Recent News

On Wednesday, April 3, 2019, the Department of Justice informed the Federal District Court that the EEOC could implement pay data collection procedures if the court orders employers to submit the W-2 pay and hours worked data required by EEO-1 Component 2 by September 30, 2019. However, the pay data collection would have to be performed by a contractor at a cost of $3 million and would result in significant uncertainties on security and accuracy matters.

DOJ's submission, which included a declaration by EEOC's Chief Data Officer, was in response to US District Court Judge Tanya S. Chutkan's requirement that the government provide her with their plan to collect the EEO-1 Component 2 data. Judge Chutkan ruled on March 4, 2019 that the OMB's decision to stay the EEOC's revised EEO-1 information collection known as Component 2 was invalid and that it should be implemented immediately. When the EEOC opened its EEO-1 portal on March 18, 2019 seeking only Component 1 data of race, gender, ethnicity by EEOC category, the court, upon the request of plaintiffs, told the government to provide it with a plan for collecting Component 2 W-2 pay and hours worked data.

The submission states that collecting the pay data from employers by September 30th poses a number of issues. First, the Declaration of Dr. Sam Haffer, the EEOC's Chief Data Officer, states that the data processes the EEOC uses to collect EEO-1 demographic data "are not capable of collecting employers' 2018 Component 2 data" and that "it would take nine months to modify the EEOC's current processes to support the collection of large amounts of sensitive Component 2 pay data from 2018." As a result according to Dr. Haffer, the EEOC has determined that using a data and analytics contractor is its only alternative although "there is a serious risks that the expedited data collection process may yield poor quality data because of the limited quality control and quality assurance measures that would be implemented due to the expedited timeline."

Meanwhile, a number of employer groups including The Institute for Workplace Equality represented by FortneyScott filed an amicus brief with the court asking that the pay data collection be postponed until 2020.

At a critical moment in the simmering battle over the definition of "joint employer," the Department of Labor's Wage and Hour Division has entered the fray with an emphatic statement.

W&H has issued a proposed new rule on the subject – its first since 1958 – which seeks to cut through a growing thicket of proposals and counter-proposals from a variety of sources, chiefly the NLRB. The core principles of the new rule return the DOL's definition to one that had been the dominant understanding for decades. Under the new rule, joint employer status will be determined under a four-factor test.

Who has the authority to:

• hire or fire the employee;
• supervise and control the employee's work schedules or conditions of employment;
• determine the employee's rate and method of payment; and
• maintain the employee's employment records.

Since the Obama Administration's attack on the pre-existing rules by elevating factors such as "indirect control" or "reserved rights," there has been a concerted effort by employer groups to clarify the criteria by which "join employer" decisions will be made. W&H has provided precisely the sought-for clarity by "explaining that ability, power, or reserved contractual right to act in relation to the employee is not relevant for determining joint employer status" and noting, further, that analyses of additional factors may be used to determine joint employer status, but only if "they are indicative of whether the potential joint employer is exercising significant control over the terms and conditions of the employee's work."

On March 28, 2019 the U.S. Department of Labor announced a proposed rule to clarify and update the Fair Labor Standards Act (FLSA) regulations governing regular rate requirements. Regular rate requirements define what forms of payment employers should include and exclude in the "time and one-half" calculation when determining workers' overtime rates. The proposed rule focuses primarily on clarifying what kinds of perks, benefits, or other miscellaneous items must be included in the regular rate. Because these regulations have not been updated in decades, the proposal would better define the regular rate for today's workplace practices.

The Department proposes clarifications to confirm that employers may exclude the following from an employee's regular rate of pay:

• The cost of providing wellness programs, onsite specialist treatment, gym access and fitness classes, and employee discounts on retail goods and services;
• Payments for unused paid leave, including paid sick leave;
• Reimbursed expenses, even if not incurred "solely" for the employer's benefit;
• Reimbursed travel expenses that do not exceed the maximum travel reimbursement under the Federal Travel Regulation System and that satisfy other regulatory requirements;
• Discretionary bonuses, by providing additional examples and clarifying that the label given a bonus does not determine whether it is discretionary;
• Benefit plans, including accident, unemployment, and legal services; and
• Tuition programs, such as reimbursement programs or repayment of educational debt.

The proposed rule also includes additional clarification about other forms of compensation, including payment for meal periods, "call back" pay, and others.

The proposed rule was published in the March 29, 2019 Federal Register and comments are due on May 28, 2019.

The Office of Management and Budget (OMB) has issued a memo that has effectively “killed” a proposal that would have required employers to report compensation data on the EEO-1 reports due in March 2018. But, that doesn’t mean you should let your guard down. In response to the memo, EEOC Acting Chair Victoria Lipnic said this will not alter the agency’s enforcement efforts concerning EEO reporting.

EEOC and OFCCP regulators pay close attention to EEO-1 reports and use them to identify patterns of workplace discrimination and target employers for investigation. Employers often fail to understand that they can use these reports strategically to minimize the odds of close scrutiny from EEOC and OFCCP. On the other hand, incorrect reporting opens the door wide to legal liability and discrimination claims from regulators and private parties.

The upcoming filing deadline of March 31, 2018 will be here fast, and now is the time to get a handle on the data-gathering and reporting requirements to ensure your company’s compliance.

Join this webinar on September 25 featuring Nita Beecher, Esq. and Alice Kilborn, Esq. who will share insights into how to properly meet your 2017 EEO-1 report filing requirements. You’ll learn:

• The practical impact of the OMB’s memo calling for an immediate stay of the EEO-1 form’s pay data collection provision revised September 29, 2016
• How to tell if your organization must file one or more EEO-1 reports
• The time period for reporting employment data
• The different requirements for single- vs. multi-establishment employers, including consolidated reports, and reports for headquarters
• How to gather and report gender and ethnicity information
• How to categorize your job titles into EEO-1 categories
• Online and paper filing options
• Frequently-asked questions and answers for first-time filers
• How the EEOC and the OFCCP use the information employers provide on EEO-1 reports to identify patterns of workplace discrimination and take a closer look at your company in audits and charges
• And much more!

You must register for this webinar.  Please click here for more info.

On May 9, 2016 the OFCCP announced the OMB approval of the new Functional Affirmative Action Plan (FAAP) guidelines effective April 28, 2016.  The new guidelines, now 2013-01 Revision 1, are effective until April 30, 2019, and the new guidelines primarily consolidate and tighten up the former guidelines.  The most interesting change is the fact that contractors no longer renew their FAAP agreements but rather “certify” them.  While the term “certify” is not defined, the requirements for certification are similar to those used for renewing.

Other changes include:

• A new “Roles and Responsibilities” section which provides that it is “the responsibility of the Division of Program Operations (DPO) to review and recommend approval of contractor requests to develop, implement and maintain AAPs.”
• A renumbered Section 7 (d) which now places the burden on contractors to notify OFCCP after the OFCCP Director has approved the contractors’ FAAPs.
• The elimination of a requirement that OFCCP notify contractors within 10 days that it received a FAAP request.
• The OFCCP conference with the contractor is no longer mandatory but will be scheduled if deemed necessary by The FAAP Branch although contractors will still discuss the items on Attachment B and C for OFCCP’s consideration.

Contact your FortneyScott attorney if you have any questions.

Beginning August 1, 2015, employers must use the new VETS-4212 report to provide the U.S. Department of Labor Veterans’ Employment Training Service (“VETS”) with information on their affirmative action efforts in employing veterans. The VETS-4212 report replaces the VETS-100 and 100A forms, as required by the regulations implementing the Vietnam Era Veterans Readjustment Assistance Act (“VEVRAA”) that became final in September of last year. The VETS-4212 reports the aggregate number of newly hired and employed protected veterans.

Contractors should note that the most significant change in the new VETS-4212 form is that employers are no longer required to invite post-offer applicants to identify themselves using the individual categories of protected veterans. Employers now have the option of inviting pre- and post-offer applicants and employees to self-identify as a protected veteran. However, contractors may continue, and it is our recommendation, to collect information on the specific categories of protected veterans so long as the aggregated data is reported as required by the new VETS-4212 form.

For more information on how the VETS-4212 report will affect your organization, please contact a WorkPlace HR Consultant at 202-689-1203.

On January 20, 2015, the OFCCP announced that federal contractors are no longer required to solicit protected veteran categories in the post-offer invitation to applicants in order to comply with VEVRAA implementing regulations. Because the new VETS-4212 report no longer requires federal contractors to report on specific protected veteran categories, but rather on aggregate data, the OFCCP is no longer requiring federal contractors to collect the category information post-offer. Federal contractors only need to invite those individuals who are offered a job to indicate whether they are a protected veteran under any of the enumerated categories, like the invitation required for the pre-offer solicitation.

While federal contractors may choose to continue to invite applicants to voluntarily self-identify the specific protected veteran category at the post offer stage, they are no longer required to do so and may want to consider not collecting the specific veteran category information to limit the retention of unnecessary disability-related information.

For more information on how this may affect your current processes or other best practices, please contact either your WorkPlace HR human resources consultant or an attorney at FortneyScott (www.fortneyscott.com).

The DOL's Wage and Hour Division will now require certain federal contractors to post a new poster related to $10.10 minimum wage requirements on certain federal contracts, a copy available here. Federal contractors should be aware of some key points:

•    The minimum wage increase applies to new contracts and replacements for expiring contracts beginning on  January 1, 2015;
•    Covered contracts include four major categories: 1) contracts for construction under the Davis-Bacon Act (DBA); 2) contracts for services under the Service Contract Act (SCA); 3) concession contracts, such as those providing food, lodging, automobile fuel, souvenirs, newspaper stands and recreation equipment on federal property; and 4) contracts providing services, such as child care or dry cleaning, on federal property for federal employees or the general public;
•    The poster is required for federal contractors that have FLSA-covered workers performing work in connection with a covered SCA or DBA contract, as well as those with concessions contracts or contracts offering services to federal employees or the public on federal property;
•    The $10.10 rate will be adjusted for inflation annually, beginning January 1, 2016.

 

The OFCCP will be sending Courtesy Scheduling Announcement Letters to HR directors (or designated points of contact) at 2,500 federal contractor establishments. Contractors may confirm whether one of their establishments was mailed a CSAL by faxing a written request on company letterhead to OFCCP’s Division of Program Operations at (202) 693-1305. For more information, check out the answers to Frequently Asked Questions about CSALs at http://www.dol.gov/ofccp/regs/compliance/faqs/csalfaqs.htm.

The Department of Labor ("DOL") announced today that it will issue final regulations to implement Executive Order 13658, "Establishing a Minimum Wage for Contractors," which was signed by President Obama on February 12, 2014. The final regulations will require the payment of $10.10 per hour to covered employees working on most government contracts.

The final regulations will be published in the Federal Register on October 7, 2014, and will take effect on January 1, 2015.  According to a Fact Sheet issued by DOL, the final rule makes clear that the Executive Order minimum wage requirement applies to all contracts for construction covered by the Davis-Bacon Act; contracts for services covered by the Service Contract Act; concessions contracts, such as contracts to furnish food, lodging, automobile fuel, souvenirs, newspaper stands, and/or recreational equipment on Federal property; and contracts to provide services, such as child care or dry cleaning, in Federal buildings for Federal employees or the general public. The final rule also sets forth the standards that contractors should apply to determine whether their workers are covered by the Executive Order, recordkeeping requirements, and where to find the required rate of pay for all workers, including tipped workers and workers with disabilities.

Once the final rule has been published, we will provide more detail about the obligations imposed on government contractors.