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.

OFCCP Enacts New Affirmative Action Rules Covering Qualified Individuals With Disabilities

Today, the OFCCP published new regulations in the Federal Register concerning the affirmative action requirements of government contractors and subcontractors concerning the disabled and special veterans.  These regulations become effective on March 24, 2014 and apply to affirmative action plans with plan years that begin after that date.   Today, I’ll focus on the affirmative action requirements for the disabled under section 503 of the Rehabilitation Act and will describe the new veteran requirements tomorrow.   As has been previously publicized, the OFCCP will now for the first time begin requiring contractors to invite disabled and veteran applicants to self-identify during the application/pre-offer process (instead of just during the post-offer phase) and to use utilization goals, much as contractors are now required with women and minorities.  However, OFCCP will set the utilization goals instead of permitting the contractors to establish their own specific goals based on the availability of qualified  individuals in the relevant population of the reasonable recruitment area based on the last census.  In particular, OFCCP expects all contractors to meet a 7% nationwide utilization goal for disabled employees in each work group, or for employers with less than 100 employees, a 7% utilization goal for the entire workforce.  Contractors will also be required every 5 years to invite incumbent employees to self-identify their disabilities as that information sometimes changes over time.  OFCCP will also expect prime contractors to utilize more specific language in their contracts to educate their subcontractors about their responsibilities.  Finally, the new regulation updates the OFCCP rules to be consistent with the new requirements in, and regulations promulgated by the EEOC under, the ADAA.   Today’s Federal Register republishes 41 C.F.R. part 60-741 in its entirety and contains a section by section summary of every change created by the new rules.  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.

National Utilization Goal.  The most significant change in the Rehabilitation Act regulations is that the new rule adopts a 7% national goal for the employment of qualified disabled individuals by government contractors and subcontractors within each job group.  There is a lot of room to criticize the OFCCP’s approach.  The census does not measure this information and the American Community Survey understates the number of individuals covered by the Rehabilitation Act.  Therefore, the OFCCP increased the percentage of disabled individuals revealed by the ACS survey to compensate for the understatement.  As explained by the OFCCP:

The [ACS] estimates are not statistically significant when broken down to the degree of detail required by the supply and service goals framework. Contractors therefore would not be able to use the job groups established under Executive Order 11246 to establish goals for individuals with disabilities, and would often be unable to utilize the geographic recruitment areas established under the Executive Order when determining the availability of individuals with disabilities (as queried in the ACS).

                 . . .

we used the mean across these EEO–1 groups to estimate that 5.7 percent of the civilian labor force has a disability as defined by the ACS.

                . . . .

OFCCP recognizes that the 7 percent figure is less precise than the geographically specific availability information that contractors are familiar with under the Executive Order 11246 program, and that for some jobs in some locations availability of qualified individuals may be less than 7 percent.  . . . . Because the goal is intended solely as a tool, the final rule clearly states that a failure to meet the goal will not, in and of itself, result in a violation of section 503 or a finding of discrimination.

Despite the obvious shortcomings (which is likely to lead to litigation), the OFCCP is implementing a national “round” goal of 7% to avoid the implication of a “false level of precision.”  As described by the OFCCP:

the final rule clarifies  . . .  what contractors must do when the goal is not met. More specifically, the final rule identifies steps for the contractor to take to ascertain whether there are impediments to equal employment opportunity and, if impediments are found, to correct any identified problems. If no impediments are identified, then no corrective action is required. The goal is not a rigid and inflexible quota which must be met, nor is it to be considered either a ceiling or a floor for the employment of particular groups.

Moreover, the final rule creates an exception for small employers which “ permits contractors with a total workforce of 100 or fewer employees to apply the 7 percent goal to their entire workforce as a whole, rather than to each job group.”

 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 § 60–741.44(k)” [the analysis of the self-identification data].

Self-identification.  The next most significant change is that contractors will now be required to invite employees and applicants to voluntarily self-identify their disability status on a standard OFCCP-designed form. 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 must again invite candidates to self-identify after a job offer has been extended and then invite employees to change or self-identify their disability every five years.   Thing is, OFCCP still hasn’t designed the applicant self-identification form and says that once it does, it will post it on its website.   As with minorities and women, contractors will be permitted to identify applicants and employees as disabled even when the employees or applicants do not voluntarily self-identify when “(1) The disability is  obvious (e.g., someone is blind or missing a limb) or (2) the disability is known to the contractor (e.g., an individual says that he or she has a disability or requests reasonable accommodation for a disability).” As with information about women and minorities,

disability demographic information must be kept confidential and maintained in a data analysis file. Such information may not be included in an individual’s personnel file. Contractors are also reminded that they may not guess or speculate when identifying an individual as having a disability. Nor may they assume that an individual has a disability because he or she ‘‘looks sickly’’ or behaves in an unusual way.

Notably, contractors are also not required to maintain the self-identification information in the employee’s confidential medical file because OFCCP wants the information to be available to the contractor to conduct utilization analyses, etc.

Once this data is collected, the contractor will be expected to analyze it during its annual audit to determine the effectiveness of its affirmative action program and outreach efforts.  As explained by the OFCCP, “the final rule requires that contractors need only collect and maintain the raw data regarding the number of applicants with disabilities, the total number of job openings and jobs filled, the total number of applicants, the number of applicants with disabilities hired, and the total number of applicants hired.”        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 individuals with disabilities pursuant to § 60–741.42(a), or who are otherwise known to be individuals with disabilities;

(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 applicants with disabilities hired; and

(5) The total number of applicants hired.

                . . .

Officers will not be using the applicant and hiring data to conduct underutilization or impact ratio analyses, as is the case under Executive Order 11246, and enforcement actions will not be brought solely on the basis of statistical disparities between individuals with, and without, disabilities in this data. Rather, Compliance Officers will look to see whether the contractor has fulfilled its various obligations under § 60–741.44, including its obligation, pursuant to § 60–741.44(f)(3), to critically  analyze and assess the effectiveness of its recruitment efforts, using the data in paragraph (k) and any other reasonable criteria the contractor believes is relevant, and has pursued different or  additional recruitment efforts if the contractor concludes that its efforts were not effective.

Reasonable Accommodation Procedures.  While the OFCCP recommends that employers utilize written reasonable accommodation procedures as a best practice, it ultimately elected to not require the adoption of such policies and procedures in writing as it had previously proposed.  A sample policy is attached to the final rule as Appendix B.

Advertising and Solicitations.  Contractors will now be required to add the word "disability” 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 or national origin.’’

Federal contracts and subcontracts.  Contractors will be required to include the following clause in all of its covered contracts and purchase orders in excess of $10,000,:

This contractor and subcontractor shall abide by the requirements of 41 CFR 60– 741.5(a). This regulation prohibits discrimination against qualified individuals on the basis of disability, and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified individuals with disabilities.’’

Assessment of external outreach and recruitment efforts. Contractors will also be required  on an annual basis to evaluate their affirmative action efforts over the last three years and to maintain their analytic records for three years:

The contractor shall, on an annual basis, review the outreach and recruitment efforts it has taken over the previous twelve months to evaluate their effectiveness in identifying and recruiting qualified individuals with disabilities. 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. The contractor’s conclusion as to the effectiveness of its outreach efforts must be reasonable as determined by OFCCP in light of these regulations. If the contractor concludes the totality of its efforts were not effective in identifying and recruiting qualified individuals with disabilities, it shall identify and implement alternative efforts listed in paragraphs (f)(1) or (f)(2)of this section

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 a party to a collective bargaining agreement, it shall notify union officials and/or employee representatives of the contractor’s policy and request their cooperation;

While these are the most salient changes, the devil is in the details.  All 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.