EMPLOYMENT ISSUES FOR FEDERAL CONTRACTORS: 2017 AND BEYOND

Transcription

1 EMPLOYMENT ISSUES FOR FEDERAL CONTRACTORS: 2017 AND BEYOND THOMAS CUNNINGHAM Direct Number: (515) Facsimile: (515) Walnut, Suite 1600 Des Moines, IA Attorneys at Law Offices in Des Moines, Ames and Cedar Rapids THOMAS CUNNINGHAM is a shareholder in Nyemaster s Labor and Employment Department. Tom represents management of private and public sector employers, ranging from small and medium-sized businesses to publicly traded Fortune 500 companies in Iowa and throughout the Midwest. Tom has litigated discrimination and civil rights cases, and wrongful termination, FMLA, ADA, wage/hour, OSHA, and trade secret/non-competition cases in jury and non-jury trials in federal and state courts and before administrative agencies. Tom represents employers in the traditional labor law arena, having advised employers in union avoidance tactics and organizational campaign strategies. He has also defended employers confronted with unfair labor practice charges before the National Labor Relations Board. Tom has defended employers in audits conducted by the Department of Labor, EEOC, OFCCP, and Wage/Hour Division. He represents federal contractors and subcontractors with OFCCP/Executive Order and VEVRAA compliance issues. Tom also advises employers in affirmative action plan development.

2 OFCCP: OFFICE OF FEDERAL CONTRACTS COMPLIANCE PROGRAMS Construction and non-construction contracts ( service and supply contracts ) Contracts only not grants Medicaid is a grant Medicare Parts A & B are grants Flood insurance is a grant TriCare is....?

3 Executive Order is limited to contracts with Federal Executive Agencies Independent Executive Agencies not covered. What agencies are excluded? FDIC FCC Federal Reserve Bank SEC NLRB OFCCP COVERAGE

4 OFCCP S STATUTORY AND REGULATORY AUTHORITY Executive Order (1965), as amended; regulations at 41 C.F.R et seq. [race, color, religion, sex, national origin; effective January 1, 2015 sexual orientation and gender identity] Section 503 of the Rehabilitation Act of 1973, as amended; regulations at 41 C.F.R et seq. ( Section 503 )[persons with disabilities] Vietnam Era Veterans Readjustment Assistance Act of 1974, as amended, 38 U.S.C. 4212, regulations at 41 C.F.R et seq. ( VEVRAA or Section 4212 )[veterans and special disabled veterans]

5 WHO AND WHAT IS A SUBCONTRACTOR? An employer who does not contract directly with the Government, but has a contract with a contractor who does, either directly or through intermediary subcontractors The subcontractor s contract must be necessary to the performance of the covered federal contract or subcontract This system can result in coverage of various businesses through tiers of contractual relationships Mere contractual relationship does not confer covered subcontractor status

6 OFCCP COVERAGE THRESHOLDS Basic coverage nondiscrimination provisions in contracts 1. E.O Contract(s) equal to or greater than $10, Section 503 A contract equal to or greater than $15, VEVRAA A contract equal to or greater than $150,000 Affirmative action plan - 50 or more employees in the company and 1. E.O and 503 A contract equal to or greater than $50, VEVRAA A contract equal to or greater than $ 150,000

7 MINIMUM WAGE Executive Order mandated minimum wage for all employees working under covered contracts and subcontracts 1. January 1, $ per hour as to all new contracts 2. January 1, $10.15 per hour as to all existing contracts 3. January 1, $ per hour. Covered tipped employees: $6.80 per hour

8 PAY TRANSPARENCY RULES Executive Order effective January 11, 2016 Contractors prohibited from discriminating against or terminating employees for discussing their pay or the pay of their co-workers Applies to applicants for employment Conduct arguably already protected under National Labor Relations Act (NLRA), Equal Pay Act and ICRA

9 PAY TRANSPARENCY RULES

10 PAY TRANSPARENCY RULES

11 PAID SICK LEAVE Executive Order Effective January 1, 2017 new contracts and replacements of expiring contracts All employees who perform work in connection with a covered federal contract or subcontract 1. Excludes less than 20 hours per week in covered work 2. Exempt and non-exempt employees covered 7 days (56 hours) of paid sick leave annually, including to care for a family member and absences due to sexual assault, domestic violence and stalking

12 PAID SICK LEAVE CBAs ratified before September 30, 2016 if covers and provides same sick pay benefits, not applicable until CBA expires or 1/1/2020, whichever comes first CBAs that provide less than E.O employer must provide difference Existing PTO policies may fulfill requirements of E.O. if provides substantially same (or more) benefits under substantially similar conditions

13 PAID SICK LEAVE Sick leave accrued at rate of 1 hour for every 30 hours worked on or in connection with a covered contract Alternatively may provide bank of 56 hours at beginning of accrual year; must allow use in as small increments as 1 hour Requests for use may be made orally or in writing; Employer may require certification only for absences of 3 + full consecutive days; prior notice of documentation requirement May require use in connection with FMLA leave. May not use paid sick leave to fulfill SCA or DBA hours requirements

14 REVISED 2017 EEO-1 REPORT? Announced September 29, 2016; first use will be due March 31, Requires reporting of number of hours worked, summary of pay (grouped into pay bands established by EEOC), broken down by gender, ethnicity and race Very burdensome form: significant increase in work hours to collect information and complete the form. Make certain your system has the capability to generate the data the new report will require. Why? Collecting data to use in pursuing wage discrimination / Equal Pay Act litigation. Problem: Have no idea what pay to analyze.

15 REVISED 2017 EEO-1 REPORT?

16 REVISED 2017 EEO-1 REPORT? Most OFCCP compensation issues are steering cases: 1. Employer channels applicants or employees to lower or higher paying jobs based on protected characteristics, e.g., race or gender 2. Failing to inform applicants / employees of available jobs which meet their work expectations and interests. As employers work through the new form, should understand all forms of compensation and why simply looking at total pay to compare employees presents an inaccurate picture.

17 WRITTEN AFFIRMATIVE ACTION PLANS Required for employers who have 50 or more employees in the company and : 1. E.O and 503 A contract equal to or greater than $50, VEVRAA A contract equal to or greater than $ 150,000 Contracts are not aggregated Affirmative action plan for each establishment Within 120 days of entering into a covered contract or subcontract

18 WRITTEN AFFIRMATIVE ACTION PLANS Parent companies and subsidiaries: unique issues Non-federally involved subsidiary obligated to comply if parent is a covered federal contractor or subcontractor? Single entity test 1. De facto exercise of control 2. Unity of personnel policies from a common source 3. Dependency of operations

19 WRITTEN AFFIRMATIVE ACTION PLANS Construction AAP: Based on availability in relevant labor market already pre-defined Service and Supply AAP: Based generally on availability of minorities and women for the job groups for which it sources applicants Identify job groups and lines of progression Identify relevant labor market for each job group and availability analysis then disparity analyses and problem areas

20 WRITTEN AFFIRMATIVE ACTION PLANS Underutilization analysis: comparison of percentage of minorities and women in each job group with the calculated availability percentage. Any difference rule 80% rule Two standard deviation analysis Can become whack-a-mole

21 WRITTEN AFFIRMATIVE ACTION PLANS Establish placement goals to equal availability for job groups for which the placement goal must be set Analyze selection rates to determine source of underutilization Obligation is to apply good faith effort to make the AAP work Section 503: Good faith efforts are not good enough Measure availability v. employment. 7% versus your on-roll employment percentage for each job group

22 AND NOW WHAT?

23 New FLSA Overtime White Collar Overtime Rules enjoined by Texas federal judge since late November Obama Administration appealed to Fifth Circuit. 30 day delay on briefs while Trump Administration decides position. May do a Jerry Brown : just decline to defend new rules May do some revision to rules require new rule-making process

24 DOL BLACKLISTING RULE Executive Order 13673: Fair Pay and Safe Workplace Any company bidding on a federal contract worth more than $500,000 must report all employment law violations during the previous three years and then update their status every six months. Violations that must be disclosed include violations of E. O , the FLSA, FMLA, OSHA, Title VII, ADEA, ADA, the NLRA, Davis Bacon Act, Service Contract Act, and all state law equivalents. These violations include administrative merits determinations (e.g. probable cause findings), arbitral awards, citations, and civil judgments. Subject to FOIA requests: Plaintiff s counsel and union organizers

25 DOL BLACKLISTING RULE October: Federal court issues injunction until April 25, 2017 on behalf of Associated Builders and Contractors January 30, 2017: Joint Congressional Resolution to disapprove and block rule from taking effect. Likely to pass.

26 NEW SECRETARY OF LABOR PART 2 New nominee: Alexander Acosta, former NLRB member

27 TAKE-AWAYS President has vowed to get rid of job-killing regulations some will require new round of proposed rule-making or litigation For the first time in years, OFCCP will need to justify their existence to the new Administration: perhaps larger settlements, more aggressive in the short-term. Bottom line: they were the instrument via which Obama Administration implemented employment law changes they could not make generally applicable via Congressional action Uncertain year as regulations stay in force as is, are rewritten or rescinded More audits in the short term, with little consistency among District and Regional Offices

28 QUESTIONS?

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