Category Archives: EEOC

OFCCP/EEOC Merger is off the Table

The prospect of having a combined OFCCP and EEOC is no more.  On September 12, the House of Representatives agreed to prohibit funds from being used to combine the two agencies, slamming the door to any possibility of a merger.

The House’s rejection follows in the footsteps of last week’s merger denial by the Senate Appropriations Committee.  Quoted by Bloomberg as calling the merger proposal “a total mess,” Rep. Bobby Scott (D-Va.), ranking member of the House Committee on Education and the Workforce, explained that each agency has its own distinct mission and that combining them would lead to “total confusion.”

President Trump proposed the idea of a merger to promote cost-savings and efficiencies in the government.  However, the idea of a combined OFCCP and EEOC was quickly met by staunch opposition by civil rights organizations and management-side stakeholders.

So, what does this mean for contractors? 

First, the House and Senate will soon be meeting to reconcile their proposed budgets for the OFCCP.  Currently, the OFCCP is funded with $105 million.  The Senate proposed to lower funding to $103.5 million, whereas the House proposed funding of $94 million.  These are both significantly higher than President Trump’s proposed funding of $88 million.  Regardless of the agency’s new level of funding, cuts will be made, whether in terms of personnel and/or district offices.

Second, and perhaps more importantly, unless there is a fundamental change in the implementing regulations or a change in the legal status of affirmative action, the mission and activities of the OFCCP will remain essentially unchanged.  AAPs will still be required.  The OFCCP will still be conducting audits, though the frequency and duration of audit activity is unknown.  Employers will still be required to perform outreach, maintain records, and conduct self-audits.  So, in essence, we believe it will be business as usual in terms of affirmative action and OFCCP compliance. 

Please don’t hesitate to contact our office with any affirmative action or OFCCP matter.

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.

Update on the Future of the New EEO-1 Report

Not a week goes by without the question being asked, “What should I be doing right now to prepare to file the revised EEO-1 Report?”  And the answer is:

“We still don’t know.”

As you are aware, the EEOC moved the filing date for the revised EEO-1 from September 30, 2017 to March 31, 2018.  This was done to ostensibly give employers additional time to gather the compensation data that now must be reported along with the customary employee demographic information provided to the Joint Reporting Committee.

However, there has been substantial controversy and conflicting reports as to whether the compensation reporting provision of the revised EEO-1 will survive in its current iteration.  What we do know is that:

  • Legislation has been introduced that would prevent the EEOC from spending any money to implement the new report.  Note that this would not do away with the requirement to gather and submit the data.
  • President Trump has nominated two Republicans to the remaining vacant EEOC Commission slots.  Janet Dhillon has been nominated to also be EEOC Chairperson, and Daniel M. Gade was nominated to the last open position.  The nomination and appointment of Chair Dhillon and Commissioner Gade would swing the make-up of the leadership of the EEOC to majority Republican.  This would seem to indicate a willingness to address the concerns voiced by the employer community regarding the revised EEO-1.
  • The U.S. Chamber of Commerce has petitioned the Office of Management and Budget (OMB) to re-evaluate the “burden estimate” to comply with the data collection and reporting requirements of the revised form.
  • On August 3, 2017, Acting EEOC Chairperson, Victoria Lipnic, announced at the National Industry Liaison Group (NILG) conference in San Antonio, TX that she had contacted the new head of the Office of Information and Regulatory Affairs (OIRA), Neomi Rao.  The OIRA is the office within OMB charged with reviewing proposed regulations as well as their implementation.  Acting Chair Lipnic has not been shy about voicing her opinion that the compensation portion of the revised EEO-1 is a “poster child” of the excessive regulatory burden that the current administration vowed to overturn after the election.  Acting Chair Lipnic has requested that OIRA and OMB provide employers with an answer by August 31, 2017 regarding the future of the revised EEO-1.

Speculation at the conference was that while the March 31, 2018 filing date would remain unchanged, implementation of the compensation and reporting component would likely be delayed a year. 
 
So, what should employers be doing now?  Our recommendation is to continue to wait, at least until the end of August, to see if there is any guidance forthcoming from the EEOC or OMB.  At that point, if there is still no information regarding future of the compensation component, then employers should begin to evaluate what will need to be done to file the revised EEO-1, including the compensation component, by March 31, 2018.   This should be accomplished, keeping in mind that between August 31, 2017 and March 31, 2018, much can change.

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. 

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?”