While it’s only November, we can certainly say that this has been a year of tremendous change for companies subject to the federal affirmative action laws and regulations. The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) implemented a number of major initiatives during 2015. With the extensive number of new and proposed initiatives involving OFCCP that have occurred in the last few years, it has become difficult to keep track of all the actions that federal contractors and subcontractors need to take. Below, we’re going to take a look at what happened during 2015 and what companies should be doing now. Please note that the information in this article is accurate as of November 12, 2015.
All Portions of the Revised Regulations Regarding Protected Veterans and Individuals with Disabilities Became Effective
OFCCP’s revised regulations regarding veteran and disability status first became effective on March 24, 2014. However, there were certain portions of these regulations (the affirmative action or “Subpart C” portions) that did not go into effect for individual federal contractors or subcontractors until the first time their respective affirmative action plans were updated after March 24, 2014. The very last date for that update to occur would have been March 24, 2015. Thus, all current federal contractors and subcontractors must be meeting the Subpart C provisions in these regulations along with the provisions that came into effect on March 24, 2014.
Actions to Take
Among the Subpart C provisions that federal contractors and subcontractors must now be implementing in an on-going way are:
- Collecting demographic information regarding veteran and disability status from applicants and employees.
- Making outreach efforts to recruit veterans and individuals with disabilities.
- Training personnel involved in the selection process about the company’s affirmative action obligations regarding veterans and individuals with disabilities.
- Reviewing mental and physical job qualifications to ensure they do not establish a barrier to the employment of qualified individuals with disabilities and qualified disabled veterans.
- Establishing an audit and reporting system that evaluates the company’s compliance with the affirmative action regulations.
By the end of the first year after the Subpart C provisions became effective, there were additional actions a company should have completed. (If a company’s affirmative action plans for veterans and individuals with disabilities are updated in December, January, February, or March, there is still time to complete the four actions noted below.)
- A re-survey of the workforce for disability status should have been conducted.
- Letters to vendors should have been sent notifying vendors of the company’s equal opportunity policy.
- A review of the company’s personnel processes should have been conducted.
- An assessment of the company’s outreach and recruitment efforts should have been conducted.
There are some Subpart C provisions where the time frames to complete the obligations are not clear. For example, federal contractors and subcontractors should have updated or should be updating their equal employment opportunity/affirmative action policy statements to incorporate certain ideas found in the revised regulations. While many companies have already updated their policy statements, those that haven’t done so yet should consider this a high-priority item.
Finally, the first affirmative action plan (AAP) for individuals with disabilities completed after March 24, 2014 should include or should have included a comparison of the percentage of individuals with disabilities in the employee population to the 7% utilization goal established by OFCCP. The first AAP for protected veterans completed after March 24, 2014 should include or should have included a veteran hiring benchmark.
Final Regulations Issued Regarding Expansion of Executive Order 11246 to Include Sexual Orientation and Gender Identity
President Obama signed amendments to Executive Order 11246 in July of 2014 that prohibit federal contractors and subcontractors from discriminating against applicants or employees on the basis of sexual orientation or gender identity. Regulations under these amendments became effective in a general way on April 8, 2015. Individual contractors and subcontractors did not need to adhere to these regulations until they entered into a new or modified federal contract or subcontract on or after April 8, 2015. While there had been some concern that OFCCP might require some form of data collection regarding sexual orientation and gender identity, there is in fact no such requirement in the final regulations.
Actions to Take
Under these new regulations, the most critical action to take is to ensure there is no discrimination against lesbian, gay, bisexual, or transgender (LGBT) applicants and employees. Beyond that, federal contractors and subcontractors must consider the following:
- EEO Tag Line – OFCCP has indicated in a webinar and in a response to a frequently asked question that if any of the classes protected under Executive Order 11246 are mentioned in EEO tag lines on job advertisements, then ALL classes found in the executive order, including sexual orientation and gender identity, must be mentioned.
- Restroom and Shower Room Usage – The most significant issues arising from the new regulations may involve issues regarding the use of bathrooms and shower rooms by transgender employees. OFCCP has indicated that applicants and employees must be allowed to use restrooms consistent with their gender identity. The agency has provided no formal guidance on shower rooms.
Final Regulations Issued Regarding Executive Order on Prohibiting Retaliation for Compensation Discussions
In April of 2014, President Obama signed an executive order that prevents federal contractors and subcontractors from retaliating against applicants or employees who discuss pay information. This executive order again amends Executive Order 11246. On September 11, 2015, OFCCP issued final regulations which implement the pay transparency requirements. The regulations become effective in a general way on January 11, 2016. Individual contractors and subcontractors do not need to adhere to these regulations until they enter into a new or modified federal contract or subcontract on or after January 11, 2016.
Actions to Take
Under these new regulations, there will be very limited circumstances in which federal contractors and subcontractors can take action against applicants or employees who discuss pay. The primary circumstance in which companies can take action involves situations where employees improperly receive and then share information about the pay of other employees. The pay transparency regulations (often referred to as the pay secrecy regulations) also have the following requirements:
- Disseminate Information to Applicants and Employees Using OFCCP-Prescribed Language – The pay secrecy regulations state that federal contractors and subcontractors must disseminate information about the prohibition on retaliation for discussing pay to applicants and employees. Companies are required to use specific language prepared by OFCCP for this purpose. The prescribed language can be found on OFCCP’s website. The regulations state that dissemination of the OFCCP language “shall be executed by electronic posting or by posting a copy of the provision in conspicuous places available to employees and applicants for employment.”
- Include OFCCP-Prescribed Language in Employee Manuals or Handbooks – There is a specific provision in the new regulations that requires companies to include OFCCP’s prescribed language in “employee manuals or handbooks.”
Unlike the veteran and disability provisions and the sexual orientation and gender identity provisions identified above, companies have until at least January 11, 2016 to implement the pay secrecy requirements.
Supplement to the “EEO is the Law”
When OFCCP released its pay secrecy regulations on September 11, 2015, it also released a supplement to the federal “EEO is the Law” poster. This supplement has information on OFCCP’s revised veteran and disability regulations, OFCCP’s new sexual orientation and gender identity regulations, and OFCCP’s new pay secrecy regulations. The supplement is available on OFCCP’s website.
Actions to Take
Federal contractors and subcontractors will need to make the supplement to the “EEO is the Law” poster available to applicants and employees. OFCCP has not indicated when the supplement must be posted, but it appears that it should be posted no later than January 11, 2016, when the pay secrecy regulations come into effect.
- Posting at Company Locations – The supplement should be posted at all company locations where the “EEO is the Law” and other employment-related postings are currently made available.
- Inclusion with Job Postings – Federal contractors and subcontractors that use an electronic system to make jobs available to potential candidates are required under the veteran and disability regulations to ensure that the “EEO is the Law” poster is “conspicuously stored with, or as part of, the electronic application.” It seems likely that this means the supplement should also be stored with, or as part of, the electronic application.
Items Still Awaiting Final Action by OFCCP
While a number of OFCCP items came to fruition in 2015, there are several OFCCP initiatives that are still awaiting final action.
1. Equal Pay Report
The same day that President Obama signed the Executive Order prohibiting retaliation against applicants or employees for discussing pay, the president issued a memorandum requiring the Secretary of Labor to issue regulations regarding the collection of pay data from federal contractors and subcontractors. On August 8, 2014, OFCCP issued proposed regulations regarding the creation of an Equal Pay Report. This Equal Pay Report would require companies to submit compensation data on an annual basis. Summary data would be submitted by EEO-1 category, and companies would provide the total number of employees and total W-2 wages by gender and race/ethnicity category. A separate report would be required for each facility of 50 or more employees.
Status of Initiative
No final regulations have been issued in regard to the Equal Pay Report. Until final regulations are issued, no specific action by federal contractors or subcontractors is required.
2. Sex Discrimination Regulations
On January 30, 2015, OFCCP issued proposed changes to its regulations regarding sex discrimination. These proposed changes would incorporate much of OFCCP’s recent guidance regarding evaluating compensation into the agency’s formal regulations. The proposed changes would also require that federal contractors and subcontractors adopt gender-neutral job titles for all positions, provide certain benefits to employees based on pregnancy and childbirth, and prevent sex-based stereotyping.
Status of Initiative
No final version of the proposed revisions to the sex discrimination regulations has been released to the public. However, OFCCP provided a final version of these regulations to the Office of Management and Budget (OMB) in October. If OMB approves this version of the regulations, the regulations may be released in final form in late 2015 or early 2016.
Where to Find More Information
OFCCP’s prescribed language under its pay secrecy regulations as well as the supplement to the “EEO is the Law” poster can be found at http://www.dol.gov/ofccp/PayTransparency.html. Additional information about all of the OFCCP initiatives noted above can also be found on OFCCP’s website. To check on the status of OFCCP’s sex discrimination regulations, visit the website for OMB’s Office of Information and Regulatory Affairs at http://www.reginfo.gov/.
Please note: Nothing in this article is intended as legal advice or as a substitute for any professional advice about your organization’s particular circumstances. All original materials copyright © HR Analytical Services Inc. 2015