Affirmative Action Update 2016

Presented for: Lorman Education

Services

James K. Cowan, Jr.540.443.2860 Direct

jcowan@cowanperry.com

Affirmative Action Regulations

Affirmative Action regulations are administered

by the Department of Labor’s Office of Federal

Contract Compliance Programs (“OFCCP”).

http://www.dol.gov/ofccp/aboutof.html

There is a wealth of information to be found on the

OFCCP’s home page, including sample narrative

affirmative action plans and related materials at:

www.dol.gov/ofccp/index.htm

Changes in 2015/2016

The RulesExecutive Order 11246, its Recent Amendments, and new Final Rules:

EO 13665, Prohibitions Against Pay Secrecy Policies and

Actions (amended EO 11246; final rule; effective

January 11, 2016)

EO 13672, Prohibiting Discrimination Based on Sexual

Orientation and Gender Identity (amended EO 11246; final

rule as of April 8, 2015)

EO 13658, Establishment of Minimum Wage for Federal

Contractors (final rule as of January 1, 2015; updated

January 1, 2016 & thereafter)

Vietnam Era Veterans Readjustment Assistance Act (VEVRAA)

(Section 4212)

Rehabilitation Act of 1973 (Section 503)

EO 13706, Establishing Paid Sick Leave for Federal Contractors;

Secretary of Labor to issue regulations by September 30, 2016;

goes into effect January 1, 2017

EO 13673, Fair Pay and Safe Workplaces Act (proposed

rule)

The Proposed (and Almost Proposed) Rules

Notice of Proposed Rulemaking for revised Construction

Contractors’ Affirmative Action Requirements (NPRM now

expected in May 2016)

Equal Pay Report (proposed rule, final rule expected May 2016)

Sex Discrimination Guidelines (proposed rule; final rule

was expected December 2015)

Additional Topics

“EEO is the Law” Poster Supplement

Browning-Ferris Industries of California NLRB

decision

EEO-1 Filing Rule Change

OFCCP Compensation Manager Interviews during

Pay Disparity Investigations

Executive Order 11246

Executive Order 11246 prohibits federal

government contractors and subcontractors from

discriminating in employment on the basis of

race, color, religion, national origin, sex, sexual

orientation, and gender identity, and requires

affirmative action with respect to minorities and

females to ensure nondiscrimination.

41 CFR § 60, et seq.

Executive Order 13672

An amendment to EO 11246, this rule prohibits

discrimination based on sexual orientation and/or gender

identity

Became effective on April 8, 2015 and applies to contracts

entered into on or after April 8, 2015

Amended language in all affirmative action clauses and

notices: race, color, religion, national origin, sex, sexual

orientation, and gender identity

FAQs: http://www.dol.gov/ofccp/LGBT/LGBT_FAQs.html

Complaints of discrimination under this new rule may

be investigated and enforced under both EO 11246 and

under Title VII

and Obergefell…

Obergefell, et al. v. Hodges, Director, Ohio

Department of Health, et al., 576 U.S. _____

(2015), which held:

The Fourteenth Amendment requires a State to

license a marriage between two people of the

same sex and to recognize a marriage

between two people of the same sex when

their marriage was lawfully licensed and

performed out-of-State.

Executive Order 13665

Prohibitions Against Pay Secrecy and Actions; this rule

amends EO 11246 and became effective on January 11, 2016

Prohibits federal contractors from discharging or discriminating

against employees or applicants for disclosure, inquiry, or

discussion about compensation with others

Prohibits adverse treatment for disclosure, inquiry or discussion

regarding compensation with other employees

Full text of Final Rule:

https://www.gpo.gov/fdsys/pkg/FR-2015-09-11/pdf/2015-22547.pdf

EO 13665 – EEO clause

Requires that the equal opportunity clause included in covered

federal contracts and subcontracts be amended to include that

federal contractors and subcontractors must refrain from

discharging, or otherwise discriminating against, employees or

applicants who inquire about, discuss, or disclose their

compensation or the compensation of other employees or

applicants.

A contractor’s federal contracts, subcontracts, or purchase

orders may incorporate 41 CFR 60–1.4, the equal opportunity clause provision of the regulations, by reference into their contracts and subcontracts.

EO 13665 – Pay Transparency Policy Statement

Contractors must incorporate the nondiscrimination provision into

their existing employee manuals or handbooks and disseminate the

nondiscrimination provision to employees and to job applicants,

verbatim, as follows:

PAY TRANSPARENCY POLICY STATEMENT

The contractor will not discharge or in any other manner

discriminate against employees or applicants because they

have inquired about, discussed, or disclosed their own pay or

the pay of another employee or applicant. However, employees

who have access to the compensation information of other

employees or applicants as a part of their essential job

functions cannot disclose the pay of other employees or

applicants to individuals who do not otherwise have access to

compensation information, unless the disclosure is (a) in

response to a formal complaint or charge, (b) in furtherance of

an investigation, proceeding, hearing, or action, including an

investigation conducted by the employer, or (c) consistent with

the contractor’s legal duty to furnish information.

EO 13665

Definition of Compensation

Requires that employers define key terms such as

compensation, compensation information, and

essential job functions as used in EO 11246, as

amended.

‘‘Compensation’’ … is defined for these purposes as

any payments made to, or on behalf of, an

employee or offered to an applicant as remuneration

for employment, including but not limited to salary,

wages, overtime pay, shift differentials, bonuses,

commissions, vacation and holiday pay, allowances,

insurance and other benefits, stock options and

awards, profit sharing, and retirement.

EO 13665

Definition of Compensation Information

‘‘Compensation information’’ is defined as the

amount and type of compensation provided to

employees or offered to applicants, including but not

limited to the desire of the contractor to attract and

retain a particular employee for the value they are

perceived to add to the contractor’s profit or

productivity; the availability of employees with like

skills in the marketplace; market research about the

worth of similar jobs in the relevant marketplace; job

analysis, descriptions, and evaluations; salary and

pay structures; salary surveys; labor union

agreements; and contractor decisions, statements,

and policies related to setting or altering employee

compensation.

EO 13665

Definition of Essential Job Function

‘‘Essential job function’’ is defined to provide

clarity about the positions covered by minimizing

the degree of subjectivity involved in the

determination. A job function may be considered

essential if: (1) The access to compensation

information is necessary in order to perform that

function or other routinely assigned business task;

or (2) the function or duties of the position include

protecting and maintaining the privacy of

employee personnel records, including

compensation information.

Executive Order 13658

On January 1, 2015, this rule established a new minimum wage for

federal contractors ($10.10/hour) to be increased by the Secretary of

Labor on January 1, 2016 and annual thereafter, as permitted by the

Executive Order.

Applies to new contracts and replacements for expiring contracts with

the Federal Government that result from solicitations issued on or

after January 1, 2015 or to contracts that are awarded outside the

solicitation process on or after January 1, 2015.

FAQs: http://www.dol.gov/whd/flsa/eo13658/faq.htm

Effective January 1, 2016, the minimum wage is $10.15/hour.

Also, beginning January 1, 2016, tipped employees performing

work on or in connection with covered contracts generally

must be paid a minimum cash wage of $5.85/hour.

Executive Order 13706 Establishes paid sick leave for federal contractors; goes into effect

January 1, 2017.

Contracts and subcontracts must specify, as conditions of payment

in the performance of the contract or subcontract:

• Employees shall not earn less than 1 hour of paid sick leave per

30 hours worked;

• Contractors shall not set a limit of less than 56 hours accrual of

sick leave per year;

• Paid sick leave shall carry over from one year to the next; and

shall be reinstated for employees rehired by a covered

contractor within 12 months after a job separation.

• Use cannot be made contingent upon employee finding a

replacement to cover missed work time

EO 13706 – Sick time use

(i) physical or mental illness, injury, or medical condition;

(ii) obtaining diagnosis, care, or preventive care from a health

care provider;

(iii) caring for a child, a parent, a spouse, a domestic partner, or

any other individual related by blood or affinity whose close

association with the employee is the equivalent of a family

relationship…

(iv) domestic violence, sexual assault, or stalking, if the time

absent from work is for the purposes otherwise described in

paragraphs (i) and (ii) of this subsection….

EO 13706 – Existing policies

Existing paid leave policy, in addition to the fulfillment of Service

Contract Act or Davis-Bacon Act obligations (if applicable) and

made available to all covered employees satisfies the

requirements of this order if

• the amount of paid leave is sufficient to meet the requirements

of this section and

• it may be used for the same purposes and under the same

conditions described herein.

The paid sick leave required is in addition to a contractor's

obligations under the SCA and the DBA. Contractors may not

receive credit toward their prevailing wage or fringe benefit

obligations … for any paid sick leave provided in satisfaction of the

requirements of this order.

EO 13706 – Requests for sick leave

Paid sick leave shall be provided upon the oral or written

request of an employee that includes the expected duration

of the leave, and is made at least 7 calendar days in

advance where the need for the leave is foreseeable, and in

other cases as soon as is practicable.

Certification issued by a health care provider may be

required for paid sick leave … for employee absences of 3

or more consecutive workdays, to be provided no later than

30 days from the first day of the leave.

As to certification of treatment for domestic violence,

sexual assault, or stalking, the contractor shall not disclose

any verification information and shall maintain

confidentiality about the domestic violence, sexual assault,

or stalking, unless the employee consents or when

disclosure is required by law.

EO 13706 – Certification

EO 13706 – Separation

Covered contractors are not required to make financial

payments to employees, upon separation from

employment, for accrued sick leave that has not been

used under this order, but unused sick leave accrued

under this order is subject to reinstatement (as

described earlier).

EO 13706 – Enforcement

A contractor may not interfere with or discriminate

against employees for taking, or attempting to take, paid

sick leave as provided for under EO 13706 or in

asserting, or assisting other employees in asserting any

right or claim related to the order.

The Secretary of Labor will investigate potential

violations of, and obtain compliance with, the terms of

this order.

Full text of EO 13706: https://www.whitehouse.gov/the-

press-office/2015/09/08/executive-order-establishing-

paid-sick-leave-federal-contractors

Sections 4212 (VEVRAA) and 503

(Rehabilitation Act of 1973)

VEVRAA (Section 4212) ReminderOn March 24, 2014, this section was amended to include:

Annual hiring (not incumbent) benchmark for protected veterans

(either equal to percentage of veterans in national civilian

workforce, which varies each year, or by calculated

individualized benchmarks)

Collection, documentation, and analysis of number of protected

veteran applicants and hires

Invitations to protected veterans to self-identify at pre- and post-offer

stages

Required specific language when incorporating the EEO

clause in a subcontract by reference

Job listing requirement to provide information in manner

and format permitted by state/local job services

VEVRAA Benchmark

As of April 21, 2015, the national percentage of

veterans in the civilian labor force (for purposes of

preparing 2015 AAPs) was 7%

When considering whether to customize your

benchmark, you should first examine the available

data. For example, the average percentage of veterans

in the civilian labor force for the prior 3 years (2012,

2013 and 2014) in Virginia was 11.4%; in Texas, the

average was 7.4%

Link to VEVRAA Benchmark Database, specifics and

sample data for the 5-factor test:

https://ofccp.dol-esa.gov/errd/VEVRAA.jsp

Veterans’

Infographic

In August 2015, the

OFCCP released “Am I a

Protected Veteran?” This

infographic helps

applicants and

employees determine if

they are eligible to self-

identify as protected

veterans.

Veterans’ InfographicThere is no posting requirement for the infographic, but posting

or providing it to applicants and employees may prove beneficial

to the contractor in meeting its hiring benchmark. It is available

for download here:

http://www.dol.gov/ofccp/posters/Infographics/ProtectedVet_Info

Graphic_JRFQA508c.pdf

The infographic clarifies that veterans who served on active duty

during World War II, the Korean conflict, the Vietnam era, or the

Persian Gulf War (which is defined as August 2, 1990 to the

present), and who were not dishonorably discharged, are

"active duty wartime" veterans under VEVRAA.

New FAQ’s were published by the OFCCP in December 2015

as to the information contained in the infographic:

http://www.dol.gov/ofccp/regs/compliance/faqs/VEVRAA_faq.ht

m

Section 503 Reminder

Effective March 24, 2014, this section was amended to require:

Contractors with more than 100 employees have a workforce goal of

7% utilization of persons with disabilities, by job group

Required collection, documentation, and analysis of the

number of disabled applicants and hires

Contractors with fewer than 100 employees have a workforce

goal of 7% utilization of persons with disabilities, workforce-

wide

Application process must be inclusive of applicants with

disabilities

The OFCCP has posted a 50-second video on its website, called “Disability Inclusion Starts

with You,” to share with employees and applicants who may be reluctant to self-identify, or

who may not understand the reasons for self-identification. It is available with and without

captioning here: http://www.dol.gov/ofccp/SelfIdVideo.html

Contractors may wish to download and post this video on their Intranet or company website to

share with employees and job applicants.

VEVRAA and Section 503

Annual Assessment and Audit

Don’t forget! Contractors must design and implement an audit

and reporting system to:

Determine the need for remedial action

Determine whether disabled individuals and protected veterans had

the opportunity to participate in the company's education, training,

recreational and social activities

Measure compliance with affirmative action plan obligations

Document actions taken to comply, and

If deficiencies are found, undertake necessary action to come into

compliance.

To Keep or Not to Keep:

Statistical Reports/Records

Selection and hiring records should be kept for three (3) years,

because federal contractors will now create auditing and reporting

systems under Sections 4212 and 503.

Any employment or personnel record kept by the contractor must be

retained for two (2) years after the record is made or the personnel

action is taken, whichever is later, but

Contractors must evaluate and document the effectiveness of

their recruiting of disabled individuals and protected veterans.

Documentation must include the criteria used to evaluate the

recruiting efforts and conclusions as to the success of those

efforts. Contractors must maintain this data, and the report

created from that data, for three (3) years.

To Keep or Not to Keep:

Statistical Reports/Records

Annual Written Report Required: At the end of the annual

assessment, the contractor will create a written report that

becomes a part of the company's AAP. The report must include:

The criteria used to evaluate the effectiveness of each outreach

and recruitment effort used; and

Provide the contractor's conclusion on the effectiveness of

the program. The criteria in the report must include an

assessment of the annual hiring data for the current year

and the two previous years (this began March 24, 2014)

Equal Pay Report

This proposed rule would be an amendment to an

implementing regulation of EO 11246. The rule would require

electronic submission of an annual Equal Pay Report:

Total number of workers in a specific EEO-1 job category by

race, ethnicity and sex

Total W-2 wages defined as the total individual W-2 wages

for all workers in the job category by race, ethnicity and sex

Total hours worked, defined as the number of hours worked

by all employees in the job category by race, ethnicity and

sex

Equal Pay Report – Expected Use

Would not be used as the basis for a notice of compensation

violation, but

Is confidential to the maximum extent permitted under the FOIA

Full text of Proposed Rule published in the Federal Register:

https://www.federalregister.gov/articles/2014/08/08/2014-

18557/government-contractors-requirement-to-report-summary-data-

on-employee-compensation

Proposed annual reporting window: January 1 – March 31

OFCCP would use the information to prioritize a contractor for a

compliance evaluation

Sex Discrimination Guidelines

OFCCP proposed rule to amend EO 11246: http://www.dol.gov/ofccp/SDNPRM/

Leave for childcare must be made available to men on the same

terms as it is available to women

Contractors must provide workplace accommodations,

ranging from extra bathroom breaks to light-duty

assignments, to women affected by pregnancy, childbirth,

and related medical conditions comparable to the

accommodations that they provide to other workers similar

in their ability or inability to work, such as workers with

disabilities or occupational injuries.

Adverse treatment of an employee based upon gender-

stereotyped assumptions about family caretaking responsibilities

is discrimination

Sex Discrimination Guidelines, cont’d

Compensation discrimination can result from job segregation or

classification on the basis of gender, not just unequal pay for equal

work, and thus may violate EO 11246.

Adverse treatment of employees because they do not conform

to gender norms and expectations about appearance, attire,

and behavior is unlawful sex discrimination.

Discrimination based on an individual’s gender identity is

unlawful sex discrimination.

Proposed rule will change the “Sex Discrimination

Guidelines” to regulations about “Discrimination on the Basis

of Sex” to make clear that they have the force and effect of

law.

Executive Order 13673

Will require federal contractors, at the time of bid solicitation for

contracts of $500K+, to disclose certain labor violations during the past

three (3) years

Fair Pay and Safe Workplaces Order; this rule is not yet final

Will require subcontractors whose subcontracts are $500K+ to

make the same disclosures

Among other things, this EO will require the following:

Contractors must make certain disclosures at each pay period

to employees, including the number of hours worked, rate of

pay, deductions from pay, etc.

EO 13673, continued

Contractors must update their disclosures to the government

agency with which they have the contract every six months

during contract performance

Contracting agencies must consult with a Labor Compliance

Advisor and consider the disclosures made by the bidding

contractor before awarding the contract

Federal contractors with contracts over $1M may only enter into

pre-dispute arbitration agreements with employees under Title

VII, or for any tort arising from sexual harassment or assault, with

the agreement of the employee or contractor after the dispute

arises

Full text of Executive Order in the Federal Register:

http://www.gpo.gov/fdsys/pkg/FR-2014-08-05/pdf/2014-18561.pdf

Construction Contractors’ Affirmative Action Requirements

NPRM now expected May 2016

This Notice of Proposed Rulemaking (NPRM) would revise

41 CFR part 60-1 and 60-4 by removing outdated regulatory

provisions, proposing a new method for establishing

affirmative action goals. The proposed rule would adopt a

new framework for implementing affirmative action

requirements in the construction industry and proposes

standards for designating projects "mega construction

projects." There may be some additional costs to contractors

as a result of the increased scope of required actions. The

benefits would likely include increased diversity in

construction workplaces and increased opportunities for

women and minorities to obtain on-site construction jobs.

Additional Topics

“EEO Is the Law” Poster Supplement

The EEOC’s “EEO Is the Law” poster was last revised in November 2009 and

consists of two pages. You must also post the September 2015 supplement

(see image in next slide).

Link to November 2009 “EEO Is The Law” Poster:

http://www.dol.gov/ofccp/regs/compliance/posters/pdf/eeopost.pdf

Link to September 2015 Supplement:

http://www.dol.gov/ofccp/regs/compliance/posters/pdf/OFCCP_EEO_Suppleme

nt_Final_JRF_QA_508c.pdf

Link to the DOL’s Poster website, for these and foreign language versions:

http://www.dol.gov/ofccp/regs/compliance/posters/ofccpost.htm

Browning-Ferris Industries of California

NLRB Decision of August 27, 2015

“...Two or more entities are joint employers of a single workforce if (1) they are both employers within the meaning of the common law; and (2) they share or codetermine those matters governing the essential terms and conditions of employment. In evaluating whether an employer possesses sufficient control over employees to qualify as a joint employer, the Board will – among other factors -- consider whether an employer has exercised control over terms and conditions of employment indirectly through an intermediary, or whether it has reserved the authority to do so.”

EEO-1 Filing Rule Changes

Effective September 2015, if a company has multiple

establishments located at the same address, and those

establishments have the same NAICS code and the same

EIN, the establishments MUST be combined into only one

report.

Employers must provide the company’s EIN on the EEO-1

report.

EEO-1 Survey Link:

http://www.eeoc.gov/employers/eeo1survey/

Companies can now obtain and reset their EEO-1 filing

passwords. https://egov.eeoc.gov/eeo1/login_help.html

Compensation Manager Interviews

During OFCCP Audit

In the event of an audit, the OFCCP may review a

contractor’s compensation records to search for pay

disparity. During this investigation, the OFCCP may conduct

a compensation manager interview.

Federal contractors are required to analyze their

compensation policies annually. Compensation managers

should conduct pay analyses each year, familiarize

themselves with the results, and address any issues before

an audit takes place. When prepared by an expert

consultant, an analysis should be requested, maintained

and managed by your attorney as an attorney-client

privileged document. Otherwise, the OFCCP may be

entitled to obtain the analysis and any adverse information it

contains during the audit or compensation manager

interview. See Scott v. Chipotle Mexican Grill, S.D.N.Y. 1:12-

cv-08333.

Quiz – Pay Transparency

1. An Accounting Clerk learns, while preparing payroll

reports, that several female co-workers received smaller salary

increases than male employees with the same job duties. Can

the Accounting Clerk be rightfully disciplined for sharing that

information with his female co-workers?

2. If the Accounting Clerk shares information regarding his

own compensation with a fellow employee, could he be rightfully

disciplined by the Company?

3. If an Administrative Assistant finds a payroll report left

on an office copier by the Accounting Clerk, and discusses

compensation information she learns from that report with her co-

workers, could she be rightfully disciplined for sharing that

information?

Quiz – Paid Sick Leave

Once EO 13706 (paid sick leave) goes into effect for federal

contractors on January 1, 2017:

4. When an employee who separated from the covered

contractor is rehired six months later, what happens to the sick

leave she had not used before she terminated?

5. If a covered contractor has a policy providing 14 days per

year of paid time off, regardless of the reason for the absence, is

that sufficient to be in compliance with EO 13706?

6. How much paid sick leave can be carried over from one

year to the next?

Quiz – Random!

7. If 10% of your current workforce is composed of protected

veterans, what is your recruiting benchmark for protected veterans

in 2016?

8. If 5% of your workforce has self-identified as being

disabled, what is your recruiting goal for individuals with disabilities

in 2016?

9. Should you prepare your company’s compensation

analysis in-house?

250 South Main Street, Suite 226

Blacksburg, VA 24060

p: 540.443.2850

1328 3rd Street, S.W.

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p: 540.777.3450

www.cowanperry.com

Thank you for attending this

Affirmative Action Update 2016,

presented for: Lorman Education

Services