ADP TOTALSOURCE®
Employment Regulatory and
Enforcement Activity Is Already
Underway. Are You Ready?
An employer’s guide to new regulations and initiatives that are
currently being considered and implemented by federal agencies.
Vol. II
2013/2014 Issue
HR. Payroll. Benefits.
Contents
About the Report
1
Wages and Hours Worked
2
Immigration
6
Workplace Safety
10
Equal Employment Opportunity Commission
13
Federal Contractors
17
Conclusion
23
About ADP TotalSource® 23
About Jackson Lewis 23
About the Report
President Obama won the November 2012 election,
while Republicans maintained control of the House
of Representatives. However, with Democrats still
holding control of the Senate, Congress remains
closely divided. As a result, continuing a trend
that started with the 2010 midterm Congressional
elections, there has been no new federal labor and
employment legislation passed since early 2010.
The legislative stalemate, however, has not slowed
regulatory and enforcement activity by federal
agencies. Despite the Sequester — automatic
federal budget cuts that kicked in March 1, 2013 —
many agencies, including the U.S. Department of
Labor (DOL), Equal Employment Opportunity
Commission (EEOC), Occupational Safety and
Health Administration (OSHA), Office of Federal
Contract Compliance Programs (OFCCP), and
Department of Homeland Security (DHS) have
been busy changing and updating federal labor
and employment regulations and enforcing
those regulations.
In addition, many agency initiatives come from
outside the regulatory rule-making process.
These initiatives and programs are not subject
to the strict rule-making process, which would
include public notice and an opportunity for the
public to comment on the proposed rules. Such
initiatives and programs have the potential to
shape agency policy and can have an important
impact on employer operations.
Federal agencies have also openly stated their
commitment to change, as part of fulfilling their
overall mission statement. The new Secretary
of Labor, Thomas E. Perez, who was approved by
the Senate in July 2013, fully supports statements
made by his predecessor, Hilda Solis. In January
2013, Solis said, “We know the market alone will
not protect workers and will not guarantee a secure
retirement… [DOL’s] regulatory work is crucial to
protecting and strengthening the middle class.”
The purpose of this special report is to provide
employers with information to prepare for, and
plan for, the new regulations and initiatives and
those that are currently being considered by
federal agencies.
Are you ready?
The new Secretary of Labor,
Thomas E. Perez, who was
approved by the Senate in
July 2013, fully supports
statements made by his
predecessor, Hilda Solis.
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
1
Wages and Hours Worked
The U.S. Department of Labor (DOL) is an agency
that enforces many federal labor and employment
laws discussed in this report, including laws
regarding workplace safety and federal contracting.
One of DOL’s divisions, the Wage and Hour Division,
also enforces a key wage-and-hour law called the
Fair Labor Standards Act (FLSA). This law has
received renewed attention and vigor under the
Obama administration. In federal FY 2012, DOL
collected more than $97 million in back wages for
more than 124,000 employees.
boards.” This is not the DOL’s first attempt to put
its data, regarding purported violations, on the
Internet and in the public eye.
Perez Replaces Solis as Secretary
of Labor
In federal FY 2012, DOL
collected more than $97 million
in back wages for more than
124,000 employees.
In a move surprising to the employment
community, Secretary of Labor, Hilda Solis,
submitted her resignation to President Obama
in January 2013, creating a vacancy at the DOL’s
highest post.
On July 18, 2013, the Senate approved President
Obama’s nominee, Thomas E. Perez, to replace
Solis and become the nation’s 26th Secretary of
Labor. Perez has spent his entire career in public
service and joined the department on July 23,
after serving as the assistant attorney general
for the Civil Rights Division at the U.S. Department
of Justice. Perez is expected to continue the
DOL’s tough stance on enforcement and
regulatory initiatives.
“App” Competition to IncorporatE
Employer Violation Data
Building upon its prior efforts to leverage
contemporary technology, the DOL has announced
an “app” competition, inviting the public to create
an app to incorporate its data regarding labor
investigations “with consumer ratings websites,
geo-positioning Web tools, and other relevant data
sets, such as those available from state health
2 Employers must continue to strive for compliance
with wage-and-hour laws, and should regularly
monitor whether allegedly aggrieved individuals,
attorneys or governmental entities — including
the DOL through this or other initiatives — are
publicizing any purported claims on the Web.
D.C. Circuit Court Strikes Down 2010
DOL Administrator’s Interpretation
Regarding FLSA Status of Loan Officers
In 2010, the Department of Labor announced
it would cease its “opinion letter” practice,
wherein employers could submit written
questions regarding application of the FLSA
and its implementing regulations, and receive
guidance. Replacing the opinion letter structure
was an “Administrator’s Interpretation,” in which
the DOL would simply issue an advisory opinion
on its own volition. Contemporaneous with
announcing this new practice, the DOL issued its
first Administrator’s Interpretation, and took the
position that mortgage loan officers generally do
not qualify for exemption from overtime under
the administrative exemption. This Interpretation
directly contradicted the DOL’s prior analysis of the
same issue (presented in the traditional opinion
letter fashion) provided just four years previously.
In response to this DOL action, the Mortgage
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
Bankers Association filed suit challenging the
DOL’s authority to change its position. The Court
of Appeals for the District of Columbia Circuit
ruled that the DOL’s reversal violated the
Administrative Procedure Act (APA), and thus
the Administrator’s Interpretation is invalid. See
Mortgage Bankers Ass’n v. Harris, 2013 U.S. App.
LEXIS 13470 (D.C. Cir. July 2, 2013).
Congressional SubCommittee Debates
Extension of “Comp Time” Under the FLSA
for Private Employers
Revisiting a concept for the first time since
2009, a House of Representatives Subcommittee
recently conducted a hearing regarding the
Working Families Flexibility Act (H.R. 1406). The
Act, proposed on April 9, 2013, seeks to amend
the FLSA to permit private-sector employers to
compensate employees for overtime work by
providing compensatory time off (e.g., “comp
time”), in lieu of cash overtime wages. Under
current law, only public-sector employers
are allowed to make such payments in lieu of
overtime pay.
Supporters cite the flexibility, particularly for
working families, that the availability of comp time
provides. On the other hand, detractors claim that
permitting payment for overtime work through
time off will unfairly reduce the wages currently
earned by nonexempt overtime eligible workers.
“In amending the FLSA to permit public-sector
employers to provide compensatory time off,
Congress implicitly acknowledged the strain
on public budgets imposed by a cash overtime
requirement,” observed former Wage and Hour
Administrator Paul DeCamp. “The proposed bill
acknowledges that the same budgetary strain
attaches to overtime work for private-sector
employers, many of whom are small or mediumsized businesses regulated by the FLSA through
its expansive coverage provisions.”
While previous efforts to pursue such a rule
change were unsuccessful, prevailing economic
conditions may force Congress to give more
consideration to the proposal than in prior years.
DOL Continues “We Can Help” Campaign
Aimed at Increasing Enforcement
“We Can Help” is a campaign designed to educate
workers about their rights under the FLSA. The
campaign includes, among other features, a
separate website with links to pages explaining
the rights of workers and Public Service
Announcements — in both English and Spanish
by Hollywood stars, including Jimmy Smits
and Esai Morales. Secretary Solis and Dolores
Huerta (co-founder of the United Farm Workers of
America, AFL-CIO) also recorded PSAs in support
of the campaign.
Employers must understand that
the burden is on them to obey
the law, not on the DOL to catch
them violating the law.
“We Can Help” appears to be targeted toward
specific industries, such as construction, day
laborers and farm workers, and it clearly reaches
out to noncitizens and/or undocumented workers.
The campaign’s encouragement of self-action in
employee record keeping, coupled with the media
blitz, will likely increase complaints filed with
the DOL. To that end, the DOL added some 250
additional investigators, in large part to support
this campaign.
DOL Collaboration with the American
Bar Association
The DOL continues to partner with the American
Bar Association (ABA), which is a national
association of lawyers. Under this partnership,
FLSA or Family and Medical Leave Act (FMLA)
complainants, who are informed that the DOL is
declining to pursue their complaint, are provided
a toll-free number to contact a newly created,
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3
ABA-sanctioned Attorney Referral System. The
DOL has also pledged to provide prompt, relevant
information and documents on the referred case
to complainants and the referral attorney electing
to take the case including but not limited to a list
of any violations found and the amount of back
wages owed.
DOL’s “Plan/Prevent/Protect”
Regulatory Initiative
Pursuant to the DOL’s “Plan/Prevent/Protect”
initiative, employers and others must “find and fix”
violations — that is, assure compliance — before
a DOL investigator arrives at the workplace.
Employers must understand that the burden is
on them to obey the law, not on the DOL to catch
them violating the law. This is the heart of the
DOL’s new strategy. Simply put, the DOL hopes to
replace “catch me if you can” with “Plan/Prevent/
Protect,” if a regulation is finalized.
Although the specifics would vary by law, industry
and regulated enterprise, this strategy would
require (at some unknown point in the future) all
regulated entities to take three steps to ensure
safe and secure workplaces and compliance with
the law:
Plan: DOL will propose a requirement that
employers and other regulated entities create
a plan for identifying and remediating risks of
legal violations and other risks to workers —
for example, a plan to review potentially unlawful
pay practices. The employer would provide
their employees with opportunities to participate
in the creation of the plans. In addition, the plans
would be made available to workers so they
can fully understand them and help to monitor
their implementation.
Prevent: DOL will propose a requirement that
employers thoroughly and completely implement
the plan in a manner that prevents legal
violations. The plan cannot be a mere paper
4 process. The employer cannot draft a plan and
then put it on a shelf. The plan must be fully
implemented for the employer to comply with the
“Plan/Prevent/Protect” compliance strategy.
Protect: DOL will propose a requirement that the
employer or other regulated entity ensures that the
plan’s objectives are met on a regular basis. Just
any plan will not do. The plan must actually protect
workers from violations of their workplace rights.
Employers who fail to take these steps to address
comprehensively the risks, hazards, and inequities
in their workplaces will be considered out of
compliance with the law and, depending upon the
agency and the substantive law it is enforcing,
subject to remedial action.
“Right to Know” Regulation
This proposed rule (Right to Know
under the Fair Labor Standards
Act) has generated interest in the
employer community because of
the potential burden and cost that it
would place on employers.
From an employer’s perspective, one of the most
difficult challenges associated with the FLSA is
properly classifying employees as exempt or nonexempt. This is an important distinction. Exempt
employees are not entitled to be paid overtime,
while nonexempt employees are.
DOL has proposed a new rule, entitled the
“Right to Know under the Fair Labor Standards
Act,” that would require employers to produce a
written “classification analysis” to justify exempt
employee status (and/or independent contractors
status) for each employee. This proposed rule has
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
generated interest in the employer community
because of the potential burden and cost that it
would place on employers.
DOL Launches Timesheet Application
for Smartphones
capture information on types of pay not currently
addressed, “such as tips, commissions, bonuses,
deductions, holiday pay, pay for weekends, shift
differentials and pay for regular days of rest.”
What happens when an employee is misclassified
as exempt by an employer? That employee may
be owed several years of overtime compensation
(and additional penalties may apply). In order to
determine the amount of compensation due, the
DOL may ask the employee to construct a record
of hours worked. This has now become an easier
task for employees.
The DOL launched its first application for
smartphones, described as “a timesheet to help
employees independently track the hours they
work and determine the wages they are owed.”
Users can track regular work hours, break time,
and any overtime hours they work for one or more
employers, according to the DOL press release
on the application. The free “app” is compatible
with iPhone® and iPod touch® and is available in
English and Spanish.
The DOL predicts that workers’ information
“could prove invaluable” during an investigation of
employers accused of failing to maintain accurate
time records. Indeed, the app will allow workers
to “email the summary of work hours and gross
pay as an attachment” to DOL investigators. The
app provides a “[glossary, contact information and
materials about wage and hour laws through links
to the Web pages of the department’s Wage and
Hour Division.” According to former Secretary of
Labor Solis, “This app will help empower workers
to understand and stand up for their rights when
employers have denied their hard-earned pay.”
The DOL also is considering future updates to
enable use on other smartphone platforms,
such as AndroidTM and BlackBerry®, and to
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
5
Immigration
As noted on the website of the Department of
Homeland Security (DHS) by (then) Secretary
of Homeland Security, Janet Napolitano, “DHS
has forged a smart and effective approach to
enforcing our immigration laws and prioritizing
public safety while targeting criminal aliens and
aggressively pursuing employers that knowingly
take advantage of illegal labor.” While at the time
of writing this special report, Napolitano has
resigned and has not yet been replaced, there
is no doubt that DHS will continue to focus on
businesses that hire undocumented workers,
and not the workers themselves.
The Department of Justice (DOJ) has launched
a new educational video to assist employers
in avoiding charges of discrimination in the
employment eligibility verification Form I-9 process
and in the use of E-Verify. The video also aims to
help educate employees about their legal rights.
Employers using E-Verify also
may improperly request
specific documents due to a
misunderstanding of E-Verify
requirements.
The Office of Special Counsel for ImmigrationRelated Unfair Employment Practices (OSC)
within the DOJ’s Civil Rights Division enforces the
antidiscrimination provision of the Immigration
and Nationality Act (INA). That provision
prohibits employers from discriminating against
work-authorized individuals in hiring, firing,
recruitment, or referral for a fee, regardless of
their citizenship status or national origin. The law
also prohibits discrimination during the Form I-9
and E-Verify processes.
This change in approach — from one that
emphasized punishing the illegal foreign worker
to one that emphasizes punishing the employer
that hired the worker — is designed to reduce
the demand for illegal employment by focusing
on employers suspected of employing illegal or
unauthorized workers.
It is also an approach that is being supported by
stepped-up regulatory enforcement. Under the
Obama administration, DHS has conducted more
audits and debarred more employers for hiring
illegal immigrants than in the entire tenure of
the prior administration. Employers should
take notice.
6 New Video Educates Employers about the
I-9 Process
The OSC has developed its latest video to address
issues that frequently arise from calls to its hotline
and charges that are filed. The DOJ explained
that employers sometimes incorrectly believe
they need to request more documents than are
necessary for the employment eligibility verification
Form I-9. Employers using E-Verify also may
improperly request specific documents due to a
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
misunderstanding of E-Verify requirements. The
new video highlights some of the practices that are
not permissible and may lead to claims under the
INA’s antidiscrimination provision.
USCIS May Be Contacting Your Employees
Relations Board (NLRB) that will allow both
agencies to share information, to refer matters to
each other concerning potential violations of the
laws governed by the respective agencies, and to
coordinate multiagency investigations.
On July 1, 2013, U.S. Citizenship and Immigration
Services (USCIS) announced its latest “customer
service enhancement” to E-Verify. If an employee
voluntarily provides his or her email address on
the Form I-9, E-Verify will notify the employee
directly of a Tentative Non- Confirmation (TNC) at
the same time it notifies the employer. Given that
E-Verify monitors how an employer complies in
a timely manner with its contractual obligations
to the Government, employers must review their
standard operating procedure to ensure it does not
run afoul of the law.
The MOU was designed to encourage employees
to seek redress for violations under the
appropriate laws and through the appropriate
federal agencies, even though such a claim
may have been initially brought to the attention
of the wrong agency. “Employers cannot avoid
liability under the law just because an employee
has turned to the wrong agency or is unaware of
additional protections available under a different
law,” said Gregory Friel, Deputy Assistant Attorney
General for the Civil Rights Division.
But now that E-Verify is also “deputizing”
employees — by notifying them and encouraging
them to report alleged discrimination or unfairness
— employers must also confirm that information
being transmitted via E-Verify to the Government
mirrors the documents provided by the new hire,
and that each employee is treated in a uniform
and consistent fashion. Systems may have to be
implemented to provide such assurance.
Employers must use the new Form
I-9 beginning on May 7, 2013 or they
will be subject to penalties…
In addition to providing the initial notice of a TNC,
E-Verify will send reminder emails to employees if
no action to resolve the TNC has occurred within
four days of a decision to contest and notify them
about the possible need to update a Social Security
or Department of Homeland Security record.
Federal Agencies to Cooperate to
Increase Prosecutions for ImmigrationRelated Matters
The United States Department of Justice
announced on July 8, 2013, that its Civil
Rights Division’s Office of Special Counsel
for Immigration–Related Unfair Employment
Practices (OSC) has entered into a Memorandum
of Understanding (MOU) with the National Labor
The MOU will allow the OSC to make referrals to
the NLRB with the express authorization of the
complaining party when the matter investigated
by the OSC suggests a violation of the NLRA.
Likewise, the OSC can expect to receive referrals
from the NLRB when the matter before it
suggests a possible unfair immigration-related
employment practice, such as demanding specific
documentation for the employment authorization
verification process for completion of the Form I-9
form or discrimination based on citizenship status
or national origin. The MOU further provides for
cross training between the two federal entities,
as well as technical assistance for identifying and
making appropriate referrals. The OSC maintains
more than 50 similar agreements with other
federal, state, and local agencies including the
Equal Employment Opportunity Commission (EEOC).
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
7
The NLRB, often inaccurately thought of as being
interested only in collective bargaining and
union organizing issues, has in recent years
pursued violations by nonunion employers.
Among other things, the NLRB has brought to
light violations in common workplace policies at
numerous, unwary, employers.
New Form I-9 Must Be Used Beginning
May 7, 2013
On April 9, 2013, U.S. Citizenship and Immigration
Services (USCIS) published a notice in the Federal
Register clarifying the date by which the new Form
I-9 must be used instead of prior versions of the
form. Employers are advised that they must use the
new Form I-9 beginning on May 7, 2013, or they will
be subject to penalties under Section 274A of the
Immigration and Nationalization Act (INA).
An employer who failed to
complete a Form I-9
Employment Eligibility
Verification Form within
three days of an employee’s
start date commits
a substantive violation…
Good Faith Not a Defense to Substantive
I-9 Violations
An employer who failed to complete a Form I-9
Employment Eligibility Verification Form within
three days of an employee’s start date commits
a substantive violation for which the good faith
defense is not available to mitigate the assessed
fine, according to a recent ruling from the Office of
the Chief Administrative Hearing Officer (OCAHO)
of the Department of Justice’s Executive Office for
Immigration Review. See United States of America
v. Anodizing Industries Inc., OCAHO Case No.
12A00030, May 24, 2013.
8 DHS, Immigration and Customs Enforcement
(ICE) filed a complaint alleging that Anodizing
Industries, Inc. of Los Angeles, California, had
hired 26 named employees for whom it failed to
timely prepare Forms I-9 within three days of their
start dates. The length of time between the start
dates of the employees and dates of completion
of their respective Form I-9 form ranged from
a matter of weeks to 22 years. The company
argued that it had complied in good faith with the
employment verification requirements in hiring
the 26 employees, and that the proposed fines
were excessive and should be mitigated under
the statutory penalty factors. ICE sought a total of
$25,525.50 in civil money penalties.
The Administrative Law Judge (ALJ) held that a
failure to prepare a Form I-9 when hiring a new
employee is not a technical or procedural failure,
but rather is substantive in nature. Moreover,
the failure to prepare a Form I-9 in a timely
fashion not only is a substantive violation, but
also a serious one because, the ALJ explained,
an employee working on the job could be
unauthorized for employment during the entire
time his or her eligibility remains unverified.
Furthermore, the longer an employer delays
in preparing a Form I-9, the more serious is
the violation.
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
Accordingly, the good faith defense was not
applicable and the company was not entitled to
notice and opportunity to cure the violations.
The good faith defense, thus, is limited to
technical or procedural failures to comply
with a partial verification requirement, rather
than to failures to comply with the verification
requirement as a whole. The defense did not
alter or affect the necessity of completing the
Form I-9 within three business days of the start
date or of retaining the forms for the required
period of time. Omissions and delays can prove
costly. Each failure to properly and timely prepare,
retain, or produce the forms in accordance with
the requirements of the employment verification
system is a separate violation of the Act.
Despite certain mitigating factors (none of the
employees were unauthorized workers, there
was no prior history of Form I-9 violations, and
Anodizing was a small business), the ALJ still
affirmed an adjusted penalty of $15,600, as a
matter of discretion, reduced from the $25,525.50
originally sought by ICE.
New, Searchable Registry of LCA and
PERM Applications Will Be Available
The registry, expected to launch July 1, will
include information about cases certified as far
back as April 2009. New cases will be available
as early as two business days after certification.
The registry will be a searchable database. Users
will be able to pull up online information, as well
as redacted PDF copies of the applications. DOL
will redact employee names, employee personal
information, employer FEINs and other sensitive
information. The identities of employers who are
sponsoring foreign nationals for employment, and
names of the positions involved, however, will be
disclosed. As a result, the public will have more
access to employment opportunities available by
position, company, industry, and location.
New Comprehensive Policy Manual
USCIS has spent the last four years creating a
one-stop shop for all laws, regulations and policy
guidance it administers or promulgates. USCIS
has unveiled “version 1.0” of its effort. The online
USCIS Policy Manual (Manual) is available at
www.uscis.gov. USCIS Director, Alejandro
Mayorkas, on January 15, 2013, stated the
intention of the Manual is to bring consistency,
predictability and transparency to the legal
authority and policies that drive USCIS petition
adjudication. Previously, to access the pertinent
laws, regulations and policies related to a
specific subject matter handled by the USCIS,
information would have to be collected from a
number of different resources, independently
housed by the issuing agency. These resources
included the Adjudicator’s Field Manual and a
collection of memoranda, legislation, regulations
and interpretive guidance coming from different
agencies. These materials will now be replaced
by a centralized repository of all relevant policy
guidance and legal authority.
DOL is launching an online registry to publish data
from certified PERM (Program Electronic Review
Management) and Labor Condition Applications
(LCA) filed via its online iCERT system.
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
9
Workplace Safety
The Occupational Safety and Health
Administration (OSHA) is the federal agency
responsible for workplace safety. David
Michaels, the head of OSHA, has publicly said
that employers can expect a lot of progress on
federal regulations in 2013, along with the agency
continuing a tough enforcement stance for
existing laws and regulations.
(Standards Improvement Project Phase IV,
Infectious Disease, Injury and Illness Prevention
Programs, Combustible Dust, Backover
Protection, and two consensus standard update
actions), and initiate SBREFA (Small Business
Regulatory Enforcement Fairness Act) reviews for
five rules (Combustible Dust, Backover Protection,
one chemical standard, and two other initiatives).
OSHA Will Continue Aggressive
Enforcement
OSHA is requesting a significant decrease in
funding for its Federal Compliance Assistance
programs. State OSHA-program support and
State compliance assistance would remain the
same under OSHA’s 2014 Budget request.
According to its Budget Justification Document, in
FY 2014, OSHA proposes to continue its aggressive
enforcement posture. The Budget Justification
cites a recent study published in Science magazine,
entitled Randomized Government Safety Inspections
Reduce Worker Injuries with No Detectable Job
Loss, which claimed that enforcement inspections
result in safer workplaces and provide employers
with significant savings through reduced
workers’ compensation costs. OSHA states in the
Justification that “the average employer saved
$355,000 (in 2011 dollars) as a result of an OSHA
inspection.” The Justification also states that OSHA
is currently working with the Department of Labor’s
policy office to “test the impact of inspections on
injury and illness rates and overall compliance with
OSHA standards and regulations for establishments
on OSHA’s targeted inspection lists.”
The Budget Justification is a good indicator of the
priorities of the Agency. The Agency will continue
to emphasize enforcement and regulatory
activities, and employers should continue to
monitor the Agency’s efforts in these areas.
OSHA Launches Temporary Worker
Initiative
OSHA has launched an initiative that focuses on
protecting temporary employees from recognized
workplace hazards. Under this initiative, OSHA is
directing all OSHA compliance officers to assess
whether employers, who use temporary workers,
OSHA also seeks an increase in funding for its
standard-setting activities, including an increase
in $2 million dollars for “contract support for
the agency’s rule-making efforts to protect
workers from complex and dangerous hazards.”
With the funding requested:
OSHA projects that it will issue four Final
Rules (Infectious Disease, Record-keeping
Modernization, Beryllium, and Vertical Tandem
Lifts), seven Notices of Proposed Rule-making
10 Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
OSHA Clarifies that Workers May
Authorize a Union or Community
Organization to Act as Their
Representative
are complying with their responsibilities under
the Occupational Safety and Health Act of 1970.
For purposes of this initiative, temporary workers
are defined as all employees supplied to a host
employer and paid by a staffing agency.
As part of their inspections, OSHA compliance
officers will determine whether any employees
are temporary workers and whether any of the
identified temporary employees are exposed to
a violative condition. They also will assess, by
records review and interviews, whether temporary
workers received appropriate training in a language
and vocabulary they can understand. OSHA
compliance officers will pay particular attention to
whether temporary workers are trained in how to
protect themselves from serious hazards, such as
wearing appropriate protective equipment when
working with hazardous chemicals and the lockout/
tagout procedures and protections.
OSHA compliance officers also will be required to
document the name of each temporary worker’s
staffing agency, the agency’s location, the
supervisory structure of both the host employer
workers and staffing agency, and the extent to
which temporary workers are being supervised on
a day-to-day basis by either the host employer or
the staffing agency.
OSHA released a new interpretation letter on
April 5, 2013, clarifying that nonunion employees
may select a non-employee who is “affiliated with
a union” or with a “community organization” to
act as their walk-around representative during
OSHA inspections of their employer’s worksite. In
reaching this conclusion, OSHA concluded that
language in the Occupational Safety and Health Act
authorizes participation in the walk-around portion
of an OSHA inspection by a person affiliated with
a union without a collective bargaining agreement
or with a community representative so long as the
individual has been authorized by the employees to
serve as their representative.
According to the report, OSHA
completed a total of 2,769
cases in 2012, a significant
increase from the 1,948
completions in 2011.
Whistle-blower Claims are on the Rise
Employee claims of retaliation have risen steadily
on a year-to-year basis and recent government
statistics suggest this is a continuing trend.
OSHA, which enforces 22 separate federal
whistle-blower statutes, has issued updated
statistics showing the number of whistle-blower
cases filed with the agency — and their outcome.
According to the report, OSHA completed a total
of 2,769 cases in 2012, a significant increase from
the 1,948 completions in 2011. This continues
an upward trend going back several years. The
number of complaint “determinations” in 2012
was 2,867, a 42 percent increase from the 2,013
“determinations” in 2011.
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11
Injury and Illness Prevention Program
(IIPP) is Still a Priority
OSHA’s proposed IIPP rule has been the agency’s
most significant regulatory priority. Although
it has been under development for three years,
OSHA has indicated that it is ready to begin the
Small Business Regulatory Enforcement Fairness
Act (SBREFA) process for the rule, in which the
agency solicits input regarding the rule from
affected small business entities. Employers
should remain alert to this agency priority; it is
likely to have a broad impact when promulgated.
Existing record-keeping rules
require employers to report inpatient hospitalizations of three
or more employees to OSHA
within eight hours.
hurt or become ill. These proactive programs
can substantially reduce the number and severity
of workplace injuries and illnesses, and can
alleviate the associated financial burdens on U.S.
workplaces, according to OSHA.
The fact sheet explains the major elements of an
effective program, which include management
leadership; worker participation; hazard
identification, assessment, prevention and control;
education and training; and program evaluation
and improvement. Thirty-four states and many
nations around the world already require or
encourage employers to implement similar
programs, OSHA said.
Stricter Injury and Illness Reporting
Obligations
OSHA has proposed requiring employers to report
workplace amputations to the agency within 24
hours, and all in-patient hospitalizations within
eight hours. Existing record-keeping rules require
employers to report in-patient hospitalizations
of three or more employees to OSHA within eight
hours. Any workplace fatality would continue
to be reportable as well. In addition, OSHA’s
proposed revisions to the record-keeping rules
would change the kinds of establishments that are
routinely exempt from record-keeping obligations.
New Injury and Illness Prevention
Programs Fact Sheet
A new OSHA fact sheet describes some common
program elements of Injury and Illness Prevention
Programs and how to implement them. These
preventive programs help employers locate and
correct workplace hazards before workers are
12 Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
Equal Employment
Opportunity Commission
The Equal Employment Opportunity Commission
(EEOC) is a federal agency that enforces many
federal discrimination laws, including those
that prohibit discrimination based on race, sex,
religion, color, national origin, disability, and age.
Jacqueline Berrien, Chair of the EEOC, has
noted that while “blatant forms of discrimination
have receded, more sophisticated, but equally
effective methods of restricting employment
opportunities, have emerged — not only for people
with disabilities, but also on the basis of race,
color, national origin, religion, and sex…The EEOC
will continue to work to meet new and emerging
challenges in order to ensure the equality of
employment opportunity to all.”
Targeting Class-Based Discrimination
Tops EEOC’s Ambitious 2013-2016 Strategic
Enforcement Plan
The EEOC has announced the final approval of its
2013-2016 Strategic Enforcement Plan (“SEP”).
This is a revised version of the draft SEP the EEOC
issued on September 4, 2012. Consistent with the
draft SEP, in the final SEP the EEOC announces
that its number one enforcement priority for the
next four years will be targeting class-based
recruitment and hiring discrimination. The
priorities listed by the EEOC are as follows:
1. Eliminating barriers in recruiting and hiring.
As part of this effort, the agency will also focus
on exclusionary policies and practices that
allegedly steer individuals into specific jobs
due to their status in a particular group.
The EEOC announces that
its number one enforcement
priority for the next four
years will be targeting classbased recruitment and hiring
discrimination.
3. Addressing emerging and developing issues.
These include: a) Americans with Disabilities
Act reasonable accommodation, coverage,
qualification standards, and employer’s use
of the undue hardship and the direct threat
defense; b) Accommodating pregnancyrelated limitations under both Title VII of the
Civil Rights Act and the ADA; and c) Seeking
protection for lesbian, gay, bisexual, and
transgender individuals under Title VII.
4. Enforcing the equal pay laws through the use
of “directed investigations” and Commissioner
Charges.
5. Preserving access to the legal system, which
includes proceeding against employers who
engage in retaliatory practices or use overly
broad settlement waivers.
6. Preventing harassment through both litigation
and educational outreach.
2. Protecting immigrant, migrant, and other
vulnerable workers. The EEOC lists disparate
pay, job segregation, harassment, and human
trafficking as particular practices it will
pursue vigorously.
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
13
Title VII Prohibits Discrimination against
Transgender Workers
Transgender discrimination is discrimination on the
basis of “sex” under Title VII of the Civil Rights Act,
the EEOC decided in an historic opinion. — Macy v.
Holder, Appeal No. 0120120821 (Apr. 20, 2012). The
case arose out of a dispute between job applicant,
Mia Macy, and the federal agency that would have
been her employer, the Bureau of Alcohol, Tobacco,
Firearms, and Explosives (“ATFE”). When Macy
applied for a job, she presented as male. Shortly
thereafter, Macy informed ATFE that she was
transitioning from male to female. Subsequently,
ATFE informed Macy that another applicant had
been hired because that applicant was farther
along in the background-check process. Macy filed
a complaint against ATFE with the EEOC alleging
that the reasons proffered for not hiring her were
pretextual and that the true reason was because of
her “sex, gender identity (transgender woman) and
on the basis of sex stereotyping.”
The EEOC agreed with Macy. It held that Title VII
of the Civil Rights Act of 1964 bars discrimination
not only on the basis of biological sex, but also
because of gender stereotyping. The EEOC then
reasoned that Macy could establish a viable sex
discrimination claim on the grounds that ATFE
believed that biological men should present as
men and wear male clothing, or, alternatively, that
ATFE was willing to hire a man, but not a woman.
Either way, the EEOC concluded, transgender
discrimination is discrimination “based on…sex”
and violates Title VII.
Macy v. Holder signals a turning point in
employment discrimination law on a national
level. The EEOC undoubtedly will view any
allegation of transgender discrimination as
unlawful sex discrimination in negotiations with
employers and in agency-sponsored litigation.
New Enforcement Guidance on Use
of Arrest and Conviction Records in
Employment
The EEOC issued a revised “Enforcement
Guidance on the Consideration of Arrest and
Conviction Records in Employment Decisions
14 under Title VII of the Civil Rights Act of 1964.” The
Guidance is effective immediately.
The new Guidance provides examples of an
applicant’s or employee’s proper or improper
disqualification, based on his or her criminal
record. A common practice among some
employers is to develop an internal policy
regarding the types of convictions that will
disqualify an individual from employment. The
Guidance contemplates that an employer may
satisfy its Title VII obligations by using an internal
policy if it is “narrowly tailored.” The Guidance
explains “narrowly tailored” as a “demonstrably
tight nexus to the position in question. Title VII
thus does not necessarily require individualized
assessment in all circumstances.”
The Guidance observes that
persons who do not actually
apply for employment may
have a cause of action against
an employer if the potential
applicant is “discouraged
from applying” because an
employer has a reputation in
the community for excluding
individuals with criminal records.
The Guidance clearly prefers that a targeted screen
be accompanied by notice to the individual under
scrutiny — and an individualized assessment of
the individual and the crime and the position in
question. An individualized assessment would
allow the applicant or employee to explain the
circumstances of the conviction and why the
conviction should not exclude him or her from
employment. The Guidance lists eight possible
topics of consideration in an individualized
assessment, including these three:
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
• The facts and circumstances surrounding the
offense or conduct;
• Evidence that the individual performed the
same type of work, post-conviction, with the
same or a different employer, with no known
incidents of criminal conduct; and
• Employment or character references and
other information regarding the individual’s
fitness for the particular position.
The Guidance states that if the individual does not
respond to the employer’s inquiries, the employer
may make its decision without the information.
Individuals are “presumed innocent unless
proven guilty;” thus, the Guidance says, the
“arrest record standing alone may not be used
to deny an employment opportunity.” However,
the Guidance allows an employer to make an
employment decision based on the conduct
underlying the arrest, if the individual would be
unfit for the position because of the conduct. As
illustration, the Guidance uses the situation in
which an elementary school assistant principal
is arrested after several young girls reported the
assistant principal of inappropriate touching.
School policy permits terminating employees
who engage in conduct that impact the health
and safety of students. The assistant principal
denies committing inappropriate conduct, but the
school finds the denial not credible. The school
terminates his employment. In this situation, the
EEOC would find no violation of Title VII, because
the school’s policy is linked to conduct relevant
to the job and the decision is based on the
underlying conduct.
The Guidance notes that federal laws and
regulations prohibit the employment of persons
with records of certain crimes in particular
positions, e.g., child-care workers in federal
agencies, bank employees and port workers.
It finds that Title VII does not preempt these
federally imposed restrictions. Moreover, although
applicable regulations may allow an employer to
obtain a waiver from these restrictions, “Title VII
does not mandate that an employer seek such
waivers,” the Guidance states.
Perhaps the greatest concern raised by the
Guidance is the Commission’s refusal to allow
employers to establish business necessity based
on compliance with state or local laws prohibiting
the employment of persons with certain criminal
convictions. According to the Guidance, an
employer who takes adverse action required by
state law or local regulations nonetheless must
demonstrate that its policy is job-related and
consistent with business necessity.
The Guidance observes that persons, who do not
actually apply for employment, may have a cause
of action against an employer — if the potential
applicant is “discouraged from applying” because
an employer has a reputation in the community
for excluding individuals with criminal records.
As a “best practice,” the Guidance encourages
employers not to ask applicants about their
criminal records. According to the EEOC, not
asking about criminal records early in the
application process is important, because an
employer is more likely to assess the relevance of
an applicant’s criminal records objectively when it
already knows about the applicant’s qualifications
and experience.
Training your managers, hiring officials
and decision makers on Title VII and the
nondiscriminatory manner of considering criminal
records is another best practice encouraged by
the Guidance.
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
15
Portability and Accountability Act (HIPAA), the
Affordable Care Act (ACA), and Sections 503 and
504 of the Rehabilitation Act were highlighted at
the meeting. Some meeting participants criticized
both private and public employers for having
wellness programs that could violate these laws.
The Guidance reminds employers that the
inconsistent application of their policies on
criminal convictions may result in accusations of
disparate treatment discrimination. The Guidance
addresses disparate impact on African-Americans
and Hispanics, but does not address disparate
impact based on sex.
EEOC Taking a Close Look at Employer
Wellness Programs
The EEOC has heard testimony from a panel
consisting of representatives of the business
community, advocacy groups and providers on
the treatment of employer-sponsored wellness
programs under federal equal employment
opportunity laws. According to the EEOC’s press
release, issued after the May 8, 2013 meeting,
“Wellness programs are an increasingly common
feature of employee benefits programs.” Yet
unanswered questions on the interplay of federal
antidiscrimination laws enforced by the EEOC
and other laws impacting wellness programs
can make employer compliance a complex
undertaking. The EEOC’s meeting appears to
indicate the Commission will carefully examine
rules governing wellness programs.
One key take-away from the meeting is that
wellness programs (which face significant
resistance from a number of advocacy groups)
could be challenged under a number of federal
statutes, as the law is complex and evolving. The
Americans with Disabilities Act (ADA), the Genetic
Information Nondiscrimination Act of 2008 (GINA),
Title VII of the Civil Rights Act of 1964 (Title
VII), the Age Discrimination in Employment Act
(ADEA), the Equal Pay Act (EPA), Health Insurance
16 The ADA, for example, prohibits medical inquiries
unless they are “voluntary” and “part of an
employee health program available to employees
at that work site…” According to the EEOC’s 2000
Enforcement Guidance on Disability-Related
Inquiries and Medical Examinations of Employees
Under the Americans with Disabilities Act (ADA),
“A wellness program is ‘voluntary’ as long as
an employer neither requires participation nor
penalizes employees who do not participate.” In
an informal letter issued in 2013, the EEOC added
that it “has not taken a position on whether and to
what extent a reward amounts to a requirement to
participate, or whether withholding of the award
from nonparticipants constitutes a penalty, thus
rendering the program involuntary.”
Shortly after the EEOC’s May 8 meeting, the
U.S. Departments of Health and Human
Services (HSS), Labor and the Treasury issued
final regulations on the treatment of wellness
programs under the Affordable Care Act
(ACA). While the new regulations raise the
maximum permissible reward that may be
offered in connection with certain wellness
programs, they make clear that outcome-based
financial incentives must be widely available to
program participants. All employers who have
incorporated outcome-based wellness programs
as part of their group health plan should
review the new regulations carefully to ensure
their programs are in compliance before the
regulations take effect.
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
Federal Contractors
The Office of Federal Contract Compliance
Programs (OFCCP) administers the federal
affirmative action requirements for government
contractors pursuant to Executive Order 11246.
The requirements for written affirmative action
plans apply to contractors or subcontractors with
annual federal contracts totaling $50,000 or more
and at least 50 employees. These contractors
and subcontractors must create and implement
affirmative action plans annually.
According to OFCCP Director Patricia Shiu, the
march toward equality has been a long and arduous
one, spanning over 150 years in the United States.
And while substantive steps have been made,
particularly over the last 50 years, there is still more
work to do and the nation must keep moving.
“We are committed to enforcing
our laws to keep the doors of
opportunity open for all workers
— even if we have to pry those
doors open from time to time.”
— OFCCP Director Patricia Shiu
“We are committed to enforcing our laws to keep
the doors of opportunity open for all workers
— even if we have to pry those doors open from
time to time,” said Director Shiu. “We believe
businesses that play by the rules shouldn’t
have to compete at a disadvantage against those
who don’t.”
In FY 2012, OFCCP conducted compliance
evaluations at a little more than 4,000 contractor
establishments, resolved 139 cases of employment
bias, recovered more than $11 million in financial
remedies for “victims of discrimination,” and
negotiated approximately 3,500 potential job offers
for qualified rejected applicants.
Final Rules Released to Improve
Employment of Veterans, People
with Disabilities
The Office of Federal Contract Compliance
Programs (OFCCP) recently announced two final
rules to improve the hiring and employment
of veterans and people with disabilities. The
regulations will have significant implications for
federal contractors and subcontractors. Expected
impacts include increased record-keeping
obligations and changes to applicant-tracking and
human resource information systems.
One rule updates requirements under the Vietnam
Era Veterans’ Readjustment Assistance Act of 1974
(VEVRAA). The other updates those under Section
503 of the Rehabilitation Act of 1973. For more
than 40 years these laws have required federal
contractors and subcontractors to affirmatively
recruit, hire, train and promote qualified veterans
and people with disabilities respectively.
“In a competitive job market, employers need
access to the best possible employees,” said
Secretary of Labor Thomas E. Perez. “These rules
make it easier for employers to tap into a large,
diverse pool of qualified candidates.” Added
Patricia A. Shiu, Director of the labor department’s
Office of Federal Contract Compliance
Programs (which is tasked to enforce both laws),
“Strengthening these regulations is an important
step toward reducing barriers to real opportunities
for veterans and individuals with disabilities.”
The VEVRAA rule provides contractors with a
quantifiable metric to measure their success in
recruiting and employing veterans. It requires
contractors to annually adopt a “benchmark”
based either on the national percentage of
veterans in the workforce (currently 8 percent),
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
17
“availability” data for affirmative action plan
utilization analyses and will replace the current
tabulations in use by federal contractors since
2005. Though it has been several months since the
data was released for use by the public, OFCCP
delayed setting a deadline for contractor use until
it could survey employers on the practicality of
implementing the new information.
or their own benchmark, based on the best
available data. The rule strengthens accountability
and record-keeping requirements, enabling
contractors to assess the effectiveness of their
recruitment efforts. To facilitate compliance,
it also clarifies job listing and subcontract
requirements.
The Section 503 rule introduces a hiring goal for
federal contractors and subcontractors - that 7
percent of each job group in their workforce be
qualified individuals with disabilities. The rule also
details specific actions contractors must take in
the areas of recruitment, training, record keeping
and policy dissemination — similar to those that
have long been required to promote workplace
equality for women and minorities.
January 1, 2014 is the Date for Required
Use of New Census Data
OFCCP has identified January 1, 2014, as the date
federal contractors will be required to start using
the most recently released EEO tabulation data in
development of their affirmative action plans. In
other words, all affirmative action plans updated
in 2013 can be done so using the existing 2000
EEO file.
Late last year, the Census Bureau released its
new equal employment opportunity tabulations
breaking down the U.S. labor force by sex, race,
and ethnicity, in searchable form by geographic
location and occupation. In addition to other
purposes, these tables serve as the source of
18 The Bureau announced that utilizing the ACS
data allows for a more-detailed picture of the
labor force and even allows for insight into
unemployment and citizenship status.
OFCCP urges an “individualized
assessment” that is “narrowly
tailored to the essential job
requirements and actual
circumstances under which the
jobs are performed.”
Contractors have until the end of 2013 to update
their data files with this new tabulation and begin
assessing the impact of the new comparator
population on the expected race and gender
make-up of their workforce.
Directive on Use of Arrest and
Conviction Records in Contractor’s
Employment Decisions
OFCCP will be carefully reviewing employer
consideration of candidate criminal history
information for systemic discrimination. OFCCP’s
Directive 306, “Complying with Nondiscrimination
Provisions: Criminal Record Restrictions and
Discrimination Based on Race and National
Origin,” issued on January 29, 2013, and effective
immediately, applies to all covered federal
contractors and subcontractors.
In the Directive, OFCCP adopts the Equal
Employment Opportunity Commission’s 2012
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
“Enforcement Guidance on the Consideration of
Arrest and Conviction Records in Employment
Decisions under Title VII of the Civil Rights Act of
1964,” which requires employers to conduct an
individualized assessment of the job-relatedness
of a conviction to the job to which the candidate
applied. OFCCP also adopted EEOC’s guidance that,
where disparate impact occurs, employers must
validate their criminal background check policies.
In support of the Directive, OFCCP cites
numerous statistics reflecting that minorities
are disproportionately disqualified by criminal
background checks. For example, OFCCP
indicates African-Americans make up about
13 percent of the country’s population, but
constitute 40 percent of the currently incarcerated
population. The Directive also reports that 1 in
15 African-American men and 1 in 36 Hispanic
men, as compared to 1 in 106 White men, are
incarcerated during their lifetime.
To avoid unnecessary exposure, OFCCP
recommends contractors adhere to EEOC’s
recommended “best practice” of refraining
from inquiring about criminal history on job
applications. Where such information is
requested, OFCCP urges an “individualized
assessment” that is “narrowly tailored to
the essential job requirements and actual
circumstances under which the jobs are
performed.” Such consideration should include
(1) the nature or gravity of the offense or conduct;
(2) the time elapsed since the offense, conviction,
and/or completion of the sentence; and (3) the
nature of the job sought or held.
of discrimination (either based on findings
from a regression analysis or based on any
other aggregate statistical measure such as
mean differences), or (b) the case addresses
an identified practice applicable to multiple
employees that results in pay discrimination
(such as a practice of steering employees who
are members of a protected class toward lower
paying jobs at hire). There is no specific numeric
threshold used to define a systemic case.
In its 2014 Budget Justification Document, the
OFCCP also confirms its intent to implement
an enterprise-wide investigative process (as
opposed to focusing on individual establishments).
OFCCP states that focusing on identifying
issues across multiple facilities will ensure that
corporate-wide changes in personnel practices
are implemented, when necessary, throughout
the contractor’s entire corporate structure, and
not just within the facility that is the subject of
the initial OFCCP investigation. With this admitted
shift in focus, employers need to be mindful of
their enterprise-wide practices (employment
testing, compensation practices, use of criminal
background checks) and the potential compliance
pitfalls associated with these practices.
OFCCP Rescinds Compensation Standards
and Will Develop New Case-by-Case
Investigative Approach
In an effort to provide the OFCCP and its
compliance officers “more flexibility” in the review
of employer pay practices, it has announced
2014 Budget Justification Document
Gives Insight into Agency’s Priorities
OFCCP has issued its Budget Justification
Document for fiscal year 2014. As part of
this document, OFCCP shared the details of
how it will define a “systemic discrimination”
case. Specifically, OFCCP defines systemic
discrimination as a case meeting one of two:
(a) the case addresses a measurable pattern
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
19
that it has taken off the books the compensation
standards by which it determines whether covered
contractors have engaged in prohibited pay
discrimination. The OFCCP noted on February
26, 2013, that it will officially rescind the 2006
Compensation Standards, effective February
28, 2013. This move has been long-awaited by
the contractor community — OFCCP initially
announced its intent to rescind these standards
in January 2011. The agency simultaneously
released Directive 307, which sets out the
process for compensation reviews going
forward. The Notice of Rescission and the
supporting Directive are a “game changer” for
the contractor community.
The 2006 Compensation Standards established
the analytical framework for the agency when
reviewing contractor compliance with pay equity
requirements and prior to issuing a Notice of
Violation. In her statement on the rescission,
OFCCP Director, Pat Shiu, categorized the
Standards as “arbitrary restrictions” that
prevented the agency from “effectively protecting
workers from illegal pay discrimination.” The
Notice of Final Rescission states the Standards
“do not favor aggregation” and “make it more
difficult for OFCCP to test for larger patterns
across groups of jobs.”
• Determining the most appropriate and
effective approach from a range of
investigative and analytical tools;
• Considering all employment practices that
may lead to compensation discrimination;
• Developing appropriate pay analysis groups;
• Investigating large systemic, smaller unit and
individual discrimination; and
OFCCP stated it does not intend to replace
the Standards with any formal rule. Instead, it
will rely on “subregulatory materials,” such as
compliance manuals, directives and training to
inform contractors (and compliance officers)
on processes governing pay investigations
going forward. To that end, the Notice of Final
Rescission sets forth the agency’s intended
process for review of compensation during
compliance evaluations scheduled on or after
February 28, 2013. The OFCCP has already put
into place a Directive that sets out the process for
compensation reviews going forward.
OFCCP states its approach to investigating and
enforcing nondiscrimination with respect to pay
will “follow Title VII principles.” Based on this, it
20
commits to developing a “case-by-case” approach
to investigating pay and sets forth “five principles”
compliance officers will consider when reviewing
contractor pay. These five factors are:
• Reviewing and testing factors before including
them in analysis.
Most notably, the OFCCP states that it will begin
its analyses by testing large groups of employees
that may be based on groups larger than job title
and job groups. This means that OFCCP will “start
big” and aggregate contractor data to analyze the
largest groups of employees possible.
OFCCP says it believes the increased flexibility
“does not necessarily lead to greater inconsistency”
and has “committed to ensuring that it does
not.” However, the agency reiterated extensively
throughout the Notice of Rescission that, going
forward, the OFCCP will take a “case-by-case”
approach to its pay investigations.
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
Signs Point to Continued Focus on Pay
Discrimination
On June 10, 2013, the Equal Pay Act turned 50.
President Obama commemorated this historic
anniversary with public remarks at the White
House in which he urged continuing pay equality
efforts. Occupying a place of prominence, and an
act likely intended to highlight the agency’s efforts
towards pay discrimination, OFCCP Director Shiu
stood behind the President during the ceremony.
Additional events marking the day included The
National Equal Pay Task Force’s issuance of
a report, “Fifty Years After the Equal Pay Act:
Assessing the Past, Taking Stock of the Future,”
that links the OFCCP’s enforcement of EO 11246
to EPA progress. The 45-page Report references
OFCCP more than 30 times, discusses at least five
specific OFCCP settlements, and highlights the
“strengthening collaboration” between the OFCCP
and EEOC.
Director Shiu’s VIP status during President
Obama’s remarks and the emphasis on OFCCP
in the Task Force’s report are interesting, given
the fact OFCCP does not enforce the EPA. The
OFCCP also observed the EPA’s birthday with
a blog post by OFCCP Senior Program Advisor
Pamela Coukos, entitled, “50 Down, 50 to
Go? Myth Busting the Pay Gap Revisited.” Ms.
Coukos reinforces OFCCP’s belief that the pace
of progress toward eliminating the wage gap is
unsatisfactory and that the agency does not plan
to “just sit back and wait five more decades” for it
to close entirely.
Ms. Coukos’ remarks do not come as a surprise,
given OFCCP’s recent rescission of the 2006
compensation guidelines and issuance of Directive
307 as well as the other events of the week that
serve to further emphasize OFCCP’s continued
aggressive search for pay discrimination.
OFCCP Continues Commitment to
Developing A Cloud-Based System
to access the same information about federal
contractors. In its 2014 Budget Justification
Document, the OFCCP said it will implement
a cloud-based system in FY 2014 — enabling
the agency to improve process standardization,
reporting functionality, and overall productivity of
employees. OFCCP reports the new technology
will allow the agency to realize savings, beginning
in FY 2015 and 2016, in the amount of $39,000,000
over a period of 7 years. This initiative will also
theoretically allow OFCCP to pursue enterprisewide and system discrimination investigations, by
facilitating coordinated compliance efforts, and
identification of potential issues with companywide policies and practices for contractors with
multiple locations.
No Executive Order to Ban LGBT
Discrimination by Federal Contractors
Despite reports that the Obama Administration
has considered expanding Executive Order 11246
— which currently covers race, color, sex, religion,
and national origin — to include sexual orientation
and gender identity, White House Press Secretary,
Jay Carney, confirmed on July 10, 2013, that no
such order is forthcoming and reiterated his earlier
statements that the President prefers legislative,
rather than executive, action on this front.
New Procedures for Conducting
Compliance Evaluations
Claiming that its previous Active Case
Management (ACM) method for conducting
compliance evaluations was only “of limited
utility,” the OFCCP has rescinded ACM and
instituted a new system. The new Active Case
Enforcement (ACE) system is intended to allow the
agency to “more effectively utilize its resources
and strengthen its enforcement efforts” by:
• Lowering the thresholds for an “indicator” of
discrimination, prompting in-depth review;
• Expanding the definition of what constitutes an
indicator of discrimination;
OFCCP is developing a cloud-based system that
will allow agency offices across the country
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
21
• Planning to assess contractor compliance for
the three years preceding an evaluation;
• Expanding enforcement tools available to the
agency when conducting evaluations;
• Compliance Review – A comprehensive review
of all components of a contractor’s AAP. In
addition to the desk audit, the review may
include an on-site review and off-site analysis.
• Requiring compliance officers to conduct full
desk audits in every review; and
• Requiring an on-site audit requirement in at
least every 25th evaluation scheduled.
Under the old ACM, OFCCP focused on identifying
cases of class-based discrimination that may
have affected at least 10 individuals. Under
ACE, however, OFCCP removes the affectedclass-member threshold, saying indicators of
discrimination may be of an individual or class
nature. OFCCP defines “class” as “two or more
victims.” The agency has much to choose from in
finding an indicator of discrimination or violation.
It may include statistical evidence, anecdotal
evidence, patterns of individual discrimination,
patterns of systemic discrimination, patterns of
major technical violations, and indicators of noncompliance with non-EEO (equal employment
opportunity) labor and employment laws enforced
by other federal agencies (e.g., Department of
Labor’s Wage and Hour Division, Occupational
Safety and Health Administration, and Equal
Employment Opportunity Commission).
All ACE compliance evaluations will begin with
a full desk audit, regardless of the enforcement
method used thereafter. A full desk audit is
a comprehensive analysis of a contractor’s
affirmative action plan (AAP) prepared pursuant to
Executive Order 11246, Rehabilitation Act and the
Vietnam-Era Veterans Readjustment Assistance
Act and supporting documentation.
As with the old ACM, the ACE audit will include a
full evaluation of a contractor’s selection decisions
(i.e., hires, promotions, and terminations),
compensation, and other more programmatic
aspects of a contractor’s AAP (e.g., goal-setting
and outreach efforts).
22 Following the full desk audit, OFCCP will
consider initiating one of the following review
methodologies:
• Compliance Check – An abbreviated review
of a contractor’s record-keeping practices
to ensure compliance with affirmative action
regulations. A compliance check may be
followed by a more expansive evaluation, as
appropriate.
• Focused Review – An on-site review that
focuses on one or more components of a
contractor’s employment organization or
practices.
• Off-site Review of Records – As the name
suggests, the review will involve OFCCP’s
receipt and review of documentation, related
to a contractor’s employment processes, to
ensure compliance with affirmative action
regulations.
On a positive note for contractors, OFCCP reemphasizes that, if during the desk audit of a
contractor’s AAP, the compliance officer identifies
no violations or only minor technical violations,
the compliance officer should seek to close the
review at the desk-audit stage.
Under ACE, OFCCP will select every 25th
compliance evaluation for an automatic full
compliance review, regardless of whether any
problematic employment processes are identified.
A full compliance review will consist of all three
stages of a compliance review — desk audit, onsite review, and off-site analysis, when necessary.
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
Conclusion
Change continues at a rapid pace. With constant changes in policy and regulations by federal
agencies, it is difficult to keep up with all of the new rules, determine how they affect you, and stay in
compliance. ADP TotalSource® is well versed in regulatory developments and stays on top of new rules
that may affect your business. ADP TotalSource updates clients about new developments of significance
and offers clear action plans that can help its clients focus on their business objectives.
About ADP TotalSource
®
A part of ADP’s Employer Services Division, ADP TotalSource provides employers with a
comprehensive human resource outsourcing solution that helps reduce the costs and complexities
related to employment and HR management. For companies and HR departments that seek to
return the focus to their core processes, ADP TotalSource removes administrative and regulatory
burdens, allowing more effort to be expended on strategic initiatives. Our affordable outsourcing
opportunities have the ability to significantly reduce operating costs and streamline business
operations, paving the way for growth and competitive gains. To learn more about how ADP
TotalSource can help your business call 1-800-HIRE-ADP (1-800-447-3237) or visit us online at
www.adptotalsource.com.
About Jackson Lewis
Jackson Lewis is a strategic alliance partner with ADP TotalSource. For more than 50 years,
Jackson Lewis has placed a high premium on preventive strategies and positive solutions
in the practice of workplace law. With over 750 attorneys practicing in 53 offices nationwide,
Jackson Lewis has a national perspective and sensitivity to the nuances of regional business
environments. www.jacksonlewis.com.
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
23
Notes
24
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
Notes
Employment Regulatory and Enforcement Activity Is Already Underway. Are You Ready?
25
HR. Payroll. Benefits.
This material is subject to change and is provided for informational
purposes only and nothing contained herein should be taken as legal
opinion, legal advice or a comprehensive compliance review.
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