Employment Legislation & Federal Compliance | ADP

Employment Regulatory and Enforcement Activity Is Already

Underway. Are You Ready?

HR. Payroll. Benefits.

An employer’s guide to new regulations and initiatives that are currently being considered and implemented by federal agencies.

Vol. II 2013/2014 Issue

ADP TOTALSOURCE®

Contents

About the Report 1

Wages and Hours Worked 2

Immigration 6

Workplace Safety 10

Equal Employment Opportunity Commission 13

Federal Contractors 17

Conclusion 23

About ADP TotalSource® 23

About Jackson Lewis 23

President Obama won the November 2012 election, while Republicans maintained control of the House of Representatives. However, with Democrats still holding control of the Senate, Congress remains closely divided. As a result, continuing a trend that started with the 2010 midterm Congressional elections, there has been no new federal labor and employment legislation passed since early 2010.

The legislative stalemate, however, has not slowed regulatory and enforcement activity by federal agencies. Despite the Sequester — automatic federal budget cuts that kicked in March 1, 2013 — many agencies, including the U.S. Department of Labor (DOL), Equal Employment Opportunity Commission (EEOC), Occupational Safety and Health Administration (OSHA), Office of Federal Contract Compliance Programs (OFCCP), and Department of Homeland Security (DHS) have been busy changing and updating federal labor and employment regulations and enforcing those regulations.

In addition, many agency initiatives come from outside the regulatory rule-making process. These initiatives and programs are not subject to the strict rule-making process, which would include public notice and an opportunity for the public to comment on the proposed rules. Such initiatives and programs have the potential to shape agency policy and can have an important impact on employer operations.

The new Secretary of Labor, Thomas E. Perez, who was approved by the Senate in July 2013, fully supports statements made by his predecessor, Hilda Solis.

About the Report

Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready? 1

Federal agencies have also openly stated their commitment to change, as part of fulfilling their overall mission statement. The new Secretary of Labor, Thomas E. Perez, who was approved by the Senate in July 2013, fully supports statements made by his predecessor, Hilda Solis. In January 2013, Solis said, “We know the market alone will not protect workers and will not guarantee a secure retirement… [DOL’s] regulatory work is crucial to protecting and strengthening the middle class.”

The purpose of this special report is to provide employers with information to prepare for, and plan for, the new regulations and initiatives and those that are currently being considered by federal agencies.

Are you ready?

2 Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?

The U.S. Department of Labor (DOL) is an agency that enforces many federal labor and employment laws discussed in this report, including laws regarding workplace safety and federal contracting. One of DOL’s divisions, the Wage and Hour Division, also enforces a key wage-and-hour law called the Fair Labor Standards Act (FLSA). This law has received renewed attention and vigor under the Obama administration. In federal FY 2012, DOL collected more than $97 million in back wages for more than 124,000 employees.

PEREz REPLACES SOLIS AS SECRETARy OF LAbOR

In a move surprising to the employment community, Secretary of Labor, Hilda Solis, submitted her resignation to President Obama in January 2013, creating a vacancy at the DOL’s highest post.

On July 18, 2013, the Senate approved President Obama’s nominee, Thomas E. Perez, to replace Solis and become the nation’s 26th Secretary of Labor. Perez has spent his entire career in public service and joined the department on July 23, after serving as the assistant attorney general for the Civil Rights Division at the U.S. Department of Justice. Perez is expected to continue the DOL’s tough stance on enforcement and regulatory initiatives.

“APP” COmPETITIOn TO InCORPORATE EmPLOyER VIOLATIOn DATA

Building upon its prior efforts to leverage contemporary technology, the DOL has announced an “app” competition, inviting the public to create an app to incorporate its data regarding labor investigations “with consumer ratings websites, geo-positioning Web tools, and other relevant data sets, such as those available from state health

Wages and Hours Workedboards.” This is not the DOL’s first attempt to put its data, regarding purported violations, on the Internet and in the public eye.

Employers must continue to strive for compliance with wage-and-hour laws, and should regularly monitor whether allegedly aggrieved individuals, attorneys or governmental entities — including the DOL through this or other initiatives — are publicizing any purported claims on the Web.

D.C. CIRCuIT COuRT STRIkES DOWn 2010 DOL ADmInISTRATOR’S InTERPRETATIOn REgARDIng FLSA STATuS OF LOAn OFFICERS

In 2010, the Department of Labor announced it would cease its “opinion letter” practice, wherein employers could submit written questions regarding application of the FLSA and its implementing regulations, and receive guidance. Replacing the opinion letter structure was an “Administrator’s Interpretation,” in which the DOL would simply issue an advisory opinion on its own volition. Contemporaneous with announcing this new practice, the DOL issued its first Administrator’s Interpretation, and took the position that mortgage loan officers generally do not qualify for exemption from overtime under the administrative exemption. This Interpretation directly contradicted the DOL’s prior analysis of the same issue (presented in the traditional opinion letter fashion) provided just four years previously. In response to this DOL action, the Mortgage

In federal FY 2012, DOL collected more than $97 million in back wages for more than 124,000 employees.


Bankers Association filed suit challenging the DOL’s authority to change its position. The Court of Appeals for the District of Columbia Circuit ruled that the DOL’s reversal violated the Administrative Procedure Act (APA), and thus the Administrator’s Interpretation is invalid. See Mortgage Bankers Ass’n v. Harris, 2013 U.S. App. LEXIS 13470 (D.C. Cir. July 2, 2013).

COngRESSIOnAL SubCOmmITTEE DEbATES ExTEnSIOn OF “COmP TImE” unDER THE FLSA FOR PRIVATE EmPLOyERS

Revisiting a concept for the first time since 2009, a House of Representatives Subcommittee recently conducted a hearing regarding the Working Families Flexibility Act (H.R. 1406). The Act, proposed on April 9, 2013, seeks to amend the FLSA to permit private-sector employers to compensate employees for overtime work by providing compensatory time off (e.g., “comp time”), in lieu of cash overtime wages. Under current law, only public-sector employers are allowed to make such payments in lieu of overtime pay.

Supporters cite the flexibility, particularly for working families, that the availability of comp time provides. On the other hand, detractors claim that permitting payment for overtime work through time off will unfairly reduce the wages currently earned by nonexempt overtime eligible workers.

“In amending the FLSA to permit public-sector employers to provide compensatory time off, Congress implicitly acknowledged the strain on public budgets imposed by a cash overtime requirement,” observed former Wage and Hour Administrator Paul DeCamp. “The proposed bill acknowledges that the same budgetary strain attaches to overtime work for private-sector employers, many of whom are small or medium-sized businesses regulated by the FLSA through its expansive coverage provisions.”

While previous efforts to pursue such a rule change were unsuccessful, prevailing economic

conditions may force Congress to give more consideration to the proposal than in prior years.

DOL COnTInuES “WE CAn HELP” CAmPAIgn AImED AT InCREASIng EnFORCEmEnT

“We Can Help” is a campaign designed to educate workers about their rights under the FLSA. The campaign includes, among other features, a separate website with links to pages explaining the rights of workers and Public Service Announcements — in both English and Spanish by Hollywood stars, including Jimmy Smits and Esai Morales. Secretary Solis and Dolores Huerta (co-founder of the United Farm Workers of America, AFL-CIO) also recorded PSAs in support of the campaign.

“We Can Help” appears to be targeted toward specific industries, such as construction, day laborers and farm workers, and it clearly reaches out to noncitizens and/or undocumented workers. The campaign’s encouragement of self-action in employee record keeping, coupled with the media blitz, will likely increase complaints filed with the DOL. To that end, the DOL added some 250 additional investigators, in large part to support this campaign.

DOL COLLAbORATIOn WITH THE AmERICAn bAR ASSOCIATIOn

The DOL continues to partner with the American Bar Association (ABA), which is a national association of lawyers. Under this partnership, FLSA or Family and Medical Leave Act (FMLA)complainants, who are informed that the DOL is declining to pursue their complaint, are provided a toll-free number to contact a newly created,

Employers must understand that the burden is on them to obey the law, not on the DOL to catch them violating the law.


ABA-sanctioned Attorney Referral System. The DOL has also pledged to provide prompt, relevant information and documents on the referred case to complainants and the referral attorney electing to take the case including but not limited to a list of any violations found and the amount of back wages owed.

DOL’S “PLAn/PREVEnT/PROTECT” REguLATORy InITIATIVE

Pursuant to the DOL’s “Plan/Prevent/Protect” initiative, employers and others must “find and fix” violations — that is, assure compliance — before a DOL investigator arrives at the workplace. Employers must understand that the burden is on them to obey the law, not on the DOL to catch them violating the law. This is the heart of the DOL’s new strategy. Simply put, the DOL hopes to replace “catch me if you can” with “Plan/Prevent/Protect,” if a regulation is finalized.

Although the specifics would vary by law, industry and regulated enterprise, this strategy would require (at some unknown point in the future) all regulated entities to take three steps to ensure safe and secure workplaces and compliance with the law:

Plan: DOL will propose a requirement that employers and other regulated entities create a plan for identifying and remediating risks of legal violations and other risks to workers — for example, a plan to review potentially unlawful pay practices. The employer would provide their employees with opportunities to participate in the creation of the plans. In addition, the plans would be made available to workers so they can fully understand them and help to monitor their implementation.

Prevent: DOL will propose a requirement that employers thoroughly and completely implement the plan in a manner that prevents legal violations. The plan cannot be a mere paper

process. The employer cannot draft a plan and then put it on a shelf. The plan must be fully implemented for the employer to comply with the “Plan/Prevent/Protect” compliance strategy.

Protect: DOL will propose a requirement that the employer or other regulated entity ensures that the plan’s objectives are met on a regular basis. Just any plan will not do. The plan must actually protect workers from violations of their workplace rights.

Employers who fail to take these steps to address comprehensively the risks, hazards, and inequities in their workplaces will be considered out of compliance with the law and, depending upon the agency and the substantive law it is enforcing, subject to remedial action.

“RIgHT TO knOW” REguLATIOn

From an employer’s perspective, one of the most difficult challenges associated with the FLSA is properly classifying employees as exempt or non-exempt. This is an important distinction. Exempt employees are not entitled to be paid overtime, while nonexempt employees are.

DOL has proposed a new rule, entitled the “Right to Know under the Fair Labor Standards Act,” that would require employers to produce a written “classification analysis” to justify exempt employee status (and/or independent contractors status) for each employee. This proposed rule has

This proposed rule (Right to Know under the Fair Labor Standards Act) has generated interest in the employer community because of the potential burden and cost that itwould place on employers.


generated interest in the employer community because of the potential burden and cost that it would place on employers.

DOL LAunCHES TImESHEET APPLICATIOn FOR SmARTPHOnES

What happens when an employee is misclassified as exempt by an employer? That employee may be owed several years of overtime compensation (and additional penalties may apply). In order to determine the amount of compensation due, the DOL may ask the employee to construct a record of hours worked. This has now become an easier task for employees.

The DOL launched its first application for smartphones, described as “a timesheet to help employees independently track the hours they work and determine the wages they are owed.” Users can track regular work hours, break time, and any overtime hours they work for one or more employers, according to the DOL press release on the application. The free “app” is compatible with iPhone® and iPod touch® and is available in English and Spanish.

The DOL predicts that workers’ information “could prove invaluable” during an investigation of employers accused of failing to maintain accurate time records. Indeed, the app will allow workers to “email the summary of work hours and gross pay as an attachment” to DOL investigators. The app provides a “[glossary, contact information and materials about wage and hour laws through links to the Web pages of the department’s Wage and Hour Division.” According to former Secretary of Labor Solis, “This app will help empower workers to understand and stand up for their rights when employers have denied their hard-earned pay.”

The DOL also is considering future updates to enable use on other smartphone platforms, such as AndroidTM and BlackBerry®, and to

capture information on types of pay not currently addressed, “such as tips, commissions, bonuses, deductions, holiday pay, pay for weekends, shift differentials and pay for regular days of rest.”


As noted on the website of the Department of Homeland Security (DHS) by (then) Secretary of Homeland Security, Janet Napolitano, “DHS has forged a smart and effective approach to enforcing our immigration laws and prioritizing public safety while targeting criminal aliens and aggressively pursuing employers that knowingly take advantage of illegal labor.” While at the time of writing this special report, Napolitano has resigned and has not yet been replaced, there is no doubt that DHS will continue to focus on businesses that hire undocumented workers, and not the workers themselves.

This change in approach — from one that emphasized punishing the illegal foreign worker to one that emphasizes punishing the employer that hired the worker — is designed to reduce the demand for illegal employment by focusing on employers suspected of employing illegal or unauthorized workers.

It is also an approach that is being supported by stepped-up regulatory enforcement. Under the Obama administration, DHS has conducted more audits and debarred more employers for hiring illegal immigrants than in the entire tenure of the prior administration. Employers should take notice.

nEW VIDEO EDuCATES EmPLOyERS AbOuT THE I-9 PROCESS

The Department of Justice (DOJ) has launched a new educational video to assist employers in avoiding charges of discrimination in the employment eligibility verification Form I-9 process and in the use of E-Verify. The video also aims to help educate employees about their legal rights.

The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) within the DOJ’s Civil Rights Division enforces the antidiscrimination provision of the Immigration and Nationality Act (INA). That provision prohibits employers from discriminating against work-authorized individuals in hiring, firing, recruitment, or referral for a fee, regardless of their citizenship status or national origin. The law also prohibits discrimination during the Form I-9 and E-Verify processes.

The OSC has developed its latest video to address issues that frequently arise from calls to its hotline and charges that are filed. The DOJ explained that employers sometimes incorrectly believe they need to request more documents than are necessary for the employment eligibility verification Form I-9. Employers using E-Verify also may improperly request specific documents due to a

Immigration

Employers using E-Verify also may improperly request specific documents due to amisunderstanding of E-Verify requirements.


misunderstanding of E-Verify requirements. The new video highlights some of the practices that are not permissible and may lead to claims under the INA’s antidiscrimination provision.

uSCIS mAy bE COnTACTIng yOuR EmPLOyEES

On July 1, 2013, U.S. Citizenship and Immigration Services (USCIS) announced its latest “customer service enhancement” to E-Verify. If an employee voluntarily provides his or her email address on the Form I-9, E-Verify will notify the employee directly of a Tentative Non- Confirmation (TNC) at the same time it notifies the employer. Given that E-Verify monitors how an employer complies in a timely manner with its contractual obligations to the Government, employers must review their standard operating procedure to ensure it does not run afoul of the law.

But now that E-Verify is also “deputizing” employees — by notifying them and encouraging them to report alleged discrimination or unfairness — employers must also confirm that information being transmitted via E-Verify to the Government mirrors the documents provided by the new hire, and that each employee is treated in a uniform and consistent fashion. Systems may have to be implemented to provide such assurance.

In addition to providing the initial notice of a TNC, E-Verify will send reminder emails to employees if no action to resolve the TNC has occurred within four days of a decision to contest and notify them about the possible need to update a Social Security or Department of Homeland Security record.

FEDERAL AgEnCIES TO COOPERATE TO InCREASE PROSECuTIOnS FOR ImmIgRATIOn- RELATED mATTERS

The United States Department of Justice announced on July 8, 2013, that its Civil Rights Division’s Office of Special Counsel for Immigration–Related Unfair Employment Practices (OSC) has entered into a Memorandum of Understanding (MOU) with the National Labor

Relations Board (NLRB) that will allow both agencies to share information, to refer matters to each other concerning potential violations of the laws governed by the respective agencies, and to coordinate multiagency investigations.

The MOU was designed to encourage employees to seek redress for violations under the appropriate laws and through the appropriate federal agencies, even though such a claim may have been initially brought to the attention of the wrong agency. “Employers cannot avoid liability under the law just because an employee has turned to the wrong agency or is unaware of additional protections available under a different law,” said Gregory Friel, Deputy Assistant Attorney General for the Civil Rights Division.

The MOU will allow the OSC to make referrals to the NLRB with the express authorization of the complaining party when the matter investigated by the OSC suggests a violation of the NLRA. Likewise, the OSC can expect to receive referrals from the NLRB when the matter before it suggests a possible unfair immigration-related employment practice, such as demanding specific documentation for the employment authorization verification process for completion of the Form I-9 form or discrimination based on citizenship status or national origin. The MOU further provides for cross training between the two federal entities, as well as technical assistance for identifying and making appropriate referrals. The OSC maintains more than 50 similar agreements with other federal, state, and local agencies including the Equal Employment Opportunity Commission (EEOC).

Employers must use the new Form I-9 beginning on May 7, 2013 or theywill be subject to penalties…


The NLRB, often inaccurately thought of as being interested only in collective bargaining and union organizing issues, has in recent years pursued violations by nonunion employers. Among other things, the NLRB has brought to light violations in common workplace policies at numerous, unwary, employers.

nEW FORm I-9 muST bE uSED bEgInnIng mAy 7, 2013

On April 9, 2013, U.S. Citizenship and Immigration Services (USCIS) published a notice in the Federal Register clarifying the date by which the new Form I-9 must be used instead of prior versions of the form. Employers are advised that they must use the new Form I-9 beginning on May 7, 2013, or they will be subject to penalties under Section 274A of the Immigration and Nationalization Act (INA).

gOOD FAITH nOT A DEFEnSE TO SubSTAnTIVE I-9 VIOLATIOnS

An employer who failed to complete a Form I-9 Employment Eligibility Verification Form within three days of an employee’s start date commits a substantive violation for which the good faith defense is not available to mitigate the assessed fine, according to a recent ruling from the Office of the Chief Administrative Hearing Officer (OCAHO) of the Department of Justice’s Executive Office for Immigration Review. See United States of America v. Anodizing Industries Inc., OCAHO Case No. 12A00030, May 24, 2013.

DHS, Immigration and Customs Enforcement (ICE) filed a complaint alleging that Anodizing Industries, Inc. of Los Angeles, California, had hired 26 named employees for whom it failed to timely prepare Forms I-9 within three days of their start dates. The length of time between the start dates of the employees and dates of completion of their respective Form I-9 form ranged from a matter of weeks to 22 years. The company argued that it had complied in good faith with the employment verification requirements in hiring the 26 employees, and that the proposed fines were excessive and should be mitigated under the statutory penalty factors. ICE sought a total of $25,525.50 in civil money penalties.

The Administrative Law Judge (ALJ) held that a failure to prepare a Form I-9 when hiring a new employee is not a technical or procedural failure, but rather is substantive in nature. Moreover, the failure to prepare a Form I-9 in a timely fashion not only is a substantive violation, but also a serious one because, the ALJ explained, an employee working on the job could be unauthorized for employment during the entire time his or her eligibility remains unverified. Furthermore, the longer an employer delays in preparing a Form I-9, the more serious is the violation.

An employer who failed to complete a Form I-9Employment Eligibility Verification Form withinthree days of an employee’s start date commitsa substantive violation…

The registry, expected to launch July 1, will include information about cases certified as far back as April 2009. New cases will be available as early as two business days after certification. The registry will be a searchable database. Users will be able to pull up online information, as well as redacted PDF copies of the applications. DOL will redact employee names, employee personal information, employer FEINs and other sensitive information. The identities of employers who are sponsoring foreign nationals for employment, and names of the positions involved, however, will be disclosed. As a result, the public will have more access to employment opportunities available by position, company, industry, and location.

nEW COmPREHEnSIVE POLICy mAnuAL

USCIS has spent the last four years creating a one-stop shop for all laws, regulations and policy guidance it administers or promulgates. USCIS has unveiled “version 1.0” of its effort. The online USCIS Policy Manual (Manual) is available at www.uscis.gov. USCIS Director, Alejandro Mayorkas, on January 15, 2013, stated the intention of the Manual is to bring consistency, predictability and transparency to the legal authority and policies that drive USCIS petition adjudication. Previously, to access the pertinent laws, regulations and policies related to a specific subject matter handled by the USCIS, information would have to be collected from a number of different resources, independently housed by the issuing agency. These resources included the Adjudicator’s Field Manual and a collection of memoranda, legislation, regulations and interpretive guidance coming from different agencies. These materials will now be replaced by a centralized repository of all relevant policy guidance and legal authority.


Accordingly, the good faith defense was not applicable and the company was not entitled to notice and opportunity to cure the violations.

The good faith defense, thus, is limited to technical or procedural failures to comply with a partial verification requirement, rather than to failures to comply with the verification requirement as a whole. The defense did not alter or affect the necessity of completing the Form I-9 within three business days of the start date or of retaining the forms for the required period of time. Omissions and delays can prove costly. Each failure to properly and timely prepare, retain, or produce the forms in accordance with the requirements of the employment verification system is a separate violation of the Act.

Despite certain mitigating factors (none of the employees were unauthorized workers, there was no prior history of Form I-9 violations, and Anodizing was a small business), the ALJ still affirmed an adjusted penalty of $15,600, as a matter of discretion, reduced from the $25,525.50 originally sought by ICE.

nEW, SEARCHAbLE REgISTRy OF LCA AnD PERm APPLICATIOnS WILL bE AVAILAbLE

DOL is launching an online registry to publish data from certified PERM (Program Electronic Review Management) and Labor Condition Applications (LCA) filed via its online iCERT system.


The Occupational Safety and Health Administration (OSHA) is the federal agency responsible for workplace safety. David Michaels, the head of OSHA, has publicly said that employers can expect a lot of progress on federal regulations in 2013, along with the agency continuing a tough enforcement stance for existing laws and regulations.

OSHA WILL COnTInuE AggRESSIVE EnFORCEmEnT

According to its Budget Justification Document, in FY 2014, OSHA proposes to continue its aggressive enforcement posture. The Budget Justification cites a recent study published in Science magazine, entitled Randomized Government Safety Inspections Reduce Worker Injuries with No Detectable Job Loss, which claimed that enforcement inspections result in safer workplaces and provide employers with significant savings through reduced workers’ compensation costs. OSHA states in the Justification that “the average employer saved $355,000 (in 2011 dollars) as a result of an OSHA inspection.” The Justification also states that OSHA is currently working with the Department of Labor’s policy office to “test the impact of inspections on injury and illness rates and overall compliance with OSHA standards and regulations for establishments on OSHA’s targeted inspection lists.”

OSHA also seeks an increase in funding for its standard-setting activities, including an increase in $2 million dollars for “contract support for the agency’s rule-making efforts to protect workers from complex and dangerous hazards.” With the funding requested:

OSHA projects that it will issue four Final Rules (Infectious Disease, Record-keeping Modernization, Beryllium, and Vertical Tandem Lifts), seven Notices of Proposed Rule-making

(Standards Improvement Project Phase IV, Infectious Disease, Injury and Illness Prevention Programs, Combustible Dust, Backover Protection, and two consensus standard update actions), and initiate SBREFA (Small Business Regulatory Enforcement Fairness Act) reviews for five rules (Combustible Dust, Backover Protection, one chemical standard, and two other initiatives).

OSHA is requesting a significant decrease in funding for its Federal Compliance Assistance programs. State OSHA-program support and State compliance assistance would remain the same under OSHA’s 2014 Budget request.

The Budget Justification is a good indicator of the priorities of the Agency. The Agency will continue to emphasize enforcement and regulatory activities, and employers should continue to monitor the Agency’s efforts in these areas.

OSHA LAunCHES TEmPORARy WORkER InITIATIVE

OSHA has launched an initiative that focuses on protecting temporary employees from recognized workplace hazards. Under this initiative, OSHA is directing all OSHA compliance officers to assess whether employers, who use temporary workers,

Workplace Safety


are complying with their responsibilities under the Occupational Safety and Health Act of 1970. For purposes of this initiative, temporary workers are defined as all employees supplied to a host employer and paid by a staffing agency.

As part of their inspections, OSHA compliance officers will determine whether any employees are temporary workers and whether any of the identified temporary employees are exposed to a violative condition. They also will assess, by records review and interviews, whether temporary workers received appropriate training in a language and vocabulary they can understand. OSHA compliance officers will pay particular attention to whether temporary workers are trained in how to protect themselves from serious hazards, such as wearing appropriate protective equipment when working with hazardous chemicals and the lockout/tagout procedures and protections.

OSHA compliance officers also will be required to document the name of each temporary worker’s staffing agency, the agency’s location, the supervisory structure of both the host employer workers and staffing agency, and the extent to which temporary workers are being supervised on a day-to-day basis by either the host employer or the staffing agency.

OSHA CLARIFIES THAT WORkERS mAy AuTHORIzE A unIOn OR COmmunITy ORgAnIzATIOn TO ACT AS THEIR REPRESEnTATIVE

OSHA released a new interpretation letter on April 5, 2013, clarifying that nonunion employees may select a non-employee who is “affiliated with a union” or with a “community organization” to act as their walk-around representative during OSHA inspections of their employer’s worksite. In reaching this conclusion, OSHA concluded that language in the Occupational Safety and Health Act authorizes participation in the walk-around portion of an OSHA inspection by a person affiliated with a union without a collective bargaining agreement or with a community representative so long as the individual has been authorized by the employees to serve as their representative.

WHISTLE-bLOWER CLAImS ARE On THE RISE

Employee claims of retaliation have risen steadily on a year-to-year basis and recent government statistics suggest this is a continuing trend. OSHA, which enforces 22 separate federal whistle-blower statutes, has issued updated statistics showing the number of whistle-blower cases filed with the agency — and their outcome. According to the report, OSHA completed a total of 2,769 cases in 2012, a significant increase from the 1,948 completions in 2011. This continues an upward trend going back several years. The number of complaint “determinations” in 2012 was 2,867, a 42 percent increase from the 2,013 “determinations” in 2011.

According to the report, OSHA completed a total of 2,769 cases in 2012, a significant increase from the 1,948 completions in 2011.


InJuRy AnD ILLnESS PREVEnTIOn PROgRAm (IIPP) IS STILL A PRIORITy

OSHA’s proposed IIPP rule has been the agency’s most significant regulatory priority. Although it has been under development for three years, OSHA has indicated that it is ready to begin the Small Business Regulatory Enforcement Fairness Act (SBREFA) process for the rule, in which the agency solicits input regarding the rule from affected small business entities. Employers should remain alert to this agency priority; it is likely to have a broad impact when promulgated.

STRICTER InJuRy AnD ILLnESS REPORTIng ObLIgATIOnS

OSHA has proposed requiring employers to report workplace amputations to the agency within 24 hours, and all in-patient hospitalizations within eight hours. Existing record-keeping rules require employers to report in-patient hospitalizations of three or more employees to OSHA within eight hours. Any workplace fatality would continue to be reportable as well. In addition, OSHA’s proposed revisions to the record-keeping rules would change the kinds of establishments that are routinely exempt from record-keeping obligations.

nEW InJuRy AnD ILLnESS PREVEnTIOn PROgRAmS FACT SHEET

A new OSHA fact sheet describes some common program elements of Injury and Illness Prevention Programs and how to implement them. These preventive programs help employers locate and correct workplace hazards before workers are

hurt or become ill. These proactive programs can substantially reduce the number and severity of workplace injuries and illnesses, and can alleviate the associated financial burdens on U.S. workplaces, according to OSHA.

The fact sheet explains the major elements of an effective program, which include management leadership; worker participation; hazard identification, assessment, prevention and control; education and training; and program evaluation and improvement. Thirty-four states and many nations around the world already require or encourage employers to implement similar programs, OSHA said.

Existing record-keeping rules require employers to report in-patient hospitalizations of three or more employees to OSHA within eight hours.


Equal Employment Opportunity Commission

The EEOC announces that its number one enforcement priority for the next four years will be targeting class-based recruitment and hiring discrimination.

The Equal Employment Opportunity Commission (EEOC) is a federal agency that enforces many federal discrimination laws, including those that prohibit discrimination based on race, sex, religion, color, national origin, disability, and age.

Jacqueline Berrien, Chair of the EEOC, has noted that while “blatant forms of discrimination have receded, more sophisticated, but equally effective methods of restricting employment opportunities, have emerged — not only for people with disabilities, but also on the basis of race, color, national origin, religion, and sex…The EEOC will continue to work to meet new and emerging challenges in order to ensure the equality of employment opportunity to all.”

TARgETIng CLASS-bASED DISCRImInATIOn TOPS EEOC’S AmbITIOuS 2013-2016 STRATEgIC EnFORCEmEnT PLAn

The EEOC has announced the final approval of its 2013-2016 Strategic Enforcement Plan (“SEP”). This is a revised version of the draft SEP the EEOC issued on September 4, 2012. Consistent with the draft SEP, in the final SEP the EEOC announces that its number one enforcement priority for the next four years will be targeting class-based recruitment and hiring discrimination. The priorities listed by the EEOC are as follows:

1. Eliminating barriers in recruiting and hiring. As part of this effort, the agency will also focus on exclusionary policies and practices that allegedly steer individuals into specific jobs due to their status in a particular group.

2. Protecting immigrant, migrant, and other vulnerable workers. The EEOC lists disparate pay, job segregation, harassment, and human trafficking as particular practices it will pursue vigorously.

3. Addressing emerging and developing issues. These include: a) Americans with Disabilities Act reasonable accommodation, coverage, qualification standards, and employer’s use of the undue hardship and the direct threat defense; b) Accommodating pregnancy-related limitations under both Title VII of the Civil Rights Act and the ADA; and c) Seeking protection for lesbian, gay, bisexual, and transgender individuals under Title VII.

4. Enforcing the equal pay laws through the use of “directed investigations” and Commissioner Charges.

5. Preserving access to the legal system, which includes proceeding against employers who engage in retaliatory practices or use overly broad settlement waivers.

6. Preventing harassment through both litigation and educational outreach.


TITLE VII PROHIbITS DISCRImInATIOn AgAInST TRAnSgEnDER WORkERS

Transgender discrimination is discrimination on the basis of “sex” under Title VII of the Civil Rights Act, the EEOC decided in an historic opinion. — Macy v. Holder, Appeal No. 0120120821 (Apr. 20, 2012). The case arose out of a dispute between job applicant, Mia Macy, and the federal agency that would have been her employer, the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATFE”). When Macy applied for a job, she presented as male. Shortly thereafter, Macy informed ATFE that she was transitioning from male to female. Subsequently, ATFE informed Macy that another applicant had been hired because that applicant was farther along in the background-check process. Macy filed a complaint against ATFE with the EEOC alleging that the reasons proffered for not hiring her were pretextual and that the true reason was because of her “sex, gender identity (transgender woman) and on the basis of sex stereotyping.”

The EEOC agreed with Macy. It held that Title VII of the Civil Rights Act of 1964 bars discrimination not only on the basis of biological sex, but also because of gender stereotyping. The EEOC then reasoned that Macy could establish a viable sex discrimination claim on the grounds that ATFE believed that biological men should present as men and wear male clothing, or, alternatively, that ATFE was willing to hire a man, but not a woman. Either way, the EEOC concluded, transgender discrimination is discrimination “based on…sex” and violates Title VII.

Macy v. Holder signals a turning point in employment discrimination law on a national level. The EEOC undoubtedly will view any allegation of transgender discrimination as unlawful sex discrimination in negotiations with employers and in agency-sponsored litigation.

nEW EnFORCEmEnT guIDAnCE On uSE OF ARREST AnD COnVICTIOn RECORDS In EmPLOymEnT

The EEOC issued a revised “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions

under Title VII of the Civil Rights Act of 1964.” The Guidance is effective immediately.

The new Guidance provides examples of an applicant’s or employee’s proper or improper disqualification, based on his or her criminal record. A common practice among some employers is to develop an internal policy regarding the types of convictions that will disqualify an individual from employment. The Guidance contemplates that an employer may satisfy its Title VII obligations by using an internal policy if it is “narrowly tailored.” The Guidance explains “narrowly tailored” as a “demonstrably tight nexus to the position in question. Title VII thus does not necessarily require individualized assessment in all circumstances.”

The Guidance clearly prefers that a targeted screen be accompanied by notice to the individual under scrutiny — and an individualized assessment of the individual and the crime and the position in question. An individualized assessment would allow the applicant or employee to explain the circumstances of the conviction and why the conviction should not exclude him or her from employment. The Guidance lists eight possible topics of consideration in an individualized assessment, including these three:

The Guidance observes that persons who do not actually apply for employment may have a cause of action against an employer if the potential applicant is “discouraged from applying” because an employer has a reputation in the community for excluding individuals with criminal records.


Perhaps the greatest concern raised by the Guidance is the Commission’s refusal to allow employers to establish business necessity based on compliance with state or local laws prohibiting the employment of persons with certain criminal convictions. According to the Guidance, an employer who takes adverse action required by state law or local regulations nonetheless must demonstrate that its policy is job-related and consistent with business necessity.

The Guidance observes that persons, who do not actually apply for employment, may have a cause of action against an employer — if the potential applicant is “discouraged from applying” because an employer has a reputation in the community for excluding individuals with criminal records.

As a “best practice,” the Guidance encourages employers not to ask applicants about their criminal records. According to the EEOC, not asking about criminal records early in the application process is important, because an employer is more likely to assess the relevance of an applicant’s criminal records objectively when it already knows about the applicant’s qualifications and experience.

Training your managers, hiring officials and decision makers on Title VII and the nondiscriminatory manner of considering criminal records is another best practice encouraged by the Guidance.

• The facts and circumstances surrounding the offense or conduct;

• Evidence that the individual performed the same type of work, post-conviction, with the same or a different employer, with no known incidents of criminal conduct; and

• Employment or character references and other information regarding the individual’s fitness for the particular position.

The Guidance states that if the individual does not respond to the employer’s inquiries, the employer may make its decision without the information.

Individuals are “presumed innocent unless proven guilty;” thus, the Guidance says, the “arrest record standing alone may not be used to deny an employment opportunity.” However, the Guidance allows an employer to make an employment decision based on the conduct underlying the arrest, if the individual would be unfit for the position because of the conduct. As illustration, the Guidance uses the situation in which an elementary school assistant principal is arrested after several young girls reported the assistant principal of inappropriate touching. School policy permits terminating employees who engage in conduct that impact the health and safety of students. The assistant principal denies committing inappropriate conduct, but the school finds the denial not credible. The school terminates his employment. In this situation, the EEOC would find no violation of Title VII, because the school’s policy is linked to conduct relevant to the job and the decision is based on the underlying conduct.

The Guidance notes that federal laws and regulations prohibit the employment of persons with records of certain crimes in particular positions, e.g., child-care workers in federal agencies, bank employees and port workers. It finds that Title VII does not preempt these federally imposed restrictions. Moreover, although applicable regulations may allow an employer to obtain a waiver from these restrictions, “Title VII does not mandate that an employer seek such waivers,” the Guidance states.


The Guidance reminds employers that the inconsistent application of their policies on criminal convictions may result in accusations of disparate treatment discrimination. The Guidance addresses disparate impact on African-Americans and Hispanics, but does not address disparate impact based on sex.

EEOC TAkIng A CLOSE LOOk AT EmPLOyER WELLnESS PROgRAmS

The EEOC has heard testimony from a panel consisting of representatives of the business community, advocacy groups and providers on the treatment of employer-sponsored wellness programs under federal equal employment opportunity laws. According to the EEOC’s press release, issued after the May 8, 2013 meeting, “Wellness programs are an increasingly common feature of employee benefits programs.” Yet unanswered questions on the interplay of federal antidiscrimination laws enforced by the EEOC and other laws impacting wellness programs can make employer compliance a complex undertaking. The EEOC’s meeting appears to indicate the Commission will carefully examine rules governing wellness programs.

One key take-away from the meeting is that wellness programs (which face significant resistance from a number of advocacy groups) could be challenged under a number of federal statutes, as the law is complex and evolving. The Americans with Disabilities Act (ADA), the Genetic Information Nondiscrimination Act of 2008 (GINA), Title VII of the Civil Rights Act of 1964 (Title VII), the Age Discrimination in Employment Act (ADEA), the Equal Pay Act (EPA), Health Insurance

Portability and Accountability Act (HIPAA), the Affordable Care Act (ACA), and Sections 503 and 504 of the Rehabilitation Act were highlighted at the meeting. Some meeting participants criticized both private and public employers for having wellness programs that could violate these laws.

The ADA, for example, prohibits medical inquiries unless they are “voluntary” and “part of an employee health program available to employees at that work site…” According to the EEOC’s 2000 Enforcement Guidance on Disability-Related Inquiries and Medical Examinations of Employees Under the Americans with Disabilities Act (ADA), “A wellness program is ‘voluntary’ as long as an employer neither requires participation nor penalizes employees who do not participate.” In an informal letter issued in 2013, the EEOC added that it “has not taken a position on whether and to what extent a reward amounts to a requirement to participate, or whether withholding of the award from nonparticipants constitutes a penalty, thus rendering the program involuntary.”

Shortly after the EEOC’s May 8 meeting, the U.S. Departments of Health and Human Services (HSS), Labor and the Treasury issued final regulations on the treatment of wellness programs under the Affordable Care Act (ACA). While the new regulations raise the maximum permissible reward that may be offered in connection with certain wellness programs, they make clear that outcome-based financial incentives must be widely available to program participants. All employers who have incorporated outcome-based wellness programs as part of their group health plan should review the new regulations carefully to ensure their programs are in compliance before the regulations take effect.

The Office of Federal Contract Compliance Programs (OFCCP) administers the federal affirmative action requirements for government contractors pursuant to Executive Order 11246. The requirements for written affirmative action plans apply to contractors or subcontractors with annual federal contracts totaling $50,000 or more and at least 50 employees. These contractors and subcontractors must create and implement affirmative action plans annually.

According to OFCCP Director Patricia Shiu, the march toward equality has been a long and arduous one, spanning over 150 years in the United States. And while substantive steps have been made, particularly over the last 50 years, there is still more work to do and the nation must keep moving.

“We are committed to enforcing our laws to keep the doors of opportunity open for all workers — even if we have to pry those doors open from time to time,” said Director Shiu. “We believe businesses that play by the rules shouldn’t have to compete at a disadvantage against those who don’t.”

In FY 2012, OFCCP conducted compliance evaluations at a little more than 4,000 contractor establishments, resolved 139 cases of employment bias, recovered more than $11 million in financial remedies for “victims of discrimination,” and

negotiated approximately 3,500 potential job offers for qualified rejected applicants.

FInAL RuLES RELEASED TO ImPROVE EmPLOymEnT OF VETERAnS, PEOPLE WITH DISAbILITIES

The Office of Federal Contract Compliance Programs (OFCCP) recently announced two final rules to improve the hiring and employment of veterans and people with disabilities. The regulations will have significant implications for federal contractors and subcontractors. Expected impacts include increased record-keeping obligations and changes to applicant-tracking and human resource information systems.

One rule updates requirements under the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA). The other updates those under Section 503 of the Rehabilitation Act of 1973. For more than 40 years these laws have required federal contractors and subcontractors to affirmatively recruit, hire, train and promote qualified veterans and people with disabilities respectively.

“In a competitive job market, employers need access to the best possible employees,” said Secretary of Labor Thomas E. Perez. “These rules make it easier for employers to tap into a large, diverse pool of qualified candidates.” Added Patricia A. Shiu, Director of the labor department’s Office of Federal Contract Compliance Programs (which is tasked to enforce both laws), “Strengthening these regulations is an important step toward reducing barriers to real opportunities for veterans and individuals with disabilities.”

The VEVRAA rule provides contractors with a quantifiable metric to measure their success in recruiting and employing veterans. It requires contractors to annually adopt a “benchmark” based either on the national percentage of veterans in the workforce (currently 8 percent),

Federal Contractors


“We are committed to enforcing our laws to keep the doors of opportunity open for all workers — even if we have to pry those doors open from time to time.”

— OFCCP Director Patricia Shiu


or their own benchmark, based on the best available data. The rule strengthens accountability and record-keeping requirements, enabling contractors to assess the effectiveness of their recruitment efforts. To facilitate compliance, it also clarifies job listing and subcontract requirements.

The Section 503 rule introduces a hiring goal for federal contractors and subcontractors - that 7 percent of each job group in their workforce be qualified individuals with disabilities. The rule also details specific actions contractors must take in the areas of recruitment, training, record keeping and policy dissemination — similar to those that have long been required to promote workplace equality for women and minorities.

JAnuARy 1, 2014 IS THE DATE FOR REquIRED uSE OF nEW CEnSuS DATA

OFCCP has identified January 1, 2014, as the date federal contractors will be required to start using the most recently released EEO tabulation data in development of their affirmative action plans. In other words, all affirmative action plans updated in 2013 can be done so using the existing 2000 EEO file.

Late last year, the Census Bureau released its new equal employment opportunity tabulations breaking down the U.S. labor force by sex, race, and ethnicity, in searchable form by geographic location and occupation. In addition to other purposes, these tables serve as the source of

“availability” data for affirmative action plan utilization analyses and will replace the current tabulations in use by federal contractors since 2005. Though it has been several months since the data was released for use by the public, OFCCP delayed setting a deadline for contractor use until it could survey employers on the practicality of implementing the new information.

The Bureau announced that utilizing the ACS data allows for a more-detailed picture of the labor force and even allows for insight into unemployment and citizenship status.

Contractors have until the end of 2013 to update their data files with this new tabulation and begin assessing the impact of the new comparator population on the expected race and gender make-up of their workforce.

DIRECTIVE On uSE OF ARREST AnD COnVICTIOn RECORDS In COnTRACTOR’S EmPLOymEnT DECISIOnS

OFCCP will be carefully reviewing employer consideration of candidate criminal history information for systemic discrimination. OFCCP’s Directive 306, “Complying with Nondiscrimination Provisions: Criminal Record Restrictions and Discrimination Based on Race and National Origin,” issued on January 29, 2013, and effective immediately, applies to all covered federal contractors and subcontractors.

In the Directive, OFCCP adopts the Equal Employment Opportunity Commission’s 2012

OFCCP urges an “individualized assessment” that is “narrowly tailored to the essential job requirements and actual circumstances under which the jobs are performed.”


“Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964,” which requires employers to conduct an individualized assessment of the job-relatedness of a conviction to the job to which the candidate applied. OFCCP also adopted EEOC’s guidance that, where disparate impact occurs, employers must validate their criminal background check policies.

In support of the Directive, OFCCP cites numerous statistics reflecting that minorities are disproportionately disqualified by criminal background checks. For example, OFCCP indicates African-Americans make up about 13 percent of the country’s population, but constitute 40 percent of the currently incarcerated population. The Directive also reports that 1 in 15 African-American men and 1 in 36 Hispanic men, as compared to 1 in 106 White men, are incarcerated during their lifetime.

To avoid unnecessary exposure, OFCCP recommends contractors adhere to EEOC’s recommended “best practice” of refraining from inquiring about criminal history on job applications. Where such information is requested, OFCCP urges an “individualized assessment” that is “narrowly tailored to the essential job requirements and actual circumstances under which the jobs are performed.” Such consideration should include (1) the nature or gravity of the offense or conduct; (2) the time elapsed since the offense, conviction, and/or completion of the sentence; and (3) the nature of the job sought or held.

2014 buDgET JuSTIFICATIOn DOCumEnT gIVES InSIgHT InTO AgEnCy’S PRIORITIES

OFCCP has issued its Budget Justification Document for fiscal year 2014. As part of this document, OFCCP shared the details of how it will define a “systemic discrimination” case. Specifically, OFCCP defines systemic discrimination as a case meeting one of two: (a) the case addresses a measurable pattern

of discrimination (either based on findings from a regression analysis or based on any other aggregate statistical measure such as mean differences), or (b) the case addresses an identified practice applicable to multiple employees that results in pay discrimination (such as a practice of steering employees who are members of a protected class toward lower paying jobs at hire). There is no specific numeric threshold used to define a systemic case.

In its 2014 Budget Justification Document, the OFCCP also confirms its intent to implement an enterprise-wide investigative process (as opposed to focusing on individual establishments). OFCCP states that focusing on identifying issues across multiple facilities will ensure that corporate-wide changes in personnel practices are implemented, when necessary, throughout the contractor’s entire corporate structure, and not just within the facility that is the subject of the initial OFCCP investigation. With this admitted shift in focus, employers need to be mindful of their enterprise-wide practices (employment testing, compensation practices, use of criminal background checks) and the potential compliance pitfalls associated with these practices.

OFCCP RESCInDS COmPEnSATIOn STAnDARDS AnD WILL DEVELOP nEW CASE-by-CASE InVESTIgATIVE APPROACH

In an effort to provide the OFCCP and its compliance officers “more flexibility” in the review of employer pay practices, it has announced


that it has taken off the books the compensation standards by which it determines whether covered contractors have engaged in prohibited pay discrimination. The OFCCP noted on February 26, 2013, that it will officially rescind the 2006 Compensation Standards, effective February 28, 2013. This move has been long-awaited by the contractor community — OFCCP initially announced its intent to rescind these standards in January 2011. The agency simultaneously released Directive 307, which sets out the process for compensation reviews going forward. The Notice of Rescission and the supporting Directive are a “game changer” for the contractor community.

The 2006 Compensation Standards established the analytical framework for the agency when reviewing contractor compliance with pay equity requirements and prior to issuing a Notice of Violation. In her statement on the rescission, OFCCP Director, Pat Shiu, categorized the Standards as “arbitrary restrictions” that prevented the agency from “effectively protecting workers from illegal pay discrimination.” The Notice of Final Rescission states the Standards “do not favor aggregation” and “make it more difficult for OFCCP to test for larger patterns across groups of jobs.”

OFCCP stated it does not intend to replace the Standards with any formal rule. Instead, it will rely on “subregulatory materials,” such as compliance manuals, directives and training to inform contractors (and compliance officers) on processes governing pay investigations going forward. To that end, the Notice of Final Rescission sets forth the agency’s intended process for review of compensation during compliance evaluations scheduled on or after February 28, 2013. The OFCCP has already put into place a Directive that sets out the process for compensation reviews going forward.

OFCCP states its approach to investigating and enforcing nondiscrimination with respect to pay will “follow Title VII principles.” Based on this, it

commits to developing a “case-by-case” approach to investigating pay and sets forth “five principles” compliance officers will consider when reviewing contractor pay. These five factors are:

• Determining the most appropriate and effective approach from a range of investigative and analytical tools;

• Considering all employment practices that may lead to compensation discrimination;

• Developing appropriate pay analysis groups;

• Investigating large systemic, smaller unit and individual discrimination; and

• Reviewing and testing factors before including them in analysis.

Most notably, the OFCCP states that it will begin its analyses by testing large groups of employees that may be based on groups larger than job title and job groups. This means that OFCCP will “start big” and aggregate contractor data to analyze the largest groups of employees possible.

OFCCP says it believes the increased flexibility “does not necessarily lead to greater inconsistency” and has “committed to ensuring that it does not.” However, the agency reiterated extensively throughout the Notice of Rescission that, going forward, the OFCCP will take a “case-by-case” approach to its pay investigations.


SIgnS POInT TO COnTInuED FOCuS On PAy DISCRImInATIOn

On June 10, 2013, the Equal Pay Act turned 50. President Obama commemorated this historic anniversary with public remarks at the White House in which he urged continuing pay equality efforts. Occupying a place of prominence, and an act likely intended to highlight the agency’s efforts towards pay discrimination, OFCCP Director Shiu stood behind the President during the ceremony.

Additional events marking the day included The National Equal Pay Task Force’s issuance of a report, “Fifty Years After the Equal Pay Act: Assessing the Past, Taking Stock of the Future,” that links the OFCCP’s enforcement of EO 11246 to EPA progress. The 45-page Report references OFCCP more than 30 times, discusses at least five specific OFCCP settlements, and highlights the “strengthening collaboration” between the OFCCP and EEOC.

Director Shiu’s VIP status during President Obama’s remarks and the emphasis on OFCCP in the Task Force’s report are interesting, given the fact OFCCP does not enforce the EPA. The OFCCP also observed the EPA’s birthday with a blog post by OFCCP Senior Program Advisor Pamela Coukos, entitled, “50 Down, 50 to Go? Myth Busting the Pay Gap Revisited.” Ms. Coukos reinforces OFCCP’s belief that the pace of progress toward eliminating the wage gap is unsatisfactory and that the agency does not plan to “just sit back and wait five more decades” for it to close entirely.

Ms. Coukos’ remarks do not come as a surprise, given OFCCP’s recent rescission of the 2006 compensation guidelines and issuance of Directive 307 as well as the other events of the week that serve to further emphasize OFCCP’s continued aggressive search for pay discrimination.

OFCCP COnTInuES COmmITmEnT TO DEVELOPIng A CLOuD-bASED SySTEm

OFCCP is developing a cloud-based system that will allow agency offices across the country

to access the same information about federal contractors. In its 2014 Budget Justification Document, the OFCCP said it will implement a cloud-based system in FY 2014 — enabling the agency to improve process standardization, reporting functionality, and overall productivity of employees. OFCCP reports the new technology will allow the agency to realize savings, beginning in FY 2015 and 2016, in the amount of $39,000,000 over a period of 7 years. This initiative will also theoretically allow OFCCP to pursue enterprise-wide and system discrimination investigations, by facilitating coordinated compliance efforts, and identification of potential issues with company-wide policies and practices for contractors with multiple locations.

nO ExECuTIVE ORDER TO bAn LgbT DISCRImInATIOn by FEDERAL COnTRACTORS

Despite reports that the Obama Administration has considered expanding Executive Order 11246 — which currently covers race, color, sex, religion, and national origin — to include sexual orientation and gender identity, White House Press Secretary, Jay Carney, confirmed on July 10, 2013, that no such order is forthcoming and reiterated his earlier statements that the President prefers legislative, rather than executive, action on this front.

nEW PROCEDuRES FOR COnDuCTIng COmPLIAnCE EVALuATIOnS

Claiming that its previous Active Case Management (ACM) method for conducting compliance evaluations was only “of limited utility,” the OFCCP has rescinded ACM and instituted a new system. The new Active Case Enforcement (ACE) system is intended to allow the agency to “more effectively utilize its resources and strengthen its enforcement efforts” by:

• Lowering the thresholds for an “indicator” of discrimination, prompting in-depth review;

• Expanding the definition of what constitutes an indicator of discrimination;


• Planning to assess contractor compliance for the three years preceding an evaluation;

• Expanding enforcement tools available to the agency when conducting evaluations;

• Requiring compliance officers to conduct full desk audits in every review; and

• Requiring an on-site audit requirement in at least every 25th evaluation scheduled.

Under the old ACM, OFCCP focused on identifying cases of class-based discrimination that may have affected at least 10 individuals. Under ACE, however, OFCCP removes the affected-class-member threshold, saying indicators of discrimination may be of an individual or class nature. OFCCP defines “class” as “two or more victims.” The agency has much to choose from in finding an indicator of discrimination or violation. It may include statistical evidence, anecdotal evidence, patterns of individual discrimination, patterns of systemic discrimination, patterns of major technical violations, and indicators of non-compliance with non-EEO (equal employment opportunity) labor and employment laws enforced by other federal agencies (e.g., Department of Labor’s Wage and Hour Division, Occupational Safety and Health Administration, and Equal Employment Opportunity Commission).

All ACE compliance evaluations will begin with a full desk audit, regardless of the enforcement method used thereafter. A full desk audit is a comprehensive analysis of a contractor’s affirmative action plan (AAP) prepared pursuant to Executive Order 11246, Rehabilitation Act and the Vietnam-Era Veterans Readjustment Assistance Act and supporting documentation.

As with the old ACM, the ACE audit will include a full evaluation of a contractor’s selection decisions (i.e., hires, promotions, and terminations), compensation, and other more programmatic aspects of a contractor’s AAP (e.g., goal-setting and outreach efforts).

Following the full desk audit, OFCCP will consider initiating one of the following review methodologies:

• Compliance Review – A comprehensive review of all components of a contractor’s AAP. In addition to the desk audit, the review may include an on-site review and off-site analysis.

• Compliance Check – An abbreviated review of a contractor’s record-keeping practices to ensure compliance with affirmative action regulations. A compliance check may be followed by a more expansive evaluation, as appropriate.

• Focused Review – An on-site review that focuses on one or more components of a contractor’s employment organization or practices.

• Off-site Review of Records – As the name suggests, the review will involve OFCCP’s receipt and review of documentation, related to a contractor’s employment processes, to ensure compliance with affirmative action regulations.

On a positive note for contractors, OFCCP re-emphasizes that, if during the desk audit of a contractor’s AAP, the compliance officer identifies no violations or only minor technical violations, the compliance officer should seek to close the review at the desk-audit stage.

Under ACE, OFCCP will select every 25th compliance evaluation for an automatic full compliance review, regardless of whether any problematic employment processes are identified. A full compliance review will consist of all three stages of a compliance review — desk audit, on-site review, and off-site analysis, when necessary.


ConclusionChange continues at a rapid pace. With constant changes in policy and regulations by federal agencies, it is difficult to keep up with all of the new rules, determine how they affect you, and stay in compliance. ADP TotalSource® is well versed in regulatory developments and stays on top of new rules that may affect your business. ADP TotalSource updates clients about new developments of significance and offers clear action plans that can help its clients focus on their business objectives.

A part of ADP’s Employer Services Division, ADP TotalSource provides employers with a comprehensive human resource outsourcing solution that helps reduce the costs and complexities related to employment and HR management. For companies and HR departments that seek to return the focus to their core processes, ADP TotalSource removes administrative and regulatory burdens, allowing more effort to be expended on strategic initiatives. Our affordable outsourcing opportunities have the ability to significantly reduce operating costs and streamline business operations, paving the way for growth and competitive gains. To learn more about how ADP TotalSource can help your business call 1-800-HIRE-ADP (1-800-447-3237) or visit us online at www.adptotalsource.com.

Jackson Lewis is a strategic alliance partner with ADP TotalSource. For more than 50 years, Jackson Lewis has placed a high premium on preventive strategies and positive solutions in the practice of workplace law. With over 750 attorneys practicing in 53 offices nationwide, Jackson Lewis has a national perspective and sensitivity to the nuances of regional business environments. www.jacksonlewis.com.

About ADP TotalSource®

About Jackson Lewis


Notes

HR. Payroll. benefits.

This material is subject to change and is provided for informational purposes only and nothing contained herein should be taken as legal opinion, legal advice or a comprehensive compliance review.

The ADP logo, ADP, ADP TotalSource and In the Business of Your Success are registered trademarks of ADP, Inc. iPhone and iPad touch are trademarks of Apple Inc., registered in the U.S. and other countries. Android is a trademark of Google Inc. BlackBerry is a registered trademark of Research In Motion Limited (RIM). All other trademarks and service marks are the property of their respective owners.MKT192 0913 Printed in the USA Copyright © 2013 ADP, Inc.

Employment Legislation & Federal Compliance | ADP

Business

Transcript of Employment Legislation & Federal Compliance | ADP