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.

OFCCP Revises Sex Discrimination Regulation for Government Contractors for First Time Since 1970

On Wednesday, the OFCCP formally promulgated a final regulation governing government contractor obligations under Executive Order 11246 concerning sex discrimination.  It will become effective on August 15.  It was the first time it had substantively revised the regulation since 1970.  As part of this final rule, OFCCP has also replaced a significant part of the Guidelines at 41 C.F.R. 60-20.  OFCCP has not eliminated that Uniform Guidelines on Employee Selection Procedures, but has added an Appendix of “Best Practices.” 

As the OFCCP explained its objective:

OFCCP replaces in significant part the Guidelines at part 60–20 with new sex discrimination regulations that set forth Federal contractors’ obligations under E.O. 11246, in accordance with existing law and policy. The final rule clarifies OFCCP’s interpretation of the Executive Order as it relates to sex discrimination, consistent with title VII case law and interpretations of title VII by the EEOC. It is intended to state clearly contractor obligations to ensure equal employment opportunity on the basis of sex.

The final rule removes outdated provisions in the current Guidelines. It also adds, restates, reorganizes, and clarifies other provisions to incorporate legal developments that have arisen since 1970 and to address contemporary problems with implementation.

Sex is now defined to include “pregnancy, childbirth, or related medical conditions; gender identity; transgender status; and sex stereotyping.”  Except when “sex is a bona fide occupational qualification reasonably necessary to the normal operation of a contractor’s particular business or enterprise,”  discriminatory practices will include:  

(12) Making any facilities and employment-related activities available only to members of one sex, except that if the contractor provides restrooms, changing rooms, showers, or similar facilities, the contractor must provide same-sex or single-user facilities; 

(13) Denying transgender employees access to the restrooms, changing rooms, showers, or similar facilities designated for use by the gender with which they identify; and

(14) Treating employees or applicants adversely because they have received, are receiving, or are planning to receive transition-related medical services designed to facilitate the adoption of a sex or gender other than the individual’s designated sex at birth.

Disparate impact discrimination by otherwise facially neutral practices or policies is also prohibited and can include use of

recruitment or promotion methods, such as ‘‘word-of mouth’’ recruitment or ‘‘tap-on-the shoulder’’ promotion, that have an adverse impact on women where the contractor cannot establish that they are job-related and consistent with business necessity.

An entire subsection is devoted to discriminatory compensation: 

Contractors may not pay different compensation to similarly situated employees on the basis of sex. For purposes of evaluating compensation differences, the determination of similarly situated employees is case specific. Relevant factors in determining similarity may include tasks performed, skills, effort, levels of responsibility, working conditions, job difficulty, minimum qualifications, and other objective factors. In some cases, employees are similarly situated where they are comparable on some of these factors, even if they are not similar on others.

As for pregnancy discrimination, contractors may not, among other things, “[l]imit[] pregnant employees’ job duties based solely on the fact that they are pregnant, or require[e] a doctor’s note in order for a pregnant employee to continue working.”   Similarly, contractors must accommodate employees “who are unable to perform some of their job duties because of pregnancy, childbirth, or related medical conditions” in most circumstances.

A contractor must provide job-guaranteed medical leave, including paid sick leave, for employees’ pregnancy, childbirth, or related medical conditions on the same terms that medical or sick leave is provided for medical conditions that are similar in their effect on employees’ ability to work.

 A contractor must provide job guaranteed family leave, including any paid leave, for male employees on the same terms that family leave is provided for female employees.

Employers are also required to maintain equality in fringe benefits, including medical insurance programs.  In the lengthy preamble, OFFCP notes, among other things that:

some insurance plans have explicit exclusions of coverage for all health services associated with gender dysphoria or gender  transition. Such categorical exclusions are facially discriminatory because they single out services and treatments for individuals on the basis of their gender identity or transgender status, and would generally violate E.O. 11246’s prohibitions on both sex and gender identity discrimination.

The OFFCP notes, among other things, that:

Implicit in the provisions prohibiting discrimination on the basis of sex is the principle that distinctions for other reasons, such as differences in capabilities, are not prohibited. Distinguishing among employees based on their relevant job skills, for example, does not constitute unlawful discrimination.

The OFCCP recognized that some contractors may qualify for exemptions based on religion or First Amendment grounds and deleted an explicit requirement to provide contraception coverage on this ground:

OFCCP declines to implement a blanket exemption from these provisions because claims under RFRA are inherently individualized and fact specific. There is no formal process for invoking RFRA specifically as a basis for an exemption from E.O. 11246. Insofar as the application of any requirement under this part would violate RFRA, such application shall not be required. 

If a contractor seeks an exemption to E.O. 11246 pursuant to RFRA, OFCCP will consider that request based on the facts of the particular case. OFCCP will do so in consultation with the Solicitor of Labor and the Department of Justice, as necessary. OFCCP will apply all relevant case law to the facts of a given case in considering any invocation of RFRA as a basis for an exemption.

OFCCP also notes that the Supreme Court has recognized that the First Amendment to the Constitution requires a ‘‘ministerial exception’’ from employment discrimination laws, which prohibits the government from interfering with the ability of a religious organization to make employment decisions about its ‘‘ministers,’’ a category that includes, but is not limited to, clergy. OFCCP follows this precedent. 

Finally, OFCCP notes that E.O. 11246 contains an exemption that specifically allows religiously affiliated contractors (religious corporations, associations, educational institutions, or societies) to favor individuals of a particular religion when making employment decisions. The regulation implementing that exemption states that the nondiscrimination obligations of E.O. 11246 ‘‘shall not apply to a Government contractor or subcontractor that is a religious corporation, association, educational institution, or society, with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution, or society of its activities. Such contractors and subcontractors are not exempted or excused from complying with the other requirements contained in this Order.’’ OFCCP has already published guidance regarding the application of the religious exemption in Executive Order 11246 in connection with the recent Executive Order 13672 rulemaking. If, however, a contractor is unsure about whether its employment practices are shielded by this exemption, it can seek guidance from OFCCP.

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 Amends Executive Order 11246 Regulations by Issuing Final Pay Transparency Regulations Under EO 13665

Earlier this month, the Office of Federal Contract Compliance Programs (OFCCP) issued its final regulation implementing the Pay Transparency obligations for federal contractors under Executive Order 13665, which amends EO 11246 (i.e., the affirmative action rules for women and minorities).    It will apply to contracts and subcontracts in excess of $10,000 (in a single contract or combination of contracts in a 12-month period)  issued or modified after the regulation’s January 11, 2016 effective date, as well as to financial institutions that serve as depositories for federal funds.   The rule precludes covered employers from requiring employees to keep confidential their own compensation or from asking other employees about their compensation (or from discussing the compensation of other employees unless the speaker’s essential job duties involve accessing payroll information or personnel files).

Among its notable requirements:

·        Employees cannot be retaliated against for discussing their own pay or asking co-workers about their compensation.  With certain exceptions (involving government investigations or other legal obligations), employees whose essential job duties involve accessing compensation data or working with confidential personnel files (such as but not limited to human resources and benefits) may be disciplined for disclosing pay data about other employees.

·        Employees and applicants are not required to disclose their own compensation to other employees, etc.  and employers are not required to disclose information about the compensation of employees.

·        The Equal Opportunity clause mandated by 41 C.F.R. § 60-1.4 to be included in federal contracts and subcontracts has been amended to include the following new paragraph:

(3) The contractor will not discharge or in any other manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. This provision shall not apply to instances in which an employee who has access to the compensation information of other employees or applicants as a part of such employee’s essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the contractor’s legal duty to furnish information.             

·        In addition to including this subsection (3) in their subcontracts, employers must also include a version of this rule (as summarized by the OFFCCP) in their employee handbooks and disseminate it to applicants and employees by posting a copy in a conspicuous location or electronically.   Employers are required to use the exact language proscribed by the OFCCP in its summary.  While contractors are required to inform their employees of the new rules, they are not required to provide new management training on the issue.

·        The only real defense available to employers is that the adverse employment action which the employee alleges was retaliatory was really based on another issue.   Employers are allowed to raise any defense, except one that is based on any rule, practice, agreement policy or other instrument which prohibits employees or applicants from disclosing or discussing their own compensation or the compensation of other employees or applicants (with the obvious exception for employees whose essential job functions involve access to compensation information about other employees).

Aside from the new paragraph in the EO clause and a few new definitions, the new regulation is relatively brief (for a government regulation):

§ 60–1.35 Contractor obligations and defenses to violation of the nondiscrimination requirement for compensation disclosures.

(a) General defenses. A contractor may pursue a defense to an alleged violation of paragraph (3) of the equal opportunity clauses listed in § 60–1.4(a) and (b) as long as the defense is not based on a rule, policy,  practice, agreement, or other instrument that prohibits employees or applicants from discussing or disclosing their compensation or the compensation of other employees or applicants, subject to paragraph (3) of the equal opportunity clause. Contractors may pursue this defense by demonstrating, for example, that it disciplined the employee for violation of a consistently and uniformly applied company policy, and that this policy does not prohibit, or tend to prohibit, employees or applicants from discussing or disclosing their compensation or the compensation of other employees or applicants.

(b) Essential job functions defense.

Actions taken by a contractor which adversely affect an employee will not be deemed to be discriminatory if the employee has access to the compensation information of other employees or applicants as part of such employee’s essential job functions and disclosed the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, and the disclosure was not in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the contractor, or is consistent with the information.

(c) Dissemination of nondiscrimination provision. 

The contractor or subcontractor shall disseminate the nondiscrimination provision, using the language as prescribed by the Director of OFCCP, to employees and applicants:

 1) The nondiscrimination provision shall be incorporated into existing employee manuals or handbooks; and 

(2) The nondiscrimination provision shall be disseminated to employees and applicants. Dissemination of the provision shall be executed by electronic posting or by posting a copy of the provision in conspicuous places available to employees and applicants for employment.

OFCCP has also published a supplement to its official "EEO is the Law" poster which most contractors utilize and which refers to the Pay Transparency rules (as well as to other recently published regulations).  The OFFCP official summary of the Pay Transparency regulation which covered employers are required to post in their employee handbooks, etc. provides as follows: 

PAY TRANSPARENCY POLICY STATEMENT

The contractor will not discharge or in any other manner discriminate against employees or applicants because they have inquired about, discussed, or disclosed their own pay or the pay of another employee or applicant. However, employees who have access to the compensation information of other employees or applicants as a part of their essential job functions cannot disclose the pay of other employees or applicants to individuals who do not otherwise have access to compensation information, unless the disclosure is (a) in response to a formal complaint or charge, (b) in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or (c) consistent with the contractor’s legal duty to furnish information.

 

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.

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 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.

OFCCP Puts Teeth In EEOC Criminal Record Policy for A/A Employers

  At the end of January, the OFCCP issued Directive 306 concerning the consideration by affirmative action employers of the criminal records of applicants for employment.  As faithful readers may recall, last April 15, the EEOC issued its Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII.  The OFCCP has unsurprisingly adopted the EEOC’s position. Moreover, the OFCCP has gone into more detail about how this will affect affirmative action employers that are required  by the Vietnam Era Readjustment Assistance Act to list all job openings at “an appropriate local employment service office of the state employment security agency wherein the opening occurs" or "the appropriate employment service delivery system where the opening occurs."  Last May, the DOL required these government employment agencies to begin place conditions on the listing of job openings.  In short, they require notices to be provided to employers that list jobs and to applicants about the possible unlawful disparate impact (i.e., discrimination) that can occur from any employer’s disqualification of an applicant on the basis of his or her criminal record.  Therefore, these notices will go to many applicants for employment with an affirmative action employer which considers an applicant’s criminal record.

As you may recall, the EEOC reminded employers last April that consideration of criminal record histories has an adverse impact on certain minorities and is lawful only when justified by business-relatedness and business necessity.   The EEOC indicated that employers should conduct an individualized assessment of the circumstances surrounding a criminal conviction such as “notice to the individual that he has been screened out because of a criminal conviction; an opportunity for the individual to demonstrate that the exclusion should not be applied due to his particular circumstances; and consideration by the employer as to whether the additional information provided by the individual warrants an exception to the exclusion and shows that the policy as applied is not job related and consistent with business necessity.” 

As indicated by the OFCCP, screening applicants out because of a criminal record may invite closer scrutiny.  Moreover, employers and applicants will be reminded of the EEOC’s policy as follows:

·        When employers register with the government employment agency (like a One-Stop Career Center), they will be sent Notice #1, “explaining that the covered entity must comply with federal civil rights laws which, due to the likely adverse impact of criminal record exclusions on protected groups, generally prohibit categorical exclusions of individuals based solely on an arrest or conviction history.”   This notice also explains limits placed by the Fair Credit Reporting Act on the consideration of criminal records and federal Work Opportunity credits for hiring individuals with criminal records.   

·        Employers will also be required to identify job announcements “that include hiring restrictions based on arrest and/or conviction records.”  Once any job vacancy announcement is so identified, the employer will be sent Notice #2 encouraging the employer to remove or edit the vacancy announcement.

·        Employers will only be permitted to list job vacancies where criminal record histories will be considered as long as the applicants receive Notice #3, “explaining that the exclusions in the posting may have an adverse impact on protected groups and informing them that individuals with criminal history records are not prohibited from applying for the posted position.” Employees of the government employment agencies are forbidden from screening applicants based on their criminal record history and cannot refuse to refer an applicant because of his/her criminal history.

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.