Federal Contractors Quarterly Briefing: The Latest on OFCCP Rules, EEO-1 Pay Equity Reporting, Overtime and Minimum Wage, and More

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1 Federal Contractors Quarterly Briefing: The Latest on OFCCP Rules, EEO-1 Pay Equity Reporting, Overtime and Minimum Wage, and More Presented by: David S. Fortney H. Juanita Beecher Fortney & Scott, LLC Wednesday, January 25, :30 p.m. to 3:00 p.m. Eastern 12:30 p.m. to 2:00 p.m. Central 11:30 a.m. to 1:00 p.m. Mountain 10:30 a.m. to 12:00 p.m. Pacific or For On-Demand purchasing information, contact customer service at: or BLR and HR Hero Business & Legal Resources and HR Hero. All rights reserved. These materials may not be reproduced in part or in whole by any process without written permission. This program has been approved for 1.5 credit hours toward PHR and SPHR recertification through the Human Resource Certification Institute (HRCI). For more information about certification or recertification, please visit the HRCI website at Business & Legal Resources (BLR) is recognized by SHRM to offer Professional Development Credits (PDCs) for the SHRM-CP or SHRM-SCP. This program is valid for 1.5 PDCs for the SHRM-CP or SHRM-SCP. For more information about certification or recertification, please visit

2 Federal Contractors Quarterly Briefing: The Latest on OFCCP Rules, EEO-1 Pay Equity Reporting, Overtime and Minimum Wage, and More Presented by: David S. Fortney H. Juanita Beecher Fortney & Scott, LLC January 25, 2017 Agenda The Trump Administration Regulatory freeze Status of Obama Executive Orders under President Trump Hearing for Secretary of Labor Nominee Latest predictions for DOL, EEOC & NLRB Supreme Court to hear NLRB case Agencies still operating under Obama rules OFCCP has last gasp on pay EEOC issues details on FY2016 results States starting to fill the gap New York Executive Orders Movement to increase overtime state by state Fair pay and other state laws 2

3 Trump Administration Day 1 Trump Administration On Friday January 20 th, Trump Chief of Staff Reince Priebus issued memo to heads of Executive Dept. and Agencies: No new regulations until new head has reviewed and approved Regulations sent to OMB but not published to be withdrawn Published regulations not yet taken effect as far as permitted by applicable law to have their effective date postponed 60 days from date of memo Impact on blacklisting, overtime rules, EEO-1 unclear 4

4 Status of Obama Executive Orders EO EO Title Date of Number Issuance Economy in Government Contracting 1/30/2009 Date of Rescission Nondisplacement of Qualified Workers under 1/30/2009 Service Contracts Notification of Employee Rights under Federal 1/30/2009 Labor Laws Strengthening Protections Against Trafficking 9/25/2012 in Persons in Federal Contracts Establishing a Minimum Wage for Contractors 2/12/ Non-Retaliation for Disclosure of 4/8/2014 Compensation Information Amendment of EO (adding sexual 7/21/2014 orientation and gender identity) Fair Pay and Safe Workplaces 7/ 31/ Establishing Paid Sick Leave for Federal Contractors 9/10/ Labor Secretary Nominee Andrew Puzder, CEO of CKE Restaurants Hearing has been rescheduled twice Most recent date being discussed in February 2 Opposition is growing 6

5 DOL Predictions Key leadership appointments yet to be made: Deputy Secretary Solicitor of Labor Heads of key DOL Agencies: OFCCP Wage & Hour OSHA Pensions and Benefits and Employment Training 7 DOL Predictions (cont.) In addition to regulations covered by Executive Orders other regulations/directives to watch are: Overtime Rule Enjoined and on appeal Directive 307 ACE approach to audits Joint employment theory 8

6 EEOC Predictions Current composition is 1 Republicans and 3 Democrats New Chair and new appointment coming New General Counsel Rescind or revise key recent initiatives? EEO-1 Compensation Reporting EEOC Final Rules on Wellness Could depend on Obamacare Strategic Enforcement Plan changes 9 NLRB Predictions President-Elect Trump will fill two seats Once appointments done, Republicans will control the majority General Counsel Richard F. Griffin, Jr. s term expires November 4, 2017 Reverse course Ambush elections: Quickie election rule Joint-Employer: Browning-Ferris Ind. Of CA Class action waivers: D.R. Horton/Murphy Oil Expansion of Section 7 rights to non-union workplaces 10

7 Supreme Court to hear Murphy Oil Supreme Court agrees to consider whether arbitration agreements that prohibit employees from pursuing class or collective actions are unlawful under NLRA and unenforceable under the Federal Arbitration Act Board argues that barring class/collective actions unlawfully interfere with employees NLRA rights to engage in concerted activity for mutual aid and protection Board asks Court to reverse 5 th Circuit decision 2 nd and 8 th also rejected Board s position while 7 th and 9 th support Board 11 Agencies Still Operating under Obama Rules

8 OFCCP Agency appears to be going after tech/financial companies, filing complaints against Palantir alleging discrimination against Asian Americans Google alleging failure to provide access to compensation data JP Morgan Chase alleging systemic pay discrimination against women Oracle alleging systemic pay discrimination against women, African Americans, Asian Americans (in favor of South Asian Americans) and failure to provide proof of in-depth compensation review 13 OFCCP Agency appears to be going after tech/financial companies with recent settlements by: LexisNexis Risk Solutions agreed to pay $1.2M in back pay to resolve systemic pay discrimination against women HP agreed to pay $750K to resolve hiring discrimination claims Ameriprise Financial pay $128,200 in back wages to 20 black employees 14

9 EEOC EEOC announced its FY2016 results Charge filings and processing time up, backlog down. The EEOC received 91,503 charges of discrimination in FY 2016 Retaliation: 42,018 (45.9 percent of all charges filed) Race: 32,309 (35.3 percent) Disability: 28,073 (30.7 percent) Sex: 26,934 (29.4 percent) Age: 20,857 (22.8 percent) National Origin: 9,840 (10.8 percent) Religion: 3,825 (4.2 percent) Color: 3,102 (3.4 percent) Equal Pay Act: 1,075 (1.2 percent) Genetic Information Non-Discrimination Act: 238 (.3 percent) 15 EEOC EEOC announced its FY2016 results (cont.) Prelitigation resolution recoveries outflank litigation program. The EEOC obtained $482 million for victims of discrimination in FY 2016 EEOC resolved 97,443 charges EEOC resolved 1,650 charges and recovered $4.4 million for LGBT individuals EEOC resolved 139 lawsuits and filed 86 lawsuits alleging discrimination EEOC had 168 cases on its active docket, of which 48 (28.6 percent) were systemic discrimination and 32 (19 percent) are multiple-victim cases 16

10 EEOC Harassment Guidance EEOC released 75-page draft guidance on workplace harassment. The Commission describes its new guidance as "a companion piece" to the Report issued by EEOC Harassment Task Force Co-Chairs' Victoria Lipnic and Chai Feldblum this past June Hearing on Big Data On October 13, 2016, the agency convened a public meeting on the use of big data in the workplace and the implications for equal employment opportunity law 17 Wage and Hour Cintas Fire Protection Services will pay $1.3 million in unpaid wages and damages to 81 workers and an additional $44,500 in civil penalties to resolve claims it violated the FLSA Hersha Hospitality Management LP, Labor for Hire and related companies were considered to have jointly employed the workers supplied by Labor for Hire for the nine HHM-managed hotels and agreed to ensure future FLSA compliance including paying $275,000 in back wages and an equal amount in liquidated damages to more than 600 employees 18

11 Recommendations on OFCCP to Trump Transition Issues with OFCCP 1. OFCCP has ceased being an investigatory agency devoted to enabling compliance and has become a prosecutorial body dedicated to gotcha statistics. 2. OFCCP s change of its audit process in 2013 from Active Case Management ( ACM ) to Active Case Enforcement ( ACE ), effectuated the switch from investigation to prosecution. The important difference between ACE and ACM is that ACE essentially presumes that the contractor is in violation which it, in fact, seldom is. Because of this presumption, OFCCP invests tremendous time and effort in every audit, trying to uncover evidence of presumed violations, evidence that often is not there to be found. 3. To make unearthing violations involving compensation less difficult for the agency, OFCCP has replaced known, articulated standards for contractors with vague, ambiguous guidelines (Directive 307), so that no contractor can know the standard it should aim to achieve or the criteria by which it will be evaluated. 20

12 Issues with OFCCP (cont.) 4. The implementation of Directive 307, addressing investigations of contractor compensation practices, has resulted in OFCCP policies and practices that are ineffective, expensive, and do not result in Notices of Violation ( NOV ) that can survive legal scrutiny. 5. As a result of shifting the agency s focus to compensation disparities, OFCCP has been compelled to seek more complex and ambiguous data (such as that to be collected by the controversial expanded EEO-1 Report5) and base its enforcement on unstable statistical violations. 6. The narrow focus of OFCCP on isolated issues ignores the core mission of identifying systemic discrimination. 7. OFCCP personnel lack the training needed to effectively and fairly perform their jobs. 21 Recommendations for Change 1. Return to a focus on effective compliance evaluations by restoring the Active Case Management process 2. Rescind Directive 307 and re-implement the 2006 Compensation Standards and Self- Audit Guidelines or similar guidance based on controlling judicial decisions that includes safe harbor provisions 3. Have federal contractors certify in a summary format that they are in compliance and focus audits on contractors that do not certify their compliance 4. Rescind or revise the recent changes to the EEO-1 collection of compensation data 22

13 Recommendations for Change (cont.) 5. Focus on systemic discrimination rather than looking for isolated issues based solely on statistical significance 6. Increase OFCCP transparency during audits so that the goal is to arrive at the concrete evidence rather than embarking on fishing expeditions 7. Provide increased training to OFCCP personnel so that they become experts in the areas in which they are asked to perform 23 States Starting to Fill the Gap

14 New York Executive Orders New York Governor Andrew Cuomo signed two Executive Orders on January 9, 2017 Executive Order No. 162, Ensuring Pay Equity by State Contractors, requires that the contractor report the job titles and salaries for its entire workforce if the contractor cannot identity which employees are working directly on the state contract These reports must be made quarterly if the prime contract is in excess of $25,000 and monthly for prime construction contracts in excess of $100, New York Executive Orders Executive Order No. 161, Ensuring Pay Equity by State Employers, which forbids state entities from asking about a job applicant s compensation history However, once a conditional offer of employment has been extended with compensation a state entity may request and verify compensation If a state entity is already in possession of an applicant s prior compensation, it may not be relied upon in determining the applicant s salary, unless required by law or collective bargaining agreement While an applicant can volunteer their compensation information, the Executive Order provides that an applicant s refusal to provide their compensation information may not be considered in making a hiring decision 26

15 Push to Change State Overtime Laws Democrats in Rhode Island, Connecticut, Maryland, Wisconsin, Michigan plan to introduce bills like President Obama s overtime rule Currently 29 states and District of Columbia have minimum wage rate set higher than federal minimum wage 14 states have minimum wage requirements equal to federal minimum wage Five states have no minimum wage law 27 Fair Pay and Paid Leave Statutes California, Maryland, New York and Massachusetts all have passed various fair pay laws New Jersey legislature already working to pass another law to close pay gap Philadelphia just passed law barring employers from asking about salary history Five states and the District of Columbia have paid family/medical leave California, Hawaii, New Jersey, New York, Rhode Island and the District of Columbia Seven states, 29 cities, two counties and the District of Columbia have paid sick leave 28

16 Workplace solutions. Legal excellence. Fortney & Scott, LLC 1750 K Street, NW, Suite 325 Washington, DC Phone: / Fax: David S. Fortney Mr. Fortney is a co-founder of Fortney & Scott, LLC, a Washington, D.C.-based law firm counseling and advising clients on the full spectrum of work-place related matters, including employment discrimination and labor matters, compliance programs, government contracting, international dispute resolution and counseling matters, and developing strategies for avoiding or responding to workplace-related crises. Fortney & Scott, LLC has been recognized as a leading management employment law firm in the prestigious Best Law Firms survey for by U.S. News & World Report and Best Lawyers for Washington, D.C. Mr. Fortney has a broad-based practice representing and counseling employers and executives in employment and labor matters, including equal employment opportunity requirements, wage and hour matters, federal contractor's affirmative action and non-discrimination obligations, collective bargaining, workplace health and safety, and pension and welfare benefits. He brings experience from the public and private sectors in advising clients on these issues, and he frequently represents clients before the U.S. Department of Labor's agencies, the Equal Employment Opportunity Commission, and the National Labor Relations Board. Mr. Fortney's litigation experience includes obtaining defense verdicts for employers in extended jury trials, as well as designing and implementing Alternative Dispute Resolution procedures to help resolve employment claims in an efficient and fair manner. Mr. Fortney has been widely recognized for his professional accomplishments, including being named one of the leading employment lawyers in Washington, D.C. by the Chambers USA survey of America s Leading Lawyers for Business in all years from 2005 through present. He was selected for inclusion in the 2009 through present editions of The Best Lawyers in America, Washington D.C. s, Washington D.C. s Best Lawyers and Super Lawyers. Mr. Fortney was also awarded an AV rating (the highest level) by Martindale-Hubbell. Before co-founding the firm, Mr. Fortney previously served as the chief legal officer of the U.S. Department of Labor in Washington, D.C. during the term of President George H.W. Bush. As Acting Solicitor of Labor, he was responsible for enforcing over 140 laws regulating the nation s workplaces and managing an agency with 800 attorneys and support staff. He advised Secretaries of Labor Elizabeth Dole and Lynn Martin and the Department of Labor agencies on a broad range of legal, policy, legislative, regulatory and enforcement issues. The major Department of Labor agencies Mr. Fortney represented included the Wage and Hour Division, Office of Federal Contract Compliance Programs, Employee Benefits Security Administration, Occupational Safety and Health Administration, and Mine Safety and Health Administration. 30

17 H. Juanita Nita Beecher Nita Beecher is a nationally recognized expert on OFCCP and EEOC. She is Of Counsel to Fortney & Scott, LLC with a focus on OFCCP regulatory affairs. Ms. Beecher s primary focus is labor and employment law with substantial experience with class investigations by the EEOC and OFCCP. She has more than 30 years of experience in labor and employment law particularly with class investigations by the U.S. Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance Programs (OFCCP). From 2000 to 2015, she led networks of senior diversity, EEO and affirmative action corporate practitioners as well as senior in-house labor and employment lawyers. Ms. Beecher served as an in-house counsel in major corporations for more than 20 years where she advised in-house clients on labor and employment law issues including, among other matters, OFCCP Glass Ceiling audits, EEOC class age investigations, implementation of the ADA, and FLSA Wage and Hour audits, and developed a self-audit tool for McDonnell Douglas Corporation and The Boeing Company. Ms. Beecher also worked as in-house counsel for E. I. dupont de Nemours & Co., Consolidation Coal Company and Arch Coal Company. In 2011 Ms. Beecher was selected by the National Research Council of the National Academies to participate in the Expert Study on Measuring and Collecting Pay Information from U.S. Employers by Gender, Race, and National Origin. Requested by the EEOC, the report by the panel was issued in Ms. Beecher has been a regular speaker at the ILG National Conference since 2004 and she moderated the opening panel for the 2015 conference in New York City. 31 Disclaimers *This webinar is designed to provide accurate and authoritative information about the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. *This webinar provides general information only and does not constitute legal advice. No attorney-client relationship has been created. If legal advice or other expert assistance is required, the services of a competent professional should be sought. We recommend that you consult with qualified local counsel familiar with your specific situation before taking any action.

18 David S. Fortney David S. Fortney is a co-founder of Fortney & Scott, LLC, a Washington, D.C.-based law firm that focuses on workplace related matters. Mr. Fortney s OFCCP practice includes representing and counseling federal contractors on complying with contractors nondiscrimination and affirmative action obligations enforced by OFCCP. Mr. Fortney is also a co-founder of The OFCCP Institute, a Washington, DC-based nonprofit employer association (not affiliated with the U.S. Department of Labor s OFCCP) that serves to educate federal contractors. Mr. Fortney has testified before Congress and the EEOC addressing federal contractors interests, and he frequently lectures and writes on OFCCP matters. H. Juanita Beecher H. Juanita (Nita) Beecher is a nationally recognized expert on Office of Federal Contract Compliance Programs (OFCCP) and U.S. Equal Employment Opportunity Commission (EEOC) matters. She is Counsel to Fortney & Scott, LLC with a focus on OFCCP regulatory affairs. Ms. Beecher's primary focus is labor and employment law with substantial experience with class investigations by the EEOC and OFCCP. She has more than 30 years of experience in labor and employment law particularly with class investigations by the OFCCP and the EEOC. From 2000 to 2015, she led networks of senior diversity, EEO and affirmative action corporate practitioners as well as senior in-house labor and employment lawyers.