors who receive new federal contracts in 2017.  While employees may accrue one hour of paid leave for every 30 worked (up to 56 hours per year), they may carry over those accrued hours year to year and may reinstate their leave bank upon being rehired within 12 months, but may not be paid out on termination for their accrued leave.   While the leave is entitled “sick” leave, it is actually much broader: the paid leave may cover their own illness, that of their parents, spouses, children and those “or any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship,” and may also use it for diagnostic or preventive medical care, and “domestic violence, sexual assault, or stalking” if the employee needs time off from work in order to seek counseling, relocation, legal action, or assistance from a victim services organization.

The EO prohibits covered employers from taking certain actions:

·        Employees cannot be required to recruit their own replacement;

·        Limiting the amount of paid leave that may be accrued to less than 56 hours per year;

·        Take credits against prevailing wage obligations for this paid leave;

·        Disclosing information from certifications about the employee’s need for medical, family or domestic violence/stalking leave unless required by law or with the employee’s consent; and

·        Discriminating against or interfering with an employee’s right to take paid leave, in asserting paid leave rights or assisting another employee asserting rights under this EO.

Employers will not be required to pay the employee for accrued paid leave upon termination, but is permitted to do so.   The employer’s existing sick leave policy may satisfy the obligations of this EO if it meets all of its terms, applies to all employees, and exceeds any applicable requirements of the Davis-Bacon and Service Contract Acts.  The EO says nothing about any qualifications periods that may be imposed on employees before they may begin accruing paid leave.

The EO does not apply to federal grants or independent agencies (which are only strongly encouraged to comply).

Like the FMLA, employees will have certain obligations:

·        Must make an oral or written request for leave “that includes the expected duration of the leave and is made at least 7 calendar days in advance where the need for the leave is foreseeable, and in other cases as soon as is practicable.”

·        Must provide written certification within 30 days of the employer’s request if the absence is greater than 3 consecutive days.  This certification may be about medical causes or domestic violence/stalking and need only convey the “minimum necessary information” to confirm the reason for the leave.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

 

OFCCP & DOJ Join EEOC In Prohibiting Sexual Orientation and Gender Identity Discrimination

Last Thursday, the U.S. Department of Justice announced that it now interprets Title VII’s prohibition against sex discrimination to include discrimination on the basis of sexual orientation and gender identity.   The DOJ’s interpretation will cover anyone in public employment.   The EEOC has already announced that it interprets Title VII to prohibit discrimination by private employers on the basis of transgendered status, and gender identity and covers lesbian, gay, and bisexual individuals.  On December 9, 2014, the OFCCP published the final rule implementing President Obama’s July 21, 2014 Executive Order 13672, which adds “sexual orientation” and “gender identity” to the affirmative action protected categories (which includes race, sex, and national origin).  However, affirmative action employers will not be required to collect data from applicants or employees concerning their gender identity or sexual orientation nor to conduct statistical analyses of employment actions involving these groups.  The OFCCP regulation becomes effective on April 8, 2015 and will only “apply to Federal contractors who hold contracts entered into or modified on or after April 8, 2015.”

As explained in Attorney General Holder’s Memorandum, this rationale is based not just on Price Waterhouse gender stereotyping, but

encompasses discrimination based on gender identity, including transgender status. The most straightforward reading of Title VII is that discrimination "because of ... sex" includes discrimination because an employee's gender identification is as a member of a particular sex, or because the employee is transitioning, or has transitioned, to another sex. As the Court explained in Price Waterhouse, by using "the simple words 'because of,' ... Congress meant to obligate" a Title VII plaintiff to prove only "that the employer relied upon sex-based considerations in coming to its decision." 490 U.S. at 241-242. It follows that, as a matter of plain meaning, Title VII' s prohibition against discrimination "because of ... sex" encompasses discrimination founded on sex-based considerations, including discrimination based on an employee's transitioning to, or identifying as, a different sex altogether. Although Congress may not have had such claims in mind when it enacted Title VII, the Supreme Court has made clear that Title VII must be interpreted according to its plain text, noting that "statutory prohibitions often go beyond the principal evil to cover reasonably  comparable evils, and it is ultimately the provisions of our laws rather than the principal concerns of our legislators by which we are governed." Oncale v. Sundowner Offshore Servs., 523 U.S. 75, 79 (1998).

The affirmative action regulations were amended by placing “sexual orientation, gender identity,” between “sex” and “ or national origin” in several places, but most especially in 41 C.F.R.  part 60-1. 

Contractors satisfy this obligation by including the updated Equal Opportunity Clause in new or modified subcontracts and purchase orders, ensuring that applicants and employees are treated without regard to their sexual orientation and gender identity, and by updating the equal opportunity language used in job solicitations and posting updated notices.

The terms were also inserted in the provision prohibiting discrimination or preferences.  The terms were not inserted into other regulations governing the content of affirmative action plans and the requirements to collect and analyze data:

This final rule makes no changes to the provisions governing reporting and information collection set forth at 41 CFR 60–1.7 and 60–1.12(c). The obligations updated by this final rule are separate from the additional affirmative action requirements set forth in 41 CFR parts 60–2 and 60–4 that comprise the contents of contractors’ written affirmative action programs. No changes are being made to the written affirmative action program requirements of 41 CFR part 60–2, or the affirmative action requirements contained in § 60– 4.3(a)(7) of 41 CFR part 60–4, and thus those programs will continue to be limited to gender, race, and ethnicity. While the terms ‘‘sexual orientation’’ and ‘‘gender identity’’ will now appear in two sections within part 60–2 that include the full list of protected bases (in §§ 60–2.16(e)(2) and 60–2.35), the final rule does not require contractors to set placement goals on the bases of sexual orientation or gender identity, nor does it require contractors to collect and analyze any data on these bases. Section 60–2.16(e)(2) simply states that placement goals for women and minorities under the existing regulations may not be used as a basis for discrimination on one of the bases protected by EO 11246, including sexual orientation and gender identity. 

The final rule and the Executive Order do not create exemptions for religious organizations which are also federal contractors, except to permit them to favor members of their own religion.  Because Congress has refused to enact non-discrimination legislation which covers gender identity or sexual orientation, the Executive Branch has elected to prohibit discrimination on these basis without legislative support.

 NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

OFCCP Proposes to Require Most Federal Contractors To Submit Aggregate Wage and Working Hours Data to Supplement EEO-1

On Friday, the Office of Federal Contract Compliance Programs is scheduled to public a Notice of Proposed Rulemaking in the Federal Register amending 41 C.F.R. § 60-1.7 to require most federal contractors (i.e., those with more than 100 employees and a federal government contract or subcontract of at least $50,000) to report aggregate data on hours worked and W-2 wages to supplement the already mandatory EEO-1 report.   This new Equal Pay Report “would require the submission of summary data on employee compensation by sex, race, ethnicity, specified job categories, and other relevant data points such as hours worked, and the number of employees.”  OFCCP contends that it will “collect and analyze contractor summary compensation data to establish objective industry standards for identifying potential discrimination in employee compensation.6 OFCCP will use these standards to determine which contractors it will prioritize and schedule for compliance evaluations. This prioritization will be based on the amount of difference or variance between a contractor’s pay standards when compared to the appropriate industry standards.”    It also plans to share the aggregate compensation data by industry with the public.

 As OFCCP explains in the Notice: 

The requirements in Executive Order 11246 generally apply to any business or organization that: (1) holds a single Federal contract, subcontract, or Federally assisted construction contract in excess of $10,000; (2) has Federal contracts or subcontracts with a combined total exceeding $10,000 in any 12-month period; or (3) holds Government bills of lading or serve as a depository of federal funds . . .  Generally the contractors already required to prepare written AAPs.

The new requirement will not apply to all government contractors and subcontractors.  It is meant to primary cover contractor who are already required to prepare a written affirmative action plan.  The employer must” have more than 100 employees, and a contract, subcontract, or purchase order amounting to $50,000 or more that covers a period of at least 30 days, including modifications.”  The new reporting requirement will add “two columns of additional information to the EEO-1 Report in a new Equal Pay Report to OFCCP” that generally must be submitted electronically. In particular, the new form would collect the following information:

·        the total number of workers within a specific EEO-1 job category by race, ethnicity and sex;

·       total W-2 earnings defined as the total individual W-2 earnings for all workers in the job category by race, ethnicity, and sex; and

·       total hours worked defined as the total number of hours worked for all workers in the job category by race, ethnicity and sex.

The time frames of the demographic data in the EEO-1 and the new pay data in the Equal Pay Report will be different, with the demographic data being based on a single payroll between July and September, while the payroll information covers the prior calendar year.  OFCCP proposes that contractors amend the earlier EEO-1 report with compensation data by March 31 of the following year, or suggest that the EEOC permit a single report to be filed at the end of March in order to have a single reporting period.

Contractors would be required to keep their Equal Pay Reports for a period of not less than two years from the date of the making of the report. However, if the contractor has fewer than 150 employees or does not have a contract of at least $150,000, this retention period is one year.

While W-2 payroll data may be readily available for most employers, calculating hours of work may be more problematic for exempt employees since there is no FLSA requirement to track those hours.   OFCCP proposes calculating hours worked as follows: 

·        For salaried workers, contractors should provide actual hours of work ifthe contractor records actual hours. This is required for nonexempt employees but is not required for exempt employees. If contractors do not have actual hours worked data, they may default to 2080 for full-time and 1040 for part-time.

·       For hourly workers, actual hours of work.

·       Reported hours may also be adjusted for part year work using date of hire or dates of leave as well, but this is not specifically required.

 

The proposed regulation, as it is proposed to be amended, would read as follows:

 

§ 60-1.7 Reports and other required information.

(a) EEO-1 Report.

(1) Each prime contractor and subcontractor shall file annually, on or before September 30, complete and accurate reports on Standard Form 100 (EEO– 1) promulgated jointly by the Office of Federal Contract Compliance Programs and the Equal Employment Opportunity Commission (EEOC), or such form as may hereafter be promulgated in its place, if such prime contractor or  subcontractor—

(i) Is not exempt from the provisions of these regulations in accordance with §60–1.5;

(ii) Has 50 or more employees;

(iii) Is a prime contractor or first tier subcontractor; and

(iv) Has a contract, subcontract or purchase order amounting to $50,000 or more or serves as a depository of Government funds in any amount, or is a financial institution which is an issuing and paying agent for U.S. savings bonds and savings notes [but on the Treasury Department issues savings bonds these days];

(2) Provided, That any subcontractor below the first tier that performs construction work at the site of construction shall be required to file such a report if it meets the requirements of criteria specified in paragraph (a)(1) of this section.

(3) Each contractor required under paragraph (a)(1) of this section to file the EEO-1 Report(s) must submit a copy of its most recently filed report(s) to the contracting or administering agency within 30 days after the award of a contract, unless the contractor has submitted its EEO-1 Report(s) to the contracting or administering agency within 12 months preceding the date of the award.

(b) Equal Pay Report. (1) The Equal Pay Report, promulgated by OFCCP, requires contractors and subcontractors with more than 100 employees to provide summary data on the compensation paid to employees by sex, race, ethnicity, specified job categories, and other relevant data points. Contractors must submit the Equal Pay Report in the format and manner required by OFCCP.

(2) Who must file the Equal Pay Report. The Equal Pay Report must be filed by each prime contractor and first tier subcontractor that is required under paragraph (a)(1) of this section to file the EEO-1 Report(s) with the Joint Reporting Committee that has more than 100 employees, and a contract, subcontract, or purchase order amounting to $50,000 or more that covers a period of at least 30 days, including modifications.

(3) How, when, and where to file the Equal Pay Report. (i) The Equal Pay Report must be filed by the date specified in the report.

(ii) Each contractor must submit the Equal Pay Report electronically through OFCCP’s web-based filing system by the specified filing deadline, unless the contractor has been granted a hardship exemption under paragraph (b)(3)(iii) of this section.

(iii) The Director may grant a hardship exemption from the requirement to submit the Equal Pay Report electronically where he or she concludes that electronic filing would impose an undue hardship on the contractor. Requests for hardship exemptions are only considered upon the written request of the contractor. The eligibility criteria and application procedures for the hardship exemption are available on the OFCCP website.

A contractor granted a hardship exemption must submit the Equal Pay Report in the format specified in the notification granting the exemption.

(4) Confidentiality of the Equal Pay Report. (i) OFCCP will treat information contained in the Equal Pay Report as confidential to the maximum extent the information is exempt from public disclosure under the Freedom of Information Act, 5 U.S.C. 552. It is the practice of OFCCP not to release contractor data where:

(A) The contractor is still in business; and

(B) The contractor indicates, and through the Department of Labor’s review process it is determined, that the data are confidential and sensitive and that the release of

data would subject the contractor to commercial harm.

(ii) OFCCP may publish aggregate information based on compensation data

collected from the Equal Pay Report, such as ranges or averages by industry, labor market, or other groupings, but only in such a way as not to reveal any particular establishment’s or individual employee’s data.

(c) Additional information. The Director or the applicant, on their motions, may require a contractor to keep employment or other records and to furnish, in the form requested, within reasonable limits, such additional information about its employment practices as the Director or the applicant deems necessary for the administration of the Order. In accordance with the existing obligations in 41 CFR 60-1.12(a), each contractor shall retain its Equal Pay Report for a period of not less than two years from the date of the making of the report. However, if the contractor has fewer than 150 employees or does not have a contract of at least $150,000, this retention period is one year.

(d) Requirements for bidders or prospective contractors—

(1) Certifications and representations of compliance with the requirements of Executive Order 11246 and its implementing regulations. Each agency shall require each bidder or prospective prime contractor and proposed subcontractor, where appropriate, to represent by a statement in the bid or in writing at the outset of negotiations for the contract:

(i) Whether it has participated in any previous contract or subcontract subject to the Equal Opportunity Clause in § 60-1.4(a);

(ii) Whether it is currently required to develop affirmative action programs as prescribed under the regulations in this chapter and to file reports set forth in this section;

(iii) And, if so, whether it developed the affirmative action programs;

(iv) Whether it has filed with the Joint Reporting Committee all reports due under the applicable filing requirement; and

(v) Whether it currently holds a Federal contract or subcontract that requires the filing of an Equal Pay Report(s) with OFCCP, and whether it filed an Equal Pay Report with OFCCP for the most recent reporting period, as prescribed by paragraph (b) of this section.

(2) Additional information. A bidder or prospective prime contractor or proposed subcontractor shall be required to submit such information as the Director requests prior to the award of the contract or subcontract. When a determination is made to award the contract or subcontract to a specific contractor, that contractor shall be required, prior to award, or after the award, or both, to furnish such other information as the applicant or the Director requests.

(e) Sanctions for failure to file required reports, and certifications and representations.

Failure to file timely, complete and accurate reports, and certifications and representations as required under this section constitutes a violation of Executive Order 11246 and its implementing regulations that may subject the contractor to the sanctions identified in paragraph (6) of the Equal Opportunity clause in §§ 60-1.4(a) and (b) and 60-1.27.

(f) Use of reports. Reports filed pursuant to this section shall be used only in connection with the administration of Executive Order 11246, the Civil Rights Act of 1964, or in furtherance of the purposes of the Order and the Act.

 

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

President Obama Issues Executive Order Barring Large Federal Contractors from Using Certain Pre-Dispute Arbitration Agreements and Requiring Reporting of Employment and Labor Violations

This morning, President Obama signed a new Executive Order which applies only to federal contractors with contracts in excess of $500,000.   Where the value of the goods or services being procured are expected to exceed $500,000, the contractor will be required to disclose any arbitration, court or agency awards, judgments or determinations concerning violations of, for instance, the FMLA, E.O. 11246 (aka affirmative actions requirements for women and minorities), the NLRA, the FLSA, OSHA, the FMLA, the Rehabilitation Act, Title VII, the ADA, the ADEA, Vietnam Era Veterans Readjustment Act and equivalent state laws.  These contractors will be required to update this information every six months and require their subcontractors to do likewise.  The DOL has been tasked with developing regulations about defining and creating consequences for repeated and serious violations.  

In addition, where the value of goods or services being procured exceeds $1M, the contractor is prohibited from using pre-dispute arbitration agreements with employees or contractors to govern disputes arising under Title VII or concerning or “any tort related to or arising out of sexual assault or harassment.” This requirement will not apply to collective bargaining agreements, pre-existing agreements, or where the employer provides commercially available off-the-shelf items.

Finally, the Executive Order requires the provision of pay stub information to the contractors with contracts in excess of $500,000:

Paycheck Transparency.  (a)  Agencies shall ensure that, for contracts subject to section 2 of this order, provisions in solicitations and clauses in contracts shall provide that, in each pay period, contractors provide all individuals performing work under the contract for whom they are required to maintain wage records under the Fair Labor Standards Act; 40 U.S.C. chapter 31, subchapter IV (also known as the Davis-Bacon Act); 41 U.S.C. chapter 67 (also known as the Service Contract Act); or equivalent State laws, with a document with information concerning that individual's hours worked, overtime hours, pay, and any additions made to or deductions made from pay.  Agencies shall also require that contractors incorporate this same requirement into subcontracts covered by section 2 of this order.  The document provided to individuals exempt from the overtime compensation requirements of the Fair Labor Standards Act need not include a record of hours worked if the contractor informs the individuals of their overtime exempt status.  These requirements shall be deemed to be fulfilled if the contractor is complying with State or local requirements that the Secretary of Labor has determined are substantially similar to those required by this subsection.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

President Obama Expands Affirmative Action Obligations to Include Sexual Orientation and Gender Identity

This morning, President Obama amended two executive Orders to include sexual orientation and gender identity protection for federal government employees and employees of federal contractors and subcontractors subject to affirmative action obligations.  Of note for private sector employees, sexual orientation and gender identity are given the same protection under Executive Order 11246 as sex, race and national origin.  The Department of Labor has been instructed to promulgate regulations within 90 days that will take effect in 2015 for affirmative action employers.    It remains to be seen if affirmative action employers will be required to track the applications and employment status, to establish goals and to conduct adverse impact analysis of these newly covered employees the same  extent as they are currently required to do for sex, race, disability and veteran status.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

VETS Proposes New Regulations to Comply with OFCCP Regulations and Decrease Work for Employers

On Monday, the Federal Register contained a Notice of Proposed Rule Making published by the Veterans' Employment and Training Service (VETS) “to propose revisions to the regulations implementing the reporting requirements under the Vietnam Era Veterans' Readjustment Assistance Act of 1974, as amended, (“VEVRAA”).”  Essentially, the proposed rule intends to simplify the reporting requirements of federal contractors to be consistent with the new affirmative action regulations published by the OFCCP (and which take effect next month).  Among other things, the proposed new rule officially eliminates the VETS-100 form, rescinds the regulations at 41 C.F.R. 61-250, and renames the VETS-100A form the Vets-4212 form.   The VETS 4212 form would also begin using the terms as defined in the new OFCCP regulations (which are discussed in more detail below).  In addition, the new regulations would cease requiring employers to collect hiring information on each sub-category of protected veteran because, among other things, some veterans qualify in more than one category.   Thus, the new regulation would eliminate double counting and eliminate the possible, inadvertent identification of disabled veterans, etc.  By the time the regulations become effective in 2015, employers would only need to collect information for the re-defined “protected veteran,” instead of in each sub-category.

A number of definitions for the various sub-groups of statutorily protected or covered veterans have changed over the years to include more than merely Vietnam  veterans.  They are changing again.  First, “other protected veteran” is being changed to “active duty wartime or campaign badge veteran.”  In 1998, the Veterans Employment Opportunity Act of 1998 (VEOA) amended VEVRAA by extending protection to the category of veterans “who served on active duty in the U.S. military, ground, naval, or air service during a war or in a campaign or expedition for which a campaign badge has been authorized under the laws administered by the Department of Defense.” Initially, both the VETS and OFCCP regulations implementing the VEOA amendments adopted the term “other protected veteran” to refer to the veterans belonging to this category.  However, OFCCP's most recent regulations replace the term “other protected veteran” with “active duty wartime or campaign badge veteran” because the term “other protected veteran” was understandably being misinterpreted as a “catch-all” that includes all veterans rather than shorthand for the category of veterans who served on active duty during a war or in a campaign for which a campaign badge has been authorized. VETS proposed new rule is making a similar change.

Second, “covered veteran” is being changed to “protected veteran.”  Currently, “covered veteran” means  “a veteran in any of the four categories defined in the section—disabled veteran, other protected veteran, Armed Forces service medal veteran, and recently separated veteran.”  However, the new OFCCP regulations decided to use essentially that definition to apply to “protected veteran” and VETS wants to be consistent.   To be clear, “protected veteran” will now mean “a veteran who may be classified as a disabled veteran, recently separated veteran, active duty wartime or campaign badge veteran, or an Armed Forces service medal veteran.”  By the time the new VETS-2414 form becomes effective in 2015, employers will only need to collect hiring information on the newly defined “protected veteran.”

In the meantime, however, employers still have the VETS-100A form to use and OFCCP’s new regulation, which takes effect on March 24, 2014.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

OFCCP Publishes Mandatory Self-Identification Form for Applicants and Employees With Disabilities

This week, the OFCCP finally released its final version of the self-identification form for applicants and employees with disabilities.  Unlike the self-identification form for women and minorities, employers are required by 41 C.F.R. §60-741.42(b) to use the OFCCP’s version of the form and its exact language. Employers are required to invite applicants to voluntarily self-identify their disabilities at the same time that they invite applicants to self-identify their gender and race. (This might be after an initial screening to determine that the applicant fulfills the basic prerequisites of the job or after a batch of unsolicited resumes have been screened).  Employers are also required to invite applicants to voluntarily self-identify their disabilities “[a]t any time after the offer of employment, but before the applicant begins his or her job duties.”  Finally, employers are also required to invite employees to self-identify their disabilities every five years and to remind them at least once during intervening years. (After all, disability status may change over time).

When the form was initially proposed, OFCCP received many comments objecting to the use of a mandatory form, rather than permitting employers to fashion their own invitation to self-identify.  OFCCP responded in September (when it published the final regulation for the Rehabilitation Act affirmative action requirements):

 

OFCCP believes that the use of uniform language is needed to ensure consistency in all self identification invitations, and to reassure individuals with disabilities that the self-identification request is routine and executed pursuant to obligations created by OFCCP. Standardized language will also minimize any burden to contractors associated with this responsibility, and will facilitate contractor compliance.

The form is two pages because OFCCP elected to include the following language about an employer’s obligation to provide reasonable accommodations:

Federal law requires employers to provide reasonable accommodation to qualified individuals with disabilities.  Please tell us if you require a reasonable accommodation to apply for a job or to perform your job.  Examples of reasonable accommodation include making a change to the application process or work procedures, providing documents in an alternative format, using a sign language interpreter, or using specialized equipment.

Contractors may delay utilizing the new self-identification form until the commencement of their next plan year after March 24.   The new form is part of Subsection C in the new rules. As explained by the OFCCP when the final rule was published in September:

Although this final rule becomes effective 180 days after publication, full compliance with the requirements of this final rule by current contractors will be phased in as follows. Current contractors subject to subpart C of the existing 41 CFR part 60–741 regulations that have written affirmative action programs (AAP) prepared pursuant to those regulations in place on the effective date of this final rule may maintain that AAP for the duration of their AAP year. Such contractors are required to update their affirmative action programs to come into compliance with the requirements of subpart C of this final rule at the start of their next standard 12-month AAP review and updating cycle. OFCCP will verify compliance with the requirements of this final rule when a contractor is selected for a compliance evaluation pursuant to § 60–741.60 or subject to a complaint investigation pursuant to § 60–741.61. (bolding added for emphasis).

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

OFCCP Publishes New Affirmative Action Regulations Covering Protected Veterans

As most readers know, the Office of Federal Contract Compliance Programs (OFCCP) yesterday published in the Federal Registrar revisions to the current implementing regulations of the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended by the Jobs for Veterans Act of 2002, (VEVRAA). OFCCP is responsible for enforcement of VEVRAA, which prohibits employment discrimination against protected veterans by covered Federal contractors and subcontractors and requires each covered Federal contractor and subcontractor to take affirmative action regarding these veterans. “The universe of protected veterans includes disabled veterans, veterans who have separated from the military within the past three years (recently separated veterans), veterans who received an Armed Forces service medal while on active duty, and veterans who served in active duty during a war or in a campaign or expedition for which a campaign badge was authorized.“ These regulations become effective on March 24, 2014 and apply to affirmative action plans with plan years that begin after that date.  I summarized the Rehabilitation Act regulations yesterday.  Today, I’ll focus on the affirmative action requirements for protected veterans.  As with the Rehabilitation Act regulations, the new VEVRAA regulations suggest a new national hiring “benchmark” – 8% -- for employing protected veterans in each job group, although contractors are given some leeway to establish their own benchmarks (unlike with the Rehabilitation Act regulations).  Contractors will now be required to conduct annual analyses, etc. concerning their hiring and utilization of veterans.  Accordingly, affirmative action employers will need to substantially revise their affirmative action plans for disabled and veterans in order to comply with the new rules.

The existing VEVRAA regulations are split into two separate parts: 41 CFR part 60–250 (part 60–250) and 41 CFR part 60–300 (part 60–300). Part 60–250 applies to any Government contract or subcontract of $25,000 or more entered into before December 1, 2003. The threshold amount for coverage is a single contract of $25,000. Yesterday’s revisions to the VEVRAA regulations rescind the regulations at part 60–250, except that it retains protection for veterans who were covered by that regulation.    Part 60–300 applies to any Government contract or subcontract of $100,000 or more entered into on or after December 1, 2003. The amount for VEVRAA and AAP threshold coverage is a single contract of $100,000 or more.  Federal contractors and subcontractors which meet that coverage threshold and have 50 or more employees must develop a written AAP.

Hiring and Utilization Benchmarks.  One of the most significant changes is that contractors will now be required to annually establish a hiring “benchmark.”  A benchmark is a lesser standard than the “goal” used in 11246 plans for minorities and women.  Contractors will have the option of calculating their own benchmark from a variety of information sources, or using the benchmark published on the OFCCP’s website (which is currently at 8%). OFCCP recognizes that precise and statistically meaningful data demonstrating the availability of protected veterans which is similar to the information used to calculate the availability and establish goals for women and minority under the EO 11246 program does not exist. Accordingly, contractors “will not be cited for violations solely for failing to meet the benchmarks they set.”

Contractors will not be subject to an enforcement action or found to be in violation of the VEVRAA regulations for failing to meet the benchmark. Hiring preferences are not required, the rule does not state that contractors will be expected to achieve benchmarks, and the VEVRAA rule does not prescribe actions the contractor must take if the benchmark is not achieved.

The hiring benchmarks may be calculated under the new regulation by taking into account the following factors:

 

 (i) The average percentage of veterans in the civilian labor force in the State(s) where the contractor is located over the preceding three years, as calculated by the Bureau of Labor Statistics and published on the OFCCP Web site;

(ii) The number of veterans, over the previous four quarters, who were participants in the employment service delivery system in the State where the contractor is located, as tabulated by the  Veterans’ Employment and Training Service and published on the OFCCP Web site;

(iii) The applicant ratio and hiring ratio for the previous year, based on the data collected pursuant to § 60– 300.44(k);

(iv) The contractor’s recent assessments of the effectiveness of its external outreach and recruitment efforts, as set forth in § 60–300.44(f)(3); and

(v) Any other factors, including but not limited to the nature of the contractor’s job openings and/or its location, which would tend to affect the availability of qualified protected veterans.

Self-identification.  Another one of the next most significant changes is that contractors will now be required to invite employees and applicants to voluntarily self-identify their “protected veteran status.” The invitation should be extended at the same time that applicants are invited to self-identify as women or minorities.  In addition, as is currently required, contractors which are required to file a VETS-100A form must again invite candidates to self-identify after a job offer has been extended, but the post-offer invitation will require more specification about the type(s) of protected veteran the employee is.  As with other affirmative action self-identification solicitations, responding is purely voluntary and the information must be kept confidential. Sample self-identification forms are included in Appendix B to the regulations.

Once this data is collected, the contractor will be expected to analyze it during an annual audit to determine the effectiveness of its affirmative action program, recruitment and outreach efforts:

 

The contractor shall document each evaluation, including at a minimum the criteria it used to evaluate the effectiveness of each effort and the contractor’s conclusion as to whether each effort was effective. Among these criteria shall be the data collected pursuant to paragraph (k) of this section for the current year and the two most recent previous years.

In the past, contractors have been required to make the entire AAP for disabled and veterans available for inspection upon request to applicants and employees, unlike the 11246 plans.  However, now that employers will be required to analyze utilization goals, critique their efforts and utilize other metrics which may involve confidential employee data, the new regulation permits employers to withhold those portions of the AAP which includes “the data metrics required by § 60–300.44(k)” [the analysis of the self-identification data].

Job listings. It has long been a statutory requirement that covered contractors list all job openings [except for executive and senior management, jobs filled with only internal candidates and jobs lasting three days or less] with “the appropriate employment service delivery system’’ (ESDS).  The new regulations  require such listings to be made ‘‘in a manner and format permitted by” the ESDS.  Moreover, contractors will now be required to notify the ESDS that it is a covered federal contractor:

it shall advise the [ESDS] in each state where it has establishments that: (a) It is a Federal contractor, so that the employment service delivery systems are able to identify them as such; and (b) it desires priority referrals from the state of protected veterans for job openings at all locations within the state. The contractor shall also provide to the employment service delivery system the name and location of each hiring location within the state and the contact information for the contractor official responsible for hiring at each location. The ‘‘contractor official’’ may be a chief hiring official, a Human Resources contact, a senior management contact, or any other manager for the contractor that can verify the  information set forth in the job listing an receive priority referrals from employment service delivery systems.  . . .  The disclosures required by this paragraph shall be made simultaneously with the contractor’s first job listing at each employment service delivery system location after the effective date of this final rule.   Should any of the information in the disclosures change since it was last reported to the [ESDS] location, the contractor shall provide updated information simultaneously with its next job listing.  . . .  The contractor may advise the employment service delivery system when it is no longer bound by this contract clause.

Audit and Reporting Systems.  Once this data is collected, the contractor will be expected to analyze it during an annual audit to determine the effectiveness of its affirmative action program and outreach efforts.  In particular, the new regulation provides as follows:

The contractor shall document the following computations or comparisons pertaining to applicants and hires on an annual basis and maintain them for a period of three (3) years:

(1) The number of applicants who self-identified as protected veterans pursuant to § 60–300.42(a), or who are otherwise known as protected veterans;

(2) The total number of job openings and total number of jobs filled;

(3) The total number of applicants for all jobs;

(4) The number of protected veteran applicants hired; and

(5) The total number of applicants hired.

In addition, the contractor will be required to document the following auditing actions and maintain those records for three years:

The contractor shall design and implement an audit and reporting system that will:

(i)               Measure the effectiveness of the contractor’s affirmative action program;

(ii)             Indicate any need for remedial action;

(iii)           Determine the degree to which the contractor’s objectives have been attained;

(iv)            Determine whether known protected veterans have had the opportunity to participate in all company sponsored educational, training, recreational and social activities;

(v)             Measure the contractor’s compliance with the affirmative action program’s specific obligations;

             . . . .

Compliance Officers will not be using the applicant and hiring data to conduct underutilization or impact ratio analyses, as is the case under the Executive Order, and enforcement actions will not be brought solely on the basis of statistical disparities between veterans and non-veterans in this data.

Advertising and Solicitations.  Contractors will now be required to add the word, “protected veteran status” to their EEO statement in job advertisements and solicitations.  For instance, contractors now need to say: ‘‘all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, disability, protected veteran status or national origin.’’

Federal contracts and subcontracts.  Contractors will be required to include the following clause – in bold typeface --  in all of their covered subcontracts and purchase orders in excess of $100,000:

This contractor and subcontractor shall abide by the requirements of 41 CFR 60–300.5(a). This regulation prohibits discrimination against qualified protected veterans, and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified protected veterans.’’

Record Retention.  The new regulations extend the document retention period to three years.

Internal dissemination of affirmative action policy.  The new rule also makes mandatory certain actions to disseminate the policy among the workforce:

The contractor shall implement and disseminate this policy internally as follows: (i) Include it in the contractor’s policy manual or otherwise make the policy available to employees; (ii) If the contractor is party to a collective bargaining agreement, it shall notify union  officials and/or employee representatives to inform them of the contractor’s policy, and request their cooperation;

While these are the most salient changes, the devil is in the details.  All covered contractors are recommended to read the new rule and explanatory comment in detail.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.