OFCCP Week In Review: June 20, 2016

The “OFCCP Week in Review” is a simple, fast and direct summary of relevant happenings in the OFCCP regulatory environment published weekly. Here are the latest developments:

Tuesday, June 14, 2016: Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) announced its release of the Final “Discrimination on the Basis of Sex” Rule. Release of this Rule effectively updated the sex discrimination guidelines from 1970 and aligned them with current law and the realities of today’s workforce. A summary of the new Rule includes:

1. An update to the sex discrimination guidelines.
2. Protections related to pregnancy, childbirth, and related medical conditions.
3. Promotion of fair pay practices.
4. Equal benefits to male and female employees participating in fringe-benefit plans.
5. Prohibition of any form of sexual harassment.
6. Equal access to jobs and workforce development opportunities for both men and women.
7. Safeguards for workers who provide caregiving to their loved ones.
8. Protections for transgender workers. This also addresses the exclusion of coverage related to gender dysphoria or gender transition as facially discriminatory because the exclusion would be based on an individual’s gender identity.
9. Prohibition of sex discrimination based on sex stereotypes.
10. Consistency with the Religious Freedom Restoration Act and other protections for religiously affiliated contractors.

Just as the EEOC announced their proposed revision to the EEO-1 Report on the anniversary of the signing of the Lilly Ledbetter Act, the announcement of the new Sex Discrimination Rule coincided with the White House Council on Women and Girls’ first “United State of Women” Summit, an event based on gender equality with the plan to address remaining challenges that still need to be addressed.

The Final Rule becomes effective on August 15, 2016.

Wednesday June 15, 2016: OFCCP Dropped its “Benchmark for hiring” to 6.9% from 7%. Based on U.S. Department of Labor Bureau of Labor Statistics’ Census Population Survey Table 1 reporting the percentage of “Veterans (not Protected Veterans) in the Civilian Labor Force,” OFCCP has adjusted and dropped its VEVRAA “Benchmark for hiring” to 6.9%.  OFCCP announced this adjustment on its website via a revised graphic titled “Annual VEVRAA Benchmark Effective Dates.” The new percentage Benchmark is effective for all AAPs dated after March 4, 2016.

NOTE 1: Many Government contractors are still confused about what OFCCP’s “Benchmark for hiring” is, since OFCCP states it is neither a “Quota” nor a “Goal” and further states that OFCCP does not expect contractors to compare the percentage of incumbent employees who are Protected Veterans to the Benchmark percentage (so, do NOT compare Protected Veteran employment percentage to Benchmark as one does pursuant to Section 503 when comparing employment percentage of disabled employees to 7% “Utilization Goal”)…Rather, OFCCP expects Government contractors to compare the percentage of Protected Veterans hired (it’s a “Benchmark for hiring”) into an AAP establishment’s workforce during the AAP plan year against the Benchmark. Example:  if a company hired 8 employees who were Protected Veterans from among 100 Hires (not applicant flow) at the establishment, the establishment’s VEVRAA AAP would report that it met (exceed actually) the 7% (and now 6.9%) “Benchmark for hiring.” In other words, you hired at or above the “Benchmark” percentage. (Remember, too, that VEVRAA’s “Benchmark for hiring” applies to the entire establishment and NOT to each Job Group within the establishment. Unlike Section 503 Utilization Goal, a contractor could hire Protected Veterans into only one Job Group and employ no Protected Veterans in any other Job Group and meet or exceed its “Benchmark for hiring.” Example: I hire 8 Protected Veterans into Job Group 1 and hire 92 non-Protected Veterans into Job Groups 2 through 15. Bingo. Compliance.)

NOTE 2: Do not fret that an AAP you build, let’s say today with a June 20, 2016 date on it, would include Hires made between June 21, 2015 (one year ago) and March 3, 2016 (the date the Benchmark first dropped to 6.9%). In other words, eight months of hiring occurred when the Benchmark was HIGHER than it is on the day you created your VEVRAA AAP. OFCCP does not expect or require you to compare the Hires before March 4, 2016 against the THEN 7% Benchmark for hiring while comparing Hires you made on or after March 4, 2016 to the lower 6.9% Benchmark. Rather, OFCCP expects you to compare all hires in the AAP year (going back to June 2015) against the lower 6.9% Benchmark which was in effect on the day you created the AAP in June 2016.

NOTE 3: What happens if you hire every Protected Veteran who applies, but still hire a lesser percentage of Veterans than the “Benchmark for hiring?”  Don’t fret about that either if you failed to hire at or above the Benchmark. Why not? What happens bad to you if you miss the Benchmark? Debarred? Economically fined? Have to sign a Conciliation Agreement? No. None of the above. Rather, you have to do more Outreach and Recruitment. But, remember: you have to do that anyhow pursuant to your separate duty to undertake annually an “Effectiveness Review” of your outreach and recruitment activity your establishment undertakes to insure that your recruitment activity is being “effective” to source Protected Veterans in percentages equal to or greater than the Benchmark for hiring. So, there is no penalty for failing to hire at or above the Benchmark for hiring; only if you fail to try.

NOTE 4:  Why is OFCCP basing its Protected Veteran “Benchmark for hiring” on the percentage availability of all veterans in the Civilian Labor Force and not based on only the (smaller) percentage of Protected Veterans in the Civilian Labor Force? Now you understand that little dust-up within OFCCP last year when it unilaterally and quietly changed the definition of Protected Veterans to suddenly include all Veterans with 38 USC Section 101 military benefits? ANSWER: There is no database reporting the number or percentage of “Protected Veterans,” but OFCCP, V.E.T.S. and the Veterans Administration can all count veterans to whom VA is giving benefits. (Counting Protected Veterans was never important before OFCCP created the “Benchmark for hiring” and then the agency realized that the federal Government had no database for this unique slice of the veterans’ population.

Wednesday, June 15, 2016: U.S. Senator Lamar Alexander Seeks To Block The EEOC’s Proposed EEO-1 Revision to Force Certain Employers To Report Pay Data. Borrowing a page from Jimmy Carter’s Policy Playbook, Senator Alexander (R-Tenn) filed Senate Amendment 4690 to Senate Amendment 4685  to the proposed U.S. Senate appropriations budget FY2017 Commerce, Justice, Science Appropriations Bill S.2837. Senator Alexander’s amendment, if passed into law, would deprive the EEOC of the funds the EEOC would need to: (a) cause employers to file employee pay data (as part of their EEO-1 reports beginning in the Fall of 2017) and (b) allow the EEOC to analyze those employer pay data reports. Accordingly, even if President Obama were to later this year order the EEOC to publish its proposed pay data collection revision to the EEO-1 report in Final form in the Federal Register, Senator Alexander’s amendment, if eventually adopted by the full Senate and House and passed into law, would effectively throw “sand in the gears” and stop the EEOC’s EEO-1 revision in its tracks. (President Carter perfected, in modern times, limitations on government initiatives he did not like by limiting the federal agencies through the budget and thus often avoiding much more public and vitriolic debates about controversial public policy initiatives by burying the initiative in tedious, lengthy and convoluted budget debates which occur beyond the view of most Americans. For example, there are thus far over 170 amendments proposed for consideration to the Senate and House Appropriation bills for the Commerce, Justice, Science, etc. agencies).

Here is the text of Senator Alexander’s amendment:

“None of the funds made available by this Act may be used by the Equal Employment Opportunity Commission for the “collection of information,” as defined in section 3502(3)(A) of title 44, United States Code, from employers as set forth in the notice entitled “Agency Information Collection Activities: Revision of the Employer Information Report (EEO-1)and Comment Request,” published by the Commission (81 Fed. Reg. 5113 (February 1, 2016)) or for any final “collection of information” related to such notice.”

NOTE: The U.S. House of Representatives on June 7, 2016 passed a rider to the House Appropriations Bill  for Commerce, Justice, Science and Related Agencies similar to Senator Alexander’s EEOC rider to the Senate appropriations bill. The House Appropriations bill is now waiting on the full Senate to pass its appropriations bill so a Conference Committee may then iron out any differences between the bills of the two houses of Congress. If the Senate adopts Senator Alexander’s amendment, the appropriations bill for Commerce, Justice, Science and Related Agencies would then proceed to President Obama for his signature, including among many other provisions, the “poison pill” killing the EEO-1 Revision. If so, the arrival of this appropriations bill at The White House would then force the President to either veto the bill–and force a stand-off between the Congress and the President over whatever issue(s) divide the Legislative and Executive Branches of our federal government, or to sign it or to ignore it. Given that it is a Presidential election year, The White House will attempt to stall all appropriation bills from reaching the President in the hopes that a Continuing Resolution, funding the federal government past its September 30, 2016 fiscal year end date, will emerge and then allow President Obama to assess whether his position has improved after the November 8, 2016 Presidential election (because perhaps the composition of the Senate will change). NOTE: all appropriations bills are now slowed given the filibuster Democrats are now leading, ostensibly concerning gun controls.  Absent a veto, a bill the Congress presents to the President becomes the law of the land when either the President signs the bill or declines to do so within 10 days of presentment of the bill while the Congress is still in session. See how exciting all that stuff really was that you ignored in that seemingly boring 6^th grade civics class? Senator Alexander and President Obama were paying attention!

THIS COLUMN IS MEANT TO ASSIST IN A GENERAL UNDERSTANDING OF THE CURRENT LAW AND PRACTICE RELATING TO OFCCP. IT IS NOT TO BE REGARDED AS LEGAL ADVICE. COMPANIES OR INDIVIDUALS WITH PARTICULAR QUESTIONS SHOULD SEEK ADVICE OF COUNSEL.

Reminder: If you have specific OFCCP compliance questions and/or concerns or wish to offer suggestions about future topics for the OFCCP Week In Review, please contact your membership representative at 866-268-6206 (for DirectEmployers Association Members), or email Candee at candee@directemployers.org with your ideas.