The OFCCP Week in Review (WIR) is a simple, fast and direct summary of relevant happenings in the OFCCP regulatory environment, authored by experts John C. Fox and Candee Chambers. In today’s WIR, we cover:
- U.S. Department of Labor Wage & Hour Division publishing its Final Rule regarding paid sick leave for selected federal contractors
- EEOC to collect summary pay data beginning in March 2018
Friday, September 30, 2016: Paid Sick Leave is Here Next Year for Selected Federal Contractors, Absent a New President Pulling it Back
The U.S. Department of Labor Wage and Hour Division, published a highly controversial Final Rule last Friday which becomes effective as to only certain ”employees” of federal contractors and subcontractors which sign only certain “new” federal contracts resulting from solicitations issued on or after January 1, 2017. The Rule is thought to not attach to about 80% of all federal contractors and subcontractors. While it seems a simple notion to order up mandated sick leave, the Rule itself is 15 Federal Register pages long and the entire Rulemaking package is 126 Federal Register pages in length (with explanatory Preamble and economic justifications). As with other recent Rules affecting Federal contractors, this Rule’s title is also not descriptive of all of its requirements. This Rule, for example, also provides for certain forms of paid family leave and also requires paid leave for victims of domestic abuse who are otherwise not sick. The Rule is far too complex to describe here and would merit a full two-hour Webinar/Seminar. We will discuss the Final Rule later this week at the National Employment Law Institute’s Affirmative Action Briefing being held in Austin, Texas and in all three other AAB locations later in the month. There are many HR implications to discuss, including whether separate PTO entitlement “buckets” are viable any longer as a practical matter, especially with 14 states/major cities also mandating various forms of paid sick leave. We may be going “back to the future” with the rejuvenation of separate sick leave and vacation “buckets,” or the elimination of vacation entitlements altogether, as many companies have recently already done. Should this paid sick leave Final Rule remain in effect after January 20, 2017 (the date the new President is sworn in), all federal contractors covered by this paid sick leave requirement would do well to give their leave entitlement programs a holistic top to bottom review when incorporating these new paid sick leave protections into the collage of existing leave entitlements the company already offers.
Friday September 30, 2015: The EEOC Announced in a Press Release That it had Received Approval From OMB to Publish a Final Notice to Require EEO-1 Filers to Report Broad Categories of Pay Information Beginning in March 2018
Two new themes: These are “Summary Pay Data” and this reporting is to help you. Because this is again an Executive Branch action, and one which is also mired in heavy controversy, the new President could stop this reporting with the flash of a pen. The EEOC has also permanently changed both the Reporting date (used to be September 30 of each year) and the reporting window (used to be any pay period during the three month period from July 1 to September 30). EEO-1 reporting is now moved to occur every March 31 and the three month reporting window will permanently move and be for the prior year for any pay period between October 1 and December 31). So, you will file your 2017 EEO-1 report on March 31, 2018 for a pay period of your choosing between October 1 and December 31, 2017. Because reporting is delayed until March 31, 2018 (18 months from now) there is no immediate rush to reform or revise now your corporate EEO-1 reporting systems. Rather, the smart betting is to wait patiently to see what happens November 8 with the Presidential election.
Uniquely, the EEOC’s explanation of what it has done is not told in any one writing. Rather, you have to sew together five document sets to get the full picture since neither OMB’s approval of the EEOC’s proposed Notice is published, nor did the EEOC choose to publish a Final Notice in the Federal Register for the public. Rather, the EEOC has instead told its story piecemeal via these five documents it has posted on its website:
- the new 2017 EEO-1 reporting form (see especially new Section D which is the pay data reporting component: this is the document you want to hand to your IT department and tell them this is the needed output);
- a Fact Sheet for Small Business (MUST READING!);
- Q&As (MUST READING! This reports the new reporting snapshot date as October 1 of each year to December 31 of each year and reports OFCCP plans to use the Summary Pay Data to schedule audits); and
- Final EEOC Notice to Public dated 7/14/2016 (at 81 Federal Register 45479-45497)
- Revised Instruction Booklet
Here is handy link which will take you to a master index page of the EEOC’s website listing all of the above links, and more: https://www.eeoc.gov/employers/eeo1survey/2017survey.cfm?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=
By NOT publishing the details of reporting in the Federal Register in a Legislative-Type Rule, the EEOC is signaling its belief that it need not publish the required reporting elements for public review, comment and legal challenge in the courts. Rather, the agency believes it may merely change its website from time to time to require different reporting on a more informal and fluid basis without further public input and judicial review. While this EEO-1 revision is not an OFCCP initiative or proposal, the OFCCP jointly sponsors and pays for the federal government’s processing of EEO-1 reports. The OFCCP had earlier championed use of an “Equal Pay Report” to require “Government contractors” subject uniquely to OFCCP’s jurisdiction to report pay data to be used to target Government contractors for audit. The EEOC now picks up that purpose and reports that it feels the data “will improve investigations of possible pay discrimination.” The EEOC and Secretary of Labor Perez also believe this pay data reporting is justified because it will “help employers to evaluate their own pay practices to prevent pay discrimination in their workplaces.” However, no employer or Government contractor which commented on the OFCCP’s Equal Pay Proposal or on the EEOC’s EEO-1 proposed revision agreed that the data would be helpful and many pointed out that the data would be useless for any investigatory or legal purpose. Contractors and employers have also resisted the pay reporting and the EEOC and OFCCP’s conclusions that Government contractors and employers are the source of the Wage Gap since neither agency has historically or during the almost 8 years of the Obama Administration found more than small amounts of pay discrimination in isolated investigations involving very small numbers of employees despite annually spending hundreds of millions of dollars trying to find and prove pay discrimination. Indeed, the EEOC and state and local human rights agencies get fewer than 1,000 pay discrimination Charges each year (less than 1% of all Charges) and typically find “cause” in less than 20% of them. Also, OFCCP’s monumental pay discrimination efforts of the last almost 8 years have yielded fewer than 500 alleged victims in the course of over 25,000 audits of employee-level pay data resulting in finding Government contractors compliant in 99.7% of all audits and finding alleged non-compliance in only 1/4,000th of 1 percent in the over 12 million employee files the agency has meticulously reviewed in the past almost 8 years. The EEOC is offering free public Webinars on October 20 and October 26 to discuss its new EEO-1 reporting requirements (although no registration link is available at this time).
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.
Does the EEO-1 reporting changes also impact EEO-4 filers or is this strictly for EEO-1 filers?
Right now it is strictly for companies who file EEO-1 reports. I would not be surprised, though, if it quickly moves to include all others, including colleges and universities.