OFCCP Releases Notice of Proposed Rulemaking (NPRM) Revising Sex Discrimination Guidelines

OFCCP NEWSThe OFCCP announced the publication of an NPRM on January 28th, 2015, aimed at revising and replacing its current Sex Discrimination Guidelines. These revisions will rescind procedures that have remained unchanged for over four decades to reflect a more accurate portrayal of current day organizational profiles. This NPRM updates guidelines on a wide variety of issues ranging from compensation discrimination to gender identity and family care giving discrimination.

What are the key pieces of this NPRM that will affect the Federal Contracting Community?

The items listed below were highlighted in the NPRM’s Factsheet. Additional information on this NPRM can be viewed through the provided link: http://www.dol.gov/ofccp/SDNPRM/index.html.

  • Clarify that adverse treatment of an employee because of gender-stereotype assumptions relating to family caretaking responsibilities is discrimination.
  • Clarify that leave for childcare must be available to men on the same basis that it is available to women.
  • Confirm that contractors must provide a variety of 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 contractors provide to other workers similar in their ability or inability to work, such as employees with disabilities or occupational injuries.
  • Clarify that unlawful compensation discrimination can result from job segregation or classification on the basis of gender, not just unequal pay for equal work.
  • Confirm that contractors must provide equal benefits and equal contributions for male and female employees participating in fringe-benefit plans.
  • Address both quid pro quo and hostile-environment sexual harassment, and identify as a best practice that contractors develop and implement procedures to ensure an environment in which all employees feel safe and welcomed, are treated fairly, and are not harassed because of sex.
  • Clarify that adverse treatment of employees because they do not conform to gender norms and expectations about their appearance, attire, or behavior, is unlawful sex discrimination.
  • Clarify that discrimination against an individual because of her or his gender identity is unlawful sex discrimination.
  • 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.

This NPRM is scheduled to be published in the Federal Registrar on January 30th, 2015; public comment period will close on 3/31/2015.

OFCCP Proposes Rule for Equal Pay Reports (Updated)

Update October 31, 2015: Comment Period Extended 60 Days

The DOL announced that it has extended the Equal Pay Report comment period through Jan. 5, 2015.

Notice of Proposed Rulemaking (NPRM)

2014 continues to be a year of action and change for the OFCCP as it announced on Wednesday, August 6th, a NPRM aimed at collecting compensation data that will be, as claimed, a “critical tool” in combating pay discrimination. This NPRM will amend the regulations to require federal contractors and subcontractors to submit an annual Equal Pay Report (EPR) on employee compensation to the Office of Federal Contract Compliance Programs (OFCCP).

OFCCP News and Updates

OFCCP NPRM for Equal Pay Reports

Who is affected?

The proposed regulations will only apply to federal contractors and first tier-subcontractors with 100 employees or more and hold federal contracts or subcontracts worth $50,000 or more for at least 30 days, hence, providing a reprieve to smaller contractors/sub-contractors.

What is the new Equal Pay Report (EPR)?

It is the Employer Information Report (EEO-1 Report) augmented with compensation information. Here are some details:

  • The proposed reporting period for the EPR is January 1 thru March 31 each year using the previous year’s earnings.
  • Employers would be required to submit two (2) additional pieces of employee information:
    1. A summary of W-2 wages for all workers in each EEO job category broken down by race, ethnicity, and sex.
    2. The number of hours worked by all employees in each EEO job category, broken down by race, ethnicity, and sex.

Intent of NPRM

The federal contracting and subcontracting community has been waiting patiently since April 8th, 2014, when President Obama tasked U.S. secretary of labor, Thomas E. Perez, with 120 days to propose a way of collecting compensation data. The intent of this NPRM is to maximize the efficiency and effectiveness of OFCCP’s enforcement programs, minimize the burden placed on federal contractors, and use data to encourage greater voluntary compliance with the law.

What does this new NPRM mean for federal contractors and subcontractors?

  • It appears that the Equal Employment Opportunity Commission and OFCCP are building a stronger relationship and connection regarding annual EEO and Affirmative Action reporting for federal contractors and subcontractors.
  • It is a known fact that one of the bases for an OFCCP’s compliance review is the EEO-1 reports. Would the introduction of the EPR, in conjunction with the EEO-1 reports increase audit and legal exposure for contractors?  In other words will contractors be audited based on EITHER the composition of their workforce and/or the compensation data?
  • Due to differing reporting periods for the EEO-1 reports (September) and the EPR (Jan to March), contractors would now be required to pull data, for reporting purposes, more than once a year.
  • In practice, to prepare an EPR, contractors will need to add W-2 wage information onto EEO-1 reports.  The ease and accessibility of summary W-2 wage information will be a major determinant of this burden.

Submit Your Comments on the Proposed Rule

The proposed rule will be published in the Federal Register on August 8th, 2014, and the OFCCP must receive all comments by January 5, 2015.* It’s important to voice your opinion! This NPRM may unsettle most of the federal contracting and subcontracting community as they may now be forced to submit more sensitive information to the government. Recalling the outburst of Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act of 1973, as amended, the DOL/OFCCP subsequently removed several proposed items because of the comments they received by federal contractors and subcontractors. The proposed rule can be found and commented on here: http://www.dol.gov/ofccp/EPR

*Note: On October 31, the OFCCP extended the comment period 60 days from November 6th, 2014 to January 5, 2015.

OFCCP Publishes NPRM for Pay Transparency

OFCCP News and Updates

OFCCP NPRM on Pay Transparency

The Proposed Regulations:

On September 15th, 2014, the OFCCP announced another NPRM aimed at broadening the rights of applicants and employees regarding compensation practices.  The proposed rule would prohibit federal contractors and subcontractors from firing or singling out employees and applicants that choose to discuss, disclose, or inquire about their pay or that of another employee or applicant.

A common, yet rarely discussed, practice in many organizations is the use of pay secrecy policies.  These policies take aim at controlling what can and cannot be discussed between individuals when it comes to the sensitive topic of compensation.  A strong point can be made that these policies help reduce potential conflict in the workplace and keeps individuals from feeling undervalued.  However, arguments can be made for the opposition of these policies as well.  As the Director of the OFCCP, Patricia A. Shiu, pointed out, “Workers cannot solve a problem unless they are able to identify it.  And they cannot identify it if they aren’t free to talk about it without fear of reprisal.”

What Does it Mean to Employers?

The ultimate intent of the NPRM is to encourage pay transparencies in an organization. Advocates for the NPRM almost always cite the case of Lilly Ledbetter. Lilly Ledbetter did not find out that she was getting paid less than the comparable men around her until 19 years after being employed at Goodyear. Even then, the pay disparity only came to light through an anonymous letter sent to her. If the NPRM becomes law, employees will have the freedom to discuss their pay without fear of any negative repercussions from their employers. Employers can, in turn, be “forced” to become more vigilant in ensuring fairness in pay and in placing more attention when reviewing their compensation practices/systems. There is, of course, also the possibility of opening up the door to a barrage of unwarranted and baseless pay inquiries and complaints which HR will now have to deal with.

Let Your Voice be Heard

This NPRM was published in the September 17th issue of the Federal Register and is currently in a 90 day window for public comment. Voice your opinion on the subject by using the link below.

To read or comment on this NPRM, please visit www.dol.gov/ofccp/PayTransparencyNPRM.

OFCCP’s New Equal Pay Report – a Memo to BCG Clients

To our clients:

As you know by now, the OFCCP has issued a Notice of Proposed Rulemaking (NPRM) for the new Equal Pay Report.[1]  We expect that there will be no shortage of blogs, webinars, and informational advice coming from every corner of the consulting and legal space.

Before the alarmists flood the internet and your spam folder with their concerns, we would like to reach out to you, our valued client, and reassure you that we are well ahead of this new Equal Pay Report requirement. As a Biddle Consulting Group (BCG) client, it will have little, if any, noticeable impact to you, for the following two reasons:

First, as the industry leader in Equal Employment Opportunity and Affirmative Action, we have the technology and expertise in place to generate these new reports and get you 100% compliant with the new Equal Pay Report. This is one of the many benefits of having the industry’s leading experts on your side.

Second, our compensation methodology is “OFCCP version-proof.”  What does this mean?  The OFCCP has been busy reinventing its compensation practice through the years.  In less than 10 years the OFCCP has:

  • introduced the 2006 Compensation Standards and Guidelines
  • introduced the 2/30/30/3-trigger
  • scrapped prior triggers and replaced with the 5/10/30/3-trigger
  • scrapped prior triggers and replaced with a generic 30/30/3-trigger
  • scrapped prior triggers and replaced with the $2K/2%-trigger
  • rescinded the 2006 Compensation Standards and Guidelines
  • introduced Directive 307 Compensation Guidelines

This is only a partial list, but the point is clear: the OFCCP has been very dynamic in their compensation enforcement.

Through it all, our compensation methodology has remained 100% compliant while remaining 100% the same. Our compensation methods are based on the Civil Rights Act of 1964, Title VII framework. Needless to say, the OFCCP (and the EEOC) must always answer to this framework. As such, our compensation methods can withstand any other methodologies that the OFCCP can come up with. This is what we mean when we say that our compensation methodology is “OFCCP version-proof.”

While our competitors have been struggling to keep their clients in compliance with every stroke of change coming from the OFCCP, we have easily weathered those changes. As our client, it is a promise we make and a promise we have delivered. In reading this, our hope is that you walk away knowing that, as a BCG client, we have you covered. Should you have any questions or concerns, please feel free to reach out to any of our consultants or Dan Kuang,  Ph.D., V.P. of Litigation and Audit Support Services (dkuang@biddle.com).

We are here to help!

[Download this memo]


Footnotes:

[1]
http://www.dol.gov/ofccp/epr.html
http://www.dol.gov/ofccp/EqualPay/EqualPayReport_NPRM_FactSheet_JRF_QA_508c.pdf http://www.ofr.gov/(S(tys2wfjptjgww4ugwkn2in12))/OFRUpload/OFRData/2014-18557_PI.pdf