Recent News

Update on October 1, 2014: The OFCCP has released its revised Scheduling Letter and Itemized Listing. 

On September 30, 2014, the OFCCP is scheduled to publish a notice in the Federal Register announcing that the Office of Management and Budget (OMB) has approved a revised Scheduling Letter that is used for the commencement of OFCCP compliance audits for non-construction supply or service Federal contractors.  The changes expand the data that Federal contractors must provide to the OFCCP at the beginning of an audit, in particular requiring the production of more detailed, individual employee compensation data and hours worked in response to the revised Item 11 requirements.  In addition, contractors will be required to submit personnel activity data by the five specific race and ethnicity subgroups, instead of the “minority” and “nonminority” categories currently required. Once the new Scheduling Letter is available, FortneyScott will provide more details on Federal contractors’ new obligations and the relevant deadlines.  A copy of the OFCCP’s Federal Register notice is available here.

Changes to veteran reporting requirements were included in new regulations published by the Department of Labor’s Veterans’ Employment and Training Service (“VETS”) September 25, 2014.  These new regulations change federal contractors veteran data reporting beginning in 2015.  The new rule eliminates the “VETS-100” Report, and changes the name of the “VETS-100A” Report to the “VETS-4212” Report to reflect the statutory authority for the data collection requirement. The revised Report will no longer require federal contractors to submit protected veteran status data by individual veteran categories; instead, federal contractors will report the total number, or the aggregate number, of employees and new hires who are protected veterans. For more information on how this change may affect your organization please contact your human resources consultant at WorkPlace HR.

On August 19, 2014, the OFCCP issued Directive 2014-02 clarifying federal contractor’s nondiscrimination obligations on the basis of sex including discrimination on the basis of gender identity and transgender status. Directive 2014-02 sets forth the policy that the OFCCP will fully investigate and seek to remedy instances of sex discrimination that occur because of an employee’s or applicant’s gender identity or transgender status. Citing the recent EEOC decision in the case of Macy v. Holder, which held that discrimination because a person is transgender is sex discrimination in violation of Title VII, the OFCCP directs compliance officers to conduct complaint investigations and compliance evaluations related to transgender status and gender identity in accordance with the directive.

The Directive is effective immediately. For more information on how this may affect your current policies and practices please contact either your human resources consultant at WorkPlace HR (www.workplacehr.com) or your attorney at FortneyScott (www.fortneyscott.com).

The Office of Federal Contract Compliance Programs (OFCCP) currently is sending out advanced courtesy notifications (known as Corporate Scheduling Announcement Letters or CSALs), to federal contractor establishments that have been selected to undergo a compliance evaluation during the upcoming scheduling cycle. The letters are addressed to the “Human Resources Director” at the establishments; the Corporate Headquarters is not copied.  Please be sure to prepare mailrooms and local Human Resources Managers to be on the alert and to be ready to respond to an audit notice at any establishment that receives the letter.

Note that the notification letter does not schedule a compliance evaluation, but instead simply notifies an establishment that it has been selected to undergo a compliance evaluation during the next audit scheduling cycle. The list of notified establishments is generated from OFCCP's Federal Contractor Selection System (FCSS). The primary purpose of the notification is to facilitate preparations for responding to the future OFCCP audit, and federal contractors are well advised to confirm their audit preparedness for each facility that receives a letter.

For more information please contact either your attorney at FortneyScott or human resources consultant at WorkPlace HR (www.workplacehr.com), so that we may  assist in your preparations and response.

President Obama issued new requirements—an Executive Order (EO) plus a Memorandum to the U.S. Department of Labor (DOL)—aimed at closing the wage gap for women and minorities as part of the White House’s initiatives in support of Equal Pay Day on April 8, 2014.  The requirements apply to all new federal contracts under Executive Order 11246—about the broadest range possible.  The Memorandum focuses on compensation data.  The EO deals with retaliation for disclosing or inquiring about wages.  However, the new requirements largely put “old wine in new bottles” and are best understood as part of the Administration’s orchestrated effort to influence the political debate on women and minority pay compensation issues and to carry out the President’s pledge to wield his executive power with a pen.

The Memorandum directing the DOL’s Office of Federal Contract Compliance Programs (OFCCP) to expand the collection of compensation data is a Presidential imprimatur on an advanced notice of proposed rulemaking (ANPRM) that was announced by OFCCP in August 2011, nearly three years ago.  Although the OFCCP still has not completed that effort, the OFCCP already receives and can obtain enormous amounts of compensation data today during the course of an audit.  The independent National Academy of Sciences identified a number of serious concerns about the government’s ability to collect, analyze and use compensation data from employers in a meaningful manner.  Perhaps in recognition of that critique, the new Memorandum’s provisions include:

• Directing OFCCP to publish the Proposed Regulation in 120 days;
• An instruction to maximize the efficiency of the data collection process, in part, by avoiding new record-keeping requirements; and
• A goal of using the data to increase voluntary compliance.

The new Executive Order prohibiting federal contractors from restricting employees and applicants’ ability to discuss compensation amends EO 11246.  These requirements have also been addressed and enforced by another agency–-the National Labor Relations Board (NLRB).  The NLRB already has imposed similar obligations on both organized and unorganized employers alike, although the Executive Order will expand these requirements to managers and supervisors, and to rail and air carrier employees.  The Executive Order’s provisions include:

• Non-retaliation for inquiring or discussing compensation with fellow workers or applicants.
• Recognizes that employers may still require employees, whose job duties involve compensation, to keep such information confidential (e.g., human resources and compensation positions), while acknowledging that there may be instances where such information must be disclosed (e.g., in an investigation, in response to a charge, or consistent with a legal duty);
• An immediate effective date; and
• Directing DOL to publish Proposed Regulations in 160 days.

Because of the duplicative nature of the new requirements, it is not expected that they will have a material impact on the issues they are intended to affect although the consequences for noncompliance, including loss of federal contracts, are significantly greater.  Nonetheless, these new compensation-related requirements are the latest in the growing list of expanded obligations and potential liabilities imposed on federal government contractors that will increase the burdens and costs to the federal contractor community.  The next action will be the publication of proposed regulations by DOL later this year. 

As a result of the decision on March 21, 2014, there will be no legal challenge to the OFCCP’s disability regulations and they will still become effective March 24, 2014. Judge Emmet G. Sullivan denied Associated Builders and Contractors, Inc.’s (“ABC”) motion for summary judgment and upheld the legality of the provisions at issue in the regulations.

The court held that the self-identification pre-offer inquiry does not violate the Americans with Disabilities Act (“ADA”) based on a review of the legislative history of the ADA and the EEOC’s agreement in permitting pre-offer disability inquiries in the context of affirmative action. The court also held that the OFCCP’s methodology for reaching the 7% figure was not in violation of the law. Acknowledging that the OFCCP was forced to estimate using the “best source” of data available, the court ultimately concluded that this did not render the estimate unreasonable. To read the full decision, click here.

On February 12, 2014, President Obama signed an Executive Order raising the minimum hourly wage rate paid on certain federal contracts to $10.10, beginning January 1, 2015. Further, the Executive Order raises the minimum hourly wage for tipped workers on certain federal contracts to $4.90, beginning January 1, 2015. The Secretary of Labor is directed to issue regulations by October 1, 2014 that implement these new provisions and incorporate existing definitions, procedures, remedies and enforcement processes of the Fair Labor Standards Act (“FLSA”), the Service Contract Act (“SCA”) and the Davis-Bacon Act (“DBA”).  The full text of the Executive Order is available here.  

Please stay tuned for additional developments on the Executive Order and the implementing regulations. 

OFCCP sent over 2,100 CSALs to the individual establishments of 856 separate federal contractors. We also understand that OFCCP will limit the number of audits for each federal contractor to 35. Be sure to watch out for the CSALs and keep in contact with your individual establishments to ensure that if they do receive a CSAL, it is directed to the appropriate internal personnel.

We have received word that the next round of CSALs is going to be sent out next week. The OFCCP had planned to send them earlier, but was delayed due to the government shutdown in October 2013. Stay tuned for more updates.

Update: OFFCP has formally issued the form on its website. Please click here for the link.

The Office of Management and Budget (“OMB”) approved a modified version of U.S. Department of Labor’s Office of Federal Contract Compliance Programs’ (“OFCCP”) Section 503 Voluntary Self-Identification form that contains positive changes from the form as initially proposed by the Agency.  In direct response to feedback provided by the contractor community regarding deficiencies in the prior version of the proposed form, the approved form now includes a selection for an individual to indicate that they do not have a disability, has a place for an individual to indicate their name and the date, and correctly identifies that employers are required to ask current employees their disability status every five years. To see the form, click here.  Now that OMB has approved the new version of the form, look for the OFCCP to formally issue the document in the near future.