Category Archives: Compensation / Equal Pay

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

Strategic Considerations in Complying with the OFCCP’s New 503/VEVRAA Regulations – Job Groups

Recent changes to the Section 503 and VEVRAA regulations, along with the new itemized listing for OFCCP compliance reviews, require consideration of a number of strategic matters affecting how contractors choose to position themselves before and after receiving a scheduling letter.  Some of the key considerations include the creation and retention of records; the provision of those records to the OFCCP; and the structure of job groups in current AAPs.  These considerations are set forth in more detail below.

Job Groups

As discussed above, the OFCCP’s request for the mandatory eight (8) employee-level data points provides the Agency with limited alternatives for conducting preliminary data analysis of compensation.  The two probable groupings are EEO-1 category or AAP job group.  Even if the preliminary analysis is based on EEO-1 category and there is a follow-up request for the optional data, a secondary level of review using some form of mini-regression will likely drill down to a deeper level where AAP job group becomes the grouping for comparing compensation.

Continue reading Strategic Considerations in Complying with the OFCCP’s New 503/VEVRAA Regulations – Job Groups

Strategic Considerations in Complying with the OFCCP’s New 503/VEVRAA Regulations – Compensation Data

Recent changes to the Section 503 and VEVRAA regulations, along with the new itemized listing for OFCCP compliance reviews, require consideration of a number of strategic matters affecting how contractors choose to position themselves before and after receiving a scheduling letter.  Some of the key considerations include the creation and retention of records; the provision of those records to the OFCCP; and the structure of job groups in current AAPs.  These considerations are set forth in more detail below. 

Compensation Data

Item 19 of the Scheduling Letter requiring the provision of compensation data is substantially expanded from the prior version.  Item 19 now requires submission of “employee level” (e.g. individualized) compensation data.  This data includes: 

  • Employee ID or name
  • Gender
  • Race/ethnicity
  • Hire date
  • Job title
  • EEO-1 category
  • Job Group
  • Compensation 

Continue reading Strategic Considerations in Complying with the OFCCP’s New 503/VEVRAA Regulations – Compensation Data

Expansion of OFCCP Compensation Data Requests

With the new OFCCP scheduling letter mandating the submission of employee-level data, the Agency is now requiring eight (8) different items of individual data. These include gender, race/ethnicity, hire date, job title, EEO-1 category, job group, compensation (including additions to base pay) and by default, some type of employee identifier.  In addition, the Agency is suggesting that contractors provide six (6) additional items of individual data such as education, past experience, duty location, performance ratings, department or function, and salary level/band/range/grade.  Continue reading Expansion of OFCCP Compensation Data Requests

Revised OFCCP Scheduling Letter

On September 30, 2014, the OFCCP announced that the Office of Management and Budget (OMB) had approved most of the revisions to the OFCCP’s scheduling letter originally proposed in May of 2011. The revisions fundamentally change the data that must be collected and submitted to the Agency during the initial desk audit portion of a compliance review.  

Most striking is the expansion to 22 items, from 11, items that will have to be submitted in response to the receipt of a scheduling letter.   The OFCCP estimates that contractors will have to spend only 27.9 hours on evaluating instructions, searching data sources, gathering and maintaining data, and completing and evaluating the collection of the requested data.  This estimation speaks for itself.  Continue reading Revised OFCCP Scheduling Letter

Executive Orders and Presidential Memorandums

 On February 12, 2014, President Obama signed an Executive Order (EO) raising the minimum wage for new and renegotiated federal contracts to $10.10 an hour effective January 1, 2015. Then, on March 10, 2014, he issued a Presidential Memorandum (PM) instructing the Labor Department to review the eligibility requirements for overtime under the Fair Labor Standards Act (FLSA).  

On April 8, 2014, he signed another Executive Order regarding the “Non-Retaliation for Disclosure of Compensation Information.” Also on April 8, 2014, he issued another Presidential Memorandum instructing the Labor Department to propose a rule requiring federal contractors and subcontractors to submit summary data on compensation to the Labor Department by race and sex.  Continue reading Executive Orders and Presidential Memorandums