Category Archives: Compensation / Equal Pay

Clarification to Minimum Wage Increase News Flash

 

We realize that it has been a few years since the federal contractor minimum wage regulations from Executive Order 13658 have gone into effect.  Due to several questions that we have received, we have put together specific information as to what contracts are covered, what your organization should do if you are covered, and more.

Also, we are including a link to the poster for you to display, if you aren’t already, in a conspicuous place to satisfy the notice requirement of the regulations.  The new poster for the 2018 increase will be officially released shortly.

What Contracts Are Covered?

First, the minimum wage regs only cover “new” contracts which are entered into or existing contracts that are modified or extended after January 1, 2015.

Second, the regs only apply to the following contracts/subcontracts:

  • Procurement contracts for construction covered by the Davis-Bacon Act (DBA).  It does not include construction contracts covered by DBA related acts such as the Federal-Aid Highway Acts, the Community Development Act, or the American Recovery and Investment Act.
  • Service contracts covered by the Service Contract Act (SCA).  Coverage of the SCA is fairly specific.  A DOL fact sheet, discussing coverage of the act can be found here.  If you have a service contract that does not specify that it is covered by the SCA, the regs do not apply.
  • Contracts for Concessions where the federal government contracts for the provision of food, lodging, fuel, souvenirs, recreational equipment or newspaper stands in connection with the use of federal property, lands or facilities.
  • Contracts in connection with federal property or lands for the provision of services to federal employees, their dependents, or the general public.  The provision of supplies in support of these contracts is not covered by the regs.

Continue reading Clarification to Minimum Wage Increase News Flash

VETS-4212 Filing Deadline Extended / Federal Contractor Minimum Wage Increasing

VETS-4212

The Department of Labor has announced a 45-day extension to the deadline for filing the VETS-4212 Report.  The deadline has been pushed from September 30, 2017 to November 15, 2017. 

This announcement comes off the heels of Hurricanes Harvey and Irma, granting employers across the country extra time as business returns to normal.

MINIMUM WAGE INCREASE

In other news, the minimum wage for federal contractors and subcontractors will increase to $10.35/hour on January 1, 2018, up from the current rate of $10.20/hour.  The hourly rate for tipped employees will also jump to $7.25/hour, up from the current rate of $6.80/hour. 

This will be the third increase since Executive Order 13658 went into effect in January 2015.

Please don’t hesitate to contact our office with any questions.

New DOL Salary Level Test Blocked / EEO-1 Data Capture Period Announced

On August 31, a federal court in Texas ruled that the proposed increase in the salary threshold, from $23,660 per year to $47,476 per year to determine eligibility for overtime, is invalid as a matter of law.  This is the same court which imposed a temporary stay last November, preventing the increase from going into effect on December 1, 2016.  Last week’s action resulted in a permanent injunction.

In its opinion, the court explained that the Department of Labor overstepped its authority in determining overtime eligibility by concentrating too much on employee compensation, rather than job duties.   

If the rule had gone into effect as planned, the salary threshold test (the first stage of the exemption analysis) would have increased 100%, with further increases to follow every three years beginning in 2020. 

While this ruling may be appealed, we may not hear of further developments for some time.

In other news, following last week’s announcement that the current EEO-1 Report will remain in effect, the EEOC revealed that the “data reporting snapshot” for the upcoming report can be taken from a payroll period in either October, November, or December 2017.  Employers should begin to consider which period to use for the upcoming report, which is due March 31, 2018.

Employers who prepare their AAP’s on a calendar-year basis can utilize the same data snapshot for both the AAP and the EEO-1 Report.

Please don’t hesitate to contact our office with any questions regarding the above.

OMB Suspends New EEO-1 Report and Other OFCCP Updates

In a welcome announcement for employers, the Office of Management and Budget (OMB) informed the Equal Employment Opportunity Commission (EEOC) that the compensation and hours-worked components of the new EEO-1 Report have been delayed from implementation pending further review.

In other words, the “old” EEO-1 Report employers are familiar with will remain in effect.

In a memo to the EEOC, the Office of Information and Regulatory Affairs explained that the lack of a public comment period for the method of data submission, as well as the need for further study of the burden to employers, resulted in the recommendation to delay the new Report.

Although the previous form has been reinstated, employers will still need to submit 2017 data by the new deadline of March 31, 2018.  Further information regarding when to capture the employee data will be forthcoming shortly.

Despite the changes with the EEO-1 Report, be aware that federal contractors must still file the VETS-4212 report by September 30, 2017.

Shifting to the world of OFCCP, the Agency has started to offer “buyouts” to eligible employees ahead of a proposed $10 million budget cut.  With a reduction in staff on the horizon, employers will likely continue to see a decrease in compliance audit activity.  In addition, audits will be taking more time to complete.  The OFCCP’s union is estimating up to 50-75 agency employees could leave.  This reduced headcount will likely result in the closure of some number of district offices.

Finally, according to a letter from Acting Director Tom Dowd dated August 29, the Trump administration’s proposed merger of the EEOC and OFCCP will likely be delayed due to the need for legislative action to transfer enforcement authority from the Department of Labor to the EEOC.  Because of the length of time required, the likelihood of this merger being accomplished before the next election cycle, if at all, is dwindling. 

Please don’t hesitate to contact our office with any questions regarding the above.

Asking Applicants for Prior Salary: Options for the Future

Throughout 2017, more and more states and municipalities have introduced and enacted legislation barring employers from asking for or only considering a job applicant’s prior salary in formulating a job offer.  Following in the footsteps of Massachusetts, Oregon, Delaware, and more, roughly twenty-five states and the District of Columbia are considering their own prior salary measures. 

The rationale behind these prohibitions is that existing wage inequities are perpetuated when considering the applicant’s salary history to set starting pay.

Employers across the country now find themselves at a critical juncture and should be weighing their options.  So, what are some broad considerations that an organization should be thinking about with an eye toward the future?

A first option is to get ahead of the curve and eliminate all inquiries regarding prior salary altogether.  From an administrative standpoint, this would be the easiest option, as the inquiry about prior salary would be removed from all applications and interviewer questionnaires.  Continue reading Asking Applicants for Prior Salary: Options for the Future

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.

New Federal Overtime Regulations Released Effective December 1, 2016

 

New regulations changing the Fair Labor Standards Act (FLSA) regarding eligibility for overtime were published on May 17, 2016 by the U.S. Department of Labor (DOL). The FLSA sets rules governing minimum wage and eligibility for overtime. 

The changes consist of:

1.      A new minimum salary threshold before applying the  Executive, Professional or Administrative “Duties Test” of $47,476 annually ($913 per week), up from the current threshold of $23,660 annually ($455 per week).

2.    Up to 10% of the annual amount can consist of bonuses/commissions.  So, an individual making $45,000 annually but receiving a 10% bonus ($4,500) would meet the new threshold as their total pay would be $49,500, which exceeds the new $47,476 threshold.

3.       The effective date for the new regs is December 1, 2016.  This gives employers slightly more than six (6) months to complete their implementation strategy.

4.       The automatic adjustment to the salary level will now occur every three (3) years as opposed to annually.

5.       There has been no change to the Duties Test for Executive, Professional or Administrative employees. 

6.      The threshold for the Highly Compensated Employee exemption is now $134,404 annually.

This means that an individual must earn at least the new annual threshold ($47,476) before application of the FLSA’s “duties” exemption test can be considered. The “duties” test evaluates whether the individual meets one of the Executive, Professional, or Administrative exemptions. Continue reading New Federal Overtime Regulations Released Effective December 1, 2016

EEOC Proposes Adding Pay Data Collection to EEO-1 Report

On February 1, 2016, the EEOC published in the Federal Register proposed regulations to require employers with 100 or more employees to submit pay data along with their regular EEO-1 reports.  The proposed changes would be effective with the EEO-1 filing for September 2017.  The proposal also ends any efforts on the part of the OFCCP to implement their own compensation data collection protocol.

While the EEO-1 would continue to collect gender/race/ethnicity data by EEO-1 category, the proposal would require the submission of pay data and hours worked by EEO-1 category and by 12 salary bands mirroring the bands used by the Bureau of Labor Statistics (BLS) in the Occupational Employment Statistics Survey.  Employers would not have to provide actual wage data.  Rather, they would be required to report how many employees, broken down by gender/race/ethnicity, had W-2 earnings by EEO-1 category and salary band.  In addition, employers would have to report total hours worked by the employees in each band by race/gender/ethnicity.

Employers cannot use annual W-2 earnings for the purpose of preparing the report.  Rather, employers would have to perform a 12-month look back from any point between July 1st and August 31st.    In the proposal, the EEOC states that HRIS/payroll systems will allow employers to easily annualize this amount, in essence requiring employers to now come up with a second W-2 report for each employee. Continue reading EEOC Proposes Adding Pay Data Collection to EEO-1 Report

Executive Order 13665 – Non-Retaliation for Disclosure of Compensation Information Final Rule

On Friday, September 11th, the OFCCP released the final rule implementing Executive Order (EO) 13665 providing for Non-Retaliation for Disclosure of Compensation Information. The Rule becomes effective January 11, 2016. It will apply to new or modified federal supply and service contracts and subcontracts, as well as federally assisted construction contracts of more than $10,000 in value entered into or modified on or after that date. It will also apply to contracts or subcontracts that, in the aggregate, total more than $10,000, or financial institutions holding federal funds, or who are issuing and paying agencies for U.S. savings bonds in any amount.

The EO prohibits federal contractors and subcontractors from discriminating against employees and applicants who discuss, inquire about, or disclose information regarding compensation acquired through ordinary means such as a discussion between coworkers or through an anonymous note from a coworker. It does not require employers to disclose information regarding compensation in response to a demand from an employee or an applicant.

Continue reading Executive Order 13665 – Non-Retaliation for Disclosure of Compensation Information Final Rule