2/1/2016. An Overview of Current & Proposed OFCCP Requirements. About Constangy. What We Do. Presented by Cara Crotty, Esq.

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1 An Overview of Current & Proposed OFCCP Requirements Presented by Cara Crotty, Esq. About Constangy We have focused on employment and labor law exclusively since 1946 We currently have more than 160 attorneys in 16 states Included in National law Journal 350 (largest U.S. firms) Law360 Top 10 labor & employment law practices We recently added three new offices, 20+ attorneys, and a new named partner Bold, strategic growth We have a national footprint, but a small firm culture Our clients tell us there is also a soul to Constangy that is unique and refreshing, that s not found with other firms. What We Do Employment Litigation Wage and Hour Labor Relations e-law Employee Benefits and ERISA Business Immigration Workers Compensation Trade Secrets and Non-compete Agreements Affirmative Action and OFCCP Compliance Occupational Safety and Health Workplace Drug Testing Sign up for newsletters and bulletins at 1

2 National Presence Constangy offices Bar admissions Cara Crotty Partner in Columbia, SC office Co-Chair of Affirmative Action Practice Group Employment Litigation & Advice Selected for Best Lawyers in America AV Peer Review Rated by Martindale-Hubbell Today s Agenda Overview of Current Affirmative Action Requirements Executive Order Section 503 of the Rehabilitation Act Vietnam Era Veterans Readjustment Assistance Act EEO-1 & VETS-4212 Reporting Overview of Proposed Rules Fair Pay & Safe Workplaces Equal Pay Report EEOC s Proposed Changes to EEO-1 Report Paid Sick Leave Sex Discrimination 2

3 EO Clauses EO FAR , Equal Opportunity Section 503 FAR , Equal Opportunity for Workers with Disabilities VEVRAA FAR , Equal Opportunity for Veterans VETS-4212 FAR , Employment Reports on Veterans Section 503 EO Clause Cite 41 CFR (a) IN BOLD: This contractor and subcontractor shall abide by the requirements of 41 CFR (a). This regulation prohibits discrimination against qualified individuals on the basis of disability, and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified individuals with disabilities. VEVRAA EO Clause Cite 41 CFR (a) IN BOLD: This contractor and subcontractor shall abide by the requirements of 41 CFR (a). This regulation prohibits discrimination against qualified protected veterans, and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified protected veterans. 3

4 Executive Order levels of coverage $10,000 worth of contracts prohibited from discriminating on basis of race, color, sex, religion, sexual orientation, gender identity, or national origin. Must develop written AAP for each establishment if you have 50 employees AND Have a contract worth $50,000 or more OR Have government bills of lading which total or are expected to total $50,000 or more during 12-mo period OR Serve as a depository of government funds in any amount OR Issue and pay U.S. savings bonds. LGBT Executive Order Issued by President Obama on July 21, 2014 Amended EO Only applies to federal contractors Added sexual orientation and gender identity to non-discrimination and affirmative action provisions Females & Minorities AAP Determine AAP date, i.e., March 1st Narrative Analysis of Current Workforce Workforce Analysis Job Group Analysis Availability Analysis Comparison of Incumbents to Availability Progress Toward Prior Year Goals Analysis of Employment Activity for prior 12 months 4

5 Comparison of Incumbents to Availability Required to set goals for females and minorities where representation is less than reasonably expected based on availability Goals are flexible targets that may be achieved only by means of fair, non-discriminatory means. Goals are placement rates, not quotas. Goal Setting Example First Level Supervisor External Availability/Geographic Area Availability of Females = 24.9% Availability of Minorities = 38.8% 10% of Placements from Outside Internal Availability/Promotions from within Company Availability of Females =.69% Availability of Minorities = 66.4% 90% of Placements from Inside Goal Setting Example (cont.) Overall Availability Females = 3.1% Minorities = 63.7% Compare to Representation in job group Females = 0% Minorities = 38.1% Set goals where lower than one would reasonably expect (statistically) Minority goal of 64% for First Level Supervisors 5

6 What does it mean to have a Goal? Placement rate Not a quota; company still required to hire and promote most qualified individuals. If audited, OFCCP will judge the company solely by whether they have made good faith efforts to attract the targeted candidates, not whether goal was achieved. Analysis of Employment Activity (12 Months) Hires v. Applicants Promotions v. Incumbents (or Candidates Considered) Terminations v. Incumbents If selection rates are statistically significant, creates an inference of discrimination and must defend decisions and be able to show processes are jobrelated and consistent with business necessity This is where OFCCP makes $$! Pay particular attention to areas of adverse impact where the company also has a goal Recordkeeping issues are particularly important for this component of AAP Adverse Impact Example 80 Applicants 20 non-minorities 60 minorities 20 New Hires 10 non-minorities 10 minorities Selection Rates Non-minorities selected at rate of 50% (10/20) Minorities selected at rate of 17% (10/60) Statistical Analysis of Selection Rates 2.96 Standard Deviations Statistically Significant and creates inference of discrimination 6

7 Importance of Disposition Codes 100 Applicants 50 M 50 F 20 Hires 15 M 5 F IRA = SD 100 Applicants Unable to Contact 1 M 10 F Not interested 2 M 10 F Don t meet BQ 5 F 20 Hires/Selections Declined offer 5 F IRA =.68 SD Section 503 of the Rehabilitation Act of levels of coverage $10,000 worth of contracts prohibited from discriminating on basis of disability and must take affirmative measures to employ individuals with disability Must develop written AAP for each establishment if you have 50 employees AND a contract worth $50,000 Section 503 s National Utilization Goal 7% workforce utilization goal for individuals with a disability Measured by job group Unless total workforce 100 Failure to meet goal, alone, is not a violation and won t lead to sanctions OFCCP will periodically review and update the utilization goal as data becomes more refined 7

8 Vietnam Era Veterans Readjustment Assistance Act of 1974 (VEVRAA) One level of coverage A government contract worth $100,000 or more and 50 or more employees May not discriminate and must take affirmative action to employ Protected Veterans Must develop AAP VEVRAA s Annual Hiring Benchmark 7% (national percentage of veterans in civilian labor force), updated annually OR 5 factor approach, taking into account: average percentage of veterans in civilian labor force in the state(s) where contractor is located over past 3 years (published on OFCCP website) number of veterans, over past 4 quarters, who were participants in ESDS in state where contractor is located (published on OFCCP website) applicant and hiring ratio for previous year contractor s recent assessment of effectiveness of outreach and recruitment efforts any other factors (nature of job openings, location) Required Tagline for Job Ads Under EO 11246, must state in job ads that all qualified candidates will receive consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, or national origin. Two ways to satisfy under EO: Include this verbiage OR State that company is An Equal Opportunity Employer 8

9 Reconciling Tagline Requirements Section 503 & VEVRAA regs updated in 2014 Must state that all qualified applicants will receive consideration without regard to disability or protected veteran status OFCCP s FAQs Include disabled & vets Two ways to comply with all requirements List all protected categories from EO, Section 503 & VEVRAA OR State An Equal Opportunity Employer, including disabled and vets EEO-1 & VETS-4212 Reports Due annually every September 30 th EEO-1 Provides ethnicity, race, gender information by EEO category of all employees VETS-4212 (formerly VETS-100A) Provides number of protected veterans by EEO category of employees and new hires Future Requirements 9

10 Fair Pay & Safe Workplaces Proposed Rule & Guidance EO signed by President Obama July 31, 2014 FAR Council Proposed Rule issued May 2015 OFCCP proposed guidance issued May 2015 Final Rule & Guidance expected April 2016 Main Components of Fair Pay & Safe Workplaces (EO 13673) Report on violations of Labor Laws Paycheck transparency Prohibition on arbitration of some claims Applies contracts worth $1 million or more Pre-dispute agreements to arbitrate claims arising under Title VII or any tort related to sexual assault or harassment Reporting Labor Law Violations Applies to contracts worth more than $500,000 When bidding, must report labor law violations within prior three years, and then semi-annually thereafter Administrative merits determination Notices or findings issued by enforcement agency, even if subject to appeal or further review Arbitral award or decision Arbitrator determination that contractor violated any provision of labor laws or enjoined contractor from such violation; applies to private proceedings Civil judgment Any federal or state order determining that contractor violated labor laws or enjoining such violation, including preliminary injunctions and orders that are not final or subject to appeal Includes consent and default judgments 10

11 Applicable Employment Laws & Orders FLSA OSHA NLRA DBA SCA EO Section 503 VEVRAA FMLA Title VII ADA ADEA EO (Min Wage) Equivalent state laws Assessing Violations Whether serious, repeated, willful, or pervasive labor law violations demonstrate a lack of integrity or business ethics Performed on case-by-case basis in light of totality of circumstances, including efforts of remediation and agreements with enforcement agencies Subcontractor Reporting Applies to subcontracts valued at more than $500,000 and that are not for COTS items Contractors must require subs to report labor law violations during past 3 years Before award of subcontract Semi-annually thereafter Contractors must determine responsibility of sub and appropriateness of awarding contract Proposed rule gives contractors discretion in how to manage this process 11

12 Public Disclosure of Violations Basic Information about contractors labor law violations would be publicly available online Prepare for FP&SW Now Determine how violations will be tracked Determine who will be responsible for reporting Develop process for obtain information on violations from subcontractors Review arbitration agreements Equal Pay Report President issued directive in April 2014 that OFCCP develop a tool for compensation data collection OFCCP issued NPRM in August 2014, proposing Equal Pay Report Final Rule was expected May 2016 EEOC issued Proposed Rule Friday, January 29, 2016 OFCCP s proposal now dead 12

13 Proposed EEO-1 Report Same data as currently required Plus: W-2 earnings Hours worked By EEO-1 category, salary bands, race/ethnicity, and gender Potential Effective Date 2016 No change or more employees would respond to new section employees only respond to current portion 13

14 Prepare for New EEO-1 Report Now Conduct your own compensation analysis now Conduct analysis under attorney-client privilege Research areas of disparities Document legitimate explanations Consider making corrections where no explanation exists Lots of strategy behind this decision! Paid Sick Leave EO Order signed September 2015 Waiting for Proposed Rule 2016 Should be effective

15 Coverage Procurement contracts for services or construction Contracts for services covered by Service Contract Act Contracts for concessions, including concession contracts excluded by DOL regulations Contracts entered into with federal gov t in connection with federal property or lands and related to offering services to federal employees or the general public Requirements Provide up to 7 days of paid sick leave annually 1 hour for every 30 hours worked Accrued leave must be carried over each year up to 56 hours Reinstate sick leave balance for employees rehired within 1 year Separated employees not required to pay for accrued sick leave (though some states have such requirement) Use of Paid Sick Leave May be used for absences relating to Physical or mental illness, injury, or medical condition Diagnosis or care from health care provider Care of child, parent, spouse, domestic partner, or any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship Care, counseling, relocation, legal assistance, or civil or criminal legal proceedings related to domestic violence, sexual assault, or stalking of the employee or individual described above 15

16 Notice Employee muse provide 7 days written or oral notice when need for leave is foreseeable If not foreseeable, notice must be given as soon as practicable Employers can request medical certification only if absence is for 3 or more consecutive workdays Proposed Rule on Sex Discrimination OFCCP issued NPRM January 31, 2015 Final Rule expected December/January 2016 Eliminates existing Guidelines Replaces with Regulations Adopts Several EEOC Positions Cannot treat employee adversely because of genderbased stereotyped assumptions about family caretaking responsibility Leave for childcare must be available to men on same terms as for women Aligns with EEOC s guidance on pregnancy discrimination (presumably to be updated based on Young v. UPS) Cannot treat an employee adversely because they do not conform to gender norms and expectations about appearance, attire, and behavior Cannot treat employee adversely because he or she does not conform to sex-role expectations by being in a relationship with a person of the same sex 16

17 Examples of Other Updated Provisions Ban gender-specific job titles, i.e., lineman Provide transgender employees access to bathrooms used by gender to which they identify Adopts OFCCP s Directive on compensation and definition of similarly situated Thank you! Cara Crotty ccrotty@constangy.com 17