Proposed Merger of the OFCCP & EEOC – The Trump Administration Wants to See This Happen!

It’s officially on the table.  The 2018 budget proposal released yesterday by the Trump Administration officially calls for the merger of the OFFCP with the EEOC by the end of fiscal 2018 (September 30, 2018).  The proposal states:

“The proposed merger will benefit employers, workers, and the public by consolidating the oversight of federal equal employment opportunity under one roof.”

The budget also reduces funding for the OFCCP from $105M to $88M, a reduction of 16%.  This is expected to reduce Agency headcount from 571 employees in 2017 to 440 in 2018, a reduction of 131 employees or 23%.

The proposal also calls for establishing two Skilled Regional Centers, located in San Francisco and New York staffed with “…highly skilled and specialized compliance officers capable of handling various large, complex compliance evaluations in specific industries, such as financial services or information technology.”  The budget goes on to state that having these Centers, “…reduces the need for a network of field area and district offices.”  All of this points to the elimination of many of the District and Regional offices, and their staffs.

It is not clear what is meant by the phrase, “…handling various large, complex compliance evaluations…”  It could imply conducting compliance reviews of multi-establishment locations of a single contractor instead of the current focus on a single establishment.  This would be a major new development in the scope of compliance evaluations as well as conducting self-audits.

The budget anticipates that the Agency will continue to focus on systemic compensation discrimination and that 35% of conciliation agreements will be based on pay.  The other major focus will be on “…larger federal and federally-assisted construction projects…”

As an aside, since the proposal specifically references banks and IT organizations, this should be taken as a heads-up to these organizations that they should be anticipating in-depth reviews of their compensation practices. 

Preliminary reactions from the U.S. Chamber of Commerce and civil rights organizations have been to oppose the merger.  It is important to note that this is merely one of many proposals.  Comments from Senate and House Republicans have included statements that the budget will be “dead on arrival” when it reaches the respective legislative bodies.

It is important to keep in mind that even if the two Agencies do not merge, the OFCCP may still be looking at the loss of 16% of its funding and 23% of its staff as well as the fundamental restructuring of its operations.  This is just the opening salvo in the 2018 budget war.  Current indicators point to the legal concept of Affirmative Action and the associated compliance obligations continuing.  However, whether or not there is a merger, the enforcement protocols could be vastly different from what contractors have grown accustomed to under past administrations.

These remain interesting times.  We will keep you advised as further developments occur. 

The Future of the OFCCP, the Executive Order and Affirmative Action

It is with some trepidation that I even bring up this topic. However, as a practitioner of close to 40 years in the areas of affirmative action and EEO, I find myself more uncertain than ever before about the future of the Office of Federal Contract Compliance Programs (OFCCP), Executive Order (EO) 11246, and the legal principles behind affirmative action.

Ever since the election of Donald Trump, the future of affirmative action and the OFCCP has been a topic of discussion and conjecture in the legal, HR, and various stakeholder communities.  To the extent that commentators have been willing to weigh-in on the topic, most predictions have come down on the side that both the OFCCP and affirmative action as a legal principle are for the most part, “safe.”  However, just how “safe” things really are is far from certain.

On March 13, 2017, President Trump signed a new Executive Order directing the head of the Office of Management and Budget (OMB) to review every executive branch agency to identify “where money can be saved and services improved.”  OMB is to consider “… (ii) whether some or all of the functions of an agency, a component, or a program are redundant, including with those of another agency, component, or program…” and “… (iii) whether certain administrative capabilities necessary for operating an agency, a component, or a program are redundant with those of another agency, component, or program…”

Then, on March 16, 2017, President Trump’s 2017 budget was released.   The budget proposes a 21% reduction in funds for the Department of Labor (DOL).  There is nothing that indicates that the reductions will be spread evenly throughout the Department.  Some agencies and programs could experience larger reductions than others.

Six days later on March 22, 2017, Alexander Acosta, the nominee for Secretary of Labor, had his Senate confirmation hearing.  During the hearing, there was no discussion regarding his take on the future of the OFCCP.  However, in response to questioning, Acosta responded that he would follow the March 13, 2017 executive order.  Continue reading The Future of the OFCCP, the Executive Order and Affirmative Action

Corporate Scheduling Announcement Letters (CSALs) Mailed Out By OFCCP

The first CSAL mailing since 2014 was issued on February 17, 2017.  The letters were sent directly to establishments to the attention of the Human Resources Director.

CSALs are mailed directly to all establishments identified on the scheduling lists developed for a given scheduling cycle. Unlike previous years, OFCCP will not send notice to a corporation’s headquarters. Instead, the CSAL directs the establishment to forward the notice to corporate headquarters, if such is corporate policy.

There are 800 establishments on this first mailing for FY 2017, which covers 29 industries (based on reported NAICS codes) and 375 distinct companies.  This first release also includes 30 Corporate Management Compliance Evaluations (CMCEs). This means some organizations will receive letters for multiple establishments and some may receive a CMCE letter at their headquarters location.  OFCCP has not confirmed if/when another round of mailings will go out.

However, OFCCP clarified that a contractor’s establishment may be selected for a review outside of those receiving a CSAL notice.  The revised FAQ states, “These compliance evaluations may be scheduled by OFCCP when it receives credible information of an alleged violation of a law or regulations the agency enforces, including those deriving from individual or class complaints filed with the EEOC, or state or local fair employment practice agencies (FEPAs) that allege employment discrimination covered under the laws that OFCCP enforces.”

Corporate compliance officials should contact their local HR representatives at their company’s establishments to ensure they are aware that a letter from OFCCP or the Department of Labor may arrive in the next few days. Additionally, they should be aware that a CMCE letter may arrive at their corporate headquarters. Since OFCCP has once again given contractors advance notice of upcoming audits, it is highly recommended that employers take full advantage of this extra time to ensure they are prepared to submit complete and compliant AAPs and supporting documentation once they receive the audit scheduling notice.

Please contact us if there are any questions regarding the above.

New OFCCP Scheduling Letters Being Released?

Two independent sources have reported that the OFCCP is sending out new scheduling letters that were not preceded by the release of a Corporate Scheduling Announcement Letter (CSAL).  Previously, the OFCCP sent CSAL letters to contractors notifying them of the locations where the Agency planned to conduct compliance reviews.  The CSALs gave contractors a heads-up on pending reviews enabling them to begin preparation for the receipt of the scheduling letter.  In the past, CSALs had been sent out twice a year.  More recently, CSALs went out only once a year.  The last round of CSALs were sent out on November 10, 2014.  Compliance review activity for 2015 and 2016 was based on this last mailing.

While none of our clients have received a new scheduling letter, other sources are reporting that some contractors are receiving OFCCP scheduling letters for establishments not listed in the last CSALs.  These scheduling letters are being sent directly to the establishment the OFCCP plans to review.  The receipt of the scheduling letter triggers the thirty (30) day time period in which the targeted contractor must collect the data requested, conduct their own analysis of the data, and submit the data to the OFCCP.

A scheduling letter will typically be addressed to the General Manager or the HR Manager.  The letter is sent by “Certified Mail, Return Receipt Requested.”  The date the “Return Receipt Requested” card is signed triggers the start of the 30-day clock, not the date that the letter actually gets to someone who knows what the letter means and what is required.  For example, if the letter arrives at an establishment on March 1, 2017, addressed to the establishment’s General Manager who does not open it until March 10th, and he/she does not give it the HR Manager until March 17th, who does not notify corporate HR until March 20th, the Company only has ten (10) days in which to respond (by March 31st).

As such, we strongly recommend that all AAP locations be notified to stay alert for a possible letter from the OFCCP.  The OFCCP may call the facility prior to the receipt of the letter to confirm the name of the General/HR Manager as well as the correct mailing address.  Any calls from someone identifying themselves from the U.S. Department of Labor should be immediately reported to corporate HR and to our office if you work with our firm.  The receipt of any letter from the OFCCP should likewise be reported immediately.

Please contact us if there are any questions regarding the above.

Disability Self-ID Form Renewed for Three Years

On January 31, 2017, the Office of Management and Budget (OMB) approved the renewal of the Voluntary Self-Identification of Disability Form for an additional three (3) years.  The form now expires on January 31, 2020.

Although no changes were made to the form, contractors must immediately begin using the form with the expiration date “1/31/2020” in the top-right corner.

Depending on your organization, you may need to update your career site or applicant tracking system where the forms exist, as well as update all paper copies of the form.  To avoid any confusion, we recommend discarding all copies of the prior version.

Be advised that because the Self-ID form is an OMB-approved form, its content cannot be altered or changed.

For copies of the renewed form in English and other languages, please visit:

https://www.dol.gov/ofccp/regs/compliance/sec503/Self_ID_Forms/SelfIDForms.htm?utm_campaign=reengage2B&utm_medium=email&utm_source=govdelivery

If you would like to discuss the Self-ID form in more detail as it pertains to your specific organization, please do not hesitate to contact us.

New Form I-9 in Effect

In November 2016, the U.S. Citizen and Immigration Services (USCIS) revealed a revised version of the Form I-9.  As of January 22, 2017, all employers must begin using this new version (dated 11/14/2016 in the bottom-left corner).

The most prominent change to the new Form is that it is now available as both a traditional paper version and also as an interactive, fillable PDF document, allowing it to be completed with software found on most computers.  Being dubbed as a “Smart” document, the new PDF version has features such as drop-down menus and real-time error messages that will help both employers and employees properly complete the new Form.

Other minor changes include:

  • In Section 1, employees only need to provide “Other Last  Names Used (if any)” rather than “All Names Used.”
  • There are additional spaces to enter multiple preparers and translators. If you are using the “Smart” version, additional spaces will appear if you check the box indicating that more than one preparer or translator was used. If you are using the traditional paper version, the extra spaces are located on the Form I-9 Supplement.
  • In Section 2, there is now a dedicated space for “Additional Information,” eliminating the need to write comments and other miscellaneous information in the margins of the form as in the past.

To avoid any confusion, copies of the prior version, dated 03/08/2013, should be discarded.  The new I-9 has an expiration date of August 31, 2019.  Failure to use the revised Form may result in recently-increased penalties, which range from $216 to $2,156 for paperwork violations.

Be advised that even if your company uses E-Verify, all employers must use the Form I-9.  Utilizing E-Verify does not remove an employer’s obligation to complete the Form.

For copies of all versions of the Form as well as instructions on how to complete them, please visit:

https://www.uscis.gov/i-9

If you would like to discuss the new Form I-9 or E-Verify in more detail as they each apply to your specific organization, please do not hesitate to contact us.

New EEO-1 Report: “Should I Stay or Should I Go?”

In August 2016, after extensive debate, the EEOC announced the implementation of a revised EEO-1 Report requiring the reporting of W-2 compensation data by EEO-1 Category.  This will be further broken down by gender and race/ethnicity, and reported by twelve (12) different salary bands.  The report also requires the reporting of total hours worked.  Employers will now be required to report on all employees who worked during the reporting period, not just those who were employed as of the date of the data snap-shot.

For 2017, the snap-shot may capture the data at any time between October 1 through December 31, 2017.  The 2017 report will be due March 31, 2018.

The question now is what, if anything, should employers be doing to prepare for the new report?  And the answer is, not surprisingly, it depends.

Any discussion of the EEO-1 reporting requirement must recognize the reality that the future of the report is completely uncertain.  Implementation of the report occurred over the strenuous objections of the contractor community, the National Academy of Sciences, the U.S. Chamber of Commerce, SHRM, the National Association of Manufacturers, and the National Federation of Independent Businesses.  The election of Donald Trump and the nomination of Andrew Puzder as Secretary of Labor makes the future of the revised report unclear. Continue reading New EEO-1 Report: “Should I Stay or Should I Go?”

EOs & Regulations – Promise to Repeal

A cornerstone of President-Elect Trump’s election campaign was the promise to roll-back and eliminate regulations and Executive Orders (EOs) issued and implemented by the outgoing administration.   In just the employment arena affecting federal contractors, this includes:

  • EO 13658 – Minimum Wage for Federal Contractors
  • EO 13665 – Pay Transparency
  • EO 13672 – LGBT regulations
  • EO 13673 – Fair Pay and Safe Workplaces (“blacklisting” – currently blocked by federal courts)  EO 13706 – Paid Sick Leave
  • New regulations for affirmative action for Veterans and the Disabled
  • New regulations on discrimination on the basis of sex

In addition, there are regulations, rules, and expanded/new interpretations of existing rules affecting all employers regarding eligibility for overtime (blocked last week by a Texas district court); expedited union representation elections; “ban-the-box” limitations; increased OSHA fines; the Pregnant Workers Fairness Act; and the revised EEO-1 report requiring compensation data.

Continue reading EOs & Regulations – Promise to Repeal

Injunction on Overtime Regulations

For the third time in less than 30 days, a federal court has blocked an Obama Administration change to the nation’s employment and labor laws from going into effect.

On Tuesday, November 22nd, a federal district court in Texas issued a nationwide preliminary injunction blocking the new overtime eligibility regulations, which would have raised the salary threshold to $47,476 from the previous $23,660, from going into effect on December 1st as planned.

The court held that the Department of Labor (DOL) lacked the authority to change the threshold.  Rather, the court held that the exemption from overtime eligibility was based on the duties performed, not on the basic salary threshold.

Therefore, at the moment, none of the current practices regarding eligibility for overtime will change as of December 1st.  However, it is probable that the DOL will challenge the ruling to the Fifth Circuit Court of Appeals.  Whether the Court rules on the appeal prior to the change in Administrations remains to be seen.  If it does not, the new Administration can choose to either push the appeal, decline to push the appeal, or entertain new legislation rolling-back the change, which would make the appeal moot.

Employers who have already made changes in anticipation of the rule going into effect will need to evaluate those changes to determine whether they should remain in place or possibly be rescinded.

We will keep you posted of further developments with the injunction.

Fair Pay Injunction

In a significant “win” for federal contractors and subcontractors, a federal district court in Texas has issued a nationwide preliminary injunction against the implementation of the requirements to disclose labor law violations as well as the anti-arbitration provisions contained in the Fair Pay and Safe Workplaces regulations and guidance that were to be effective October 25, 2016.  The FAR Council and the U.S. Department of Labor issued the regulations and guidance on August 25, 2016.

The Court held that the Plaintiffs challenging the rule had demonstrated:  1) a substantial likelihood of success on the merits; 2) a substantial threat of irreparable injury; 3) that the threatened injury outweighs any damage the injunction would cause the Defendants; and 4) that the order will not be adverse to the public interest.

Specifically, the Court held:

  1. That the Executive Order, FAR Rules, and DOL Guidance, separately and together, exceeded the President’s, FAR Council’s, and DOL’s authority and are otherwise preempted by other federal labor laws.
  2. That the Executive Order, the FAR Rules, and the DOL Guidance violate the First Amendment in that they “compel speech.”
  3. That the Executive Order, the FAR Rules, and the DOL Guidance violate the Due Process Rights of Government Contractors and Offerors.
  4. That the New Rule and Guidance are arbitrary and capricious and entitled to no deference.
  5. That the Executive Order and FAR Council Rule violates the Federal Arbitration Act.

What this means is that for the time being, and pending further legal actions, federal contractors and subcontractors do not have to comply with the provisions of the regulations or guidance that were to be effective October 25, 2016.  These provisions and guidance relate to disclosing labor law violations or amending ADR programs as connected to Title VII, Sexual Harassment or Assault claims.

However, the Court did not enjoin the implementation of the Paycheck Transparency requirements that will still be effective January 1, 2017.  Contractors and subcontractors must continue to prepare to comply with this section, if applicable.

We will continue to monitor developments with this action and will notify you of any updates.

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