OFCCP Issues 1,000 CSALs, and New Compliance Evaluations Will Commence in 2018

Federal contractors should be watching their mailboxes. On February 1, OFCCP mailed 1,000 Corporate Scheduling Announcement Letters and will begin mailing the formal Scheduling Letters on March 19, 2018.

OFCCP also announced significant modifications to its audit selection protocols including a limit of 10 establishments of a single contractor being placed on the scheduling list as well as no more than four establishments of a single contractor being placed in a single district office.  Most significantly, OFCCP expanded the prior two-year audit grace period by now providing that no establishment with a review closed in the last five years will be placed on the scheduling list.

Contact your FortneyScott attorney for more information about how these changes may affect your company or contact FortneyScott for more information.

The full DOL announcement can be read HERE.

GAO Report Recommends Improvements in Federal Agencies? Oversight of Tech Industry

The Government Accounting Office (GAO) has issued
a report recommending improved oversight of the tech industry by EEOC and OFCCP
because of the lack of women and African American workers in the industry. The
GAO was asked to review the workforce trends in the technology sector and
oversight by the federal enforcement agencies.

The GAO reviewed trends in the gender, racial and
ethnic composition of the technology sector workforce and the oversight by EEOC
and OFCCP of tech companies’ compliance with equal employment and affirmative
action requirements. After analyzing the workforce data from the American
Community Survey for 2005-2015; EEOC EEO-1 Reports for 2007-2015; and OFCCP data
on compliance reviews for FY2011 to 2016; and interviewing agency
officials, researchers and workforce, industry and company representatives, the
GAO found that while the percentage of minority technology workers increased
between 2005-2015, there was no growth for women or African Americans.   Hispanic and Asian workers, however, made significant gains.  Women, African Americans and Hispanics make
up a smaller percentage in the technology workforce-math, computing and
engineering-as compared to their representation in the general workforce while
Asians have a higher percentage in the technology workforce than in the general
workforce.

The GAO also found that although EEOC and OFCCP have
taken steps to enforce equal employment and affirmative action requirements,
both face limitations. The EEOC is limited by its complaint based focus and the
lack of industry based data. The OFCCP’s regulations and its
establishment-based limit its ability to hold contractors responsible for
compliance.

In response to these concerns, the GAO made 6
recommendations:

  • The
    Chair of the EEOC should develop a timeline to complete planned efforts to
    clean IMS data for one-year period and add missing industry code data.
  • OFCCP
    should analyze its internal process data from closed evaluations to understand
    the causes of delays during compliance evaluations and change the process
    accordingly.
  • The
    OFCCP should require contractors to disaggregate demographic data for the
    purpose of setting placement goals in AAPs rather than setting single goals for
    all minorities.
  • OFCCP
    should assess the quality of the methods used by OFCCP to incorporate
    consideration of disparities by industry into its process for selecting
    contractor establishments for compliance evaluation.
  • OFCCP
    should evaluate its current approach used for identifying entities for
    compliance review and determine what modifications are needed to reflect current
    workplace structures and location or to ensure subcontractors are included.
  • The
    OFCCP should evaluate the Functional Affirmative Action Program to assess its
    usefulness as an effective alternative to an establishment-based program and
    determine what improvement could be made to better encourage contractor
    participation.

Fortney
Scott is reviewing this report in detail and determining what impact these
recommendations will make on the tech industry, EEOC and OFCCP. Please contact
your Fortney Scott attorney for more information.

DOL Requests Comments for Draft Strategic Plan


On
Tuesday, November 7, 2017, the U.S. Department of Labor (DOL) will publish  a request for
comments on its draft FY2018-2022 Strategic Plan in
the Federal Register.  The draft strategy plan
itself can be found here
or on the DOL website. The notice will open a period of 30 days in which
stakeholders can comment on the draft Strategic Plan. The notice states that
the draft Strategic Plan represents “the Secretary’s vision, the Department’s
mission, and a description of how component agencies will achieve supporting
goals and strategic objectives in the next four years.”


The draft strategic plan has a total of four goals.  The first strategic DOL goal-Support the
Ability of All Americans to Find Good Jobs-focuses on how to use DOL resources
to close the current skills gap such as apprenticeships and training as well as
how to increase the job opportunities for veterans and their spouses; for individuals
with disabilities and working women.
Interestingly, the Strategic Plan notes that the Bureau of Labor
Statistics (BLS) should provide timely, accurate and relevant information on
the labor market, working conditions and price changes.  BLS was attacked by President Trump during
the 2016 election for providing inaccurate data.

The second strategic goal-Safe Jobs and Fair Workplaces-outlines
the plans for each of the enforcement agencies under the DOL.  The common denominator for OSHA, MSHA, Wage
& Hour, OFCCP, ILAB and OLMS is increased focus on compliance assistance to
employers.  The Wage and Hour Division
specifically indicates it is planning to modernize its compliance assistance,
while the OFCCP states that it will expand its compliance assistance and
stakeholder engagement.

The third strategic goal-Promote Strong Workers’
Compensation and Benefits Programs-covers the DOL’s agencies that handle
workers’ compensation, unemployment compensation, and retirement security.

The DOL’s Management Goal has the usual discussion of
working more effectively, more efficiently and with more accountability.  More to the point, however, is the DOL’s goal
to upgrade its technology capability which would increase its ability to work
smarter with fewer employees.

Surprisingly, the Strategic Plan does not mention how it
will comply with the OMB initiative to restructure the federal government to
reduce the size of the civilian workforce and eliminate unnecessary programs
although the strategic plan although the plan indicates that reform plan
initiatives will be inserted in the December revised draft.

FortneyScott is planning on preparing comments. If you are
interested in participating, please contact David S. Fortney.

Mickey Silberman, Esq. joins FortneyScott

Nationally acclaimed
employment attorney Mickey Silberman has joined Fortney & Scott, LLC as a Shareholder
and Chair of the firm’s Affirmative Action & Pay Equity Practice Group. Mr.
Silberman has extensive experience in counseling and advising employers and
federal contractors in all areas of employment law, with nationally
recognized expertise in pay equity, OFCCP compliance and audit defense,
affirmative action and EEO, and diversity and inclusion.


In
announcing that Mr. Silberman has joined FortneyScott, David Fortney, co-founding
shareholder of FortneyScott, stated: “We are delighted that Mickey has joined
FortneyScott.  Mickey is an expert in the areas of pay equity and systemic
pay discrimination.  He has extensive
experience in advising clients in conducting pay equity analyses both
proactively and in response to OFCCP and EEOC pay investigations and private
pay litigation. We are pleased to be able to enhance our current client
services with the significant expertise and experience that Mickey brings to
our firm and that our clients value.”

Jacqueline
Scott of FortneyScott noted, “Mickey builds on and expands our abilities to
assist clients in understanding and complying with the ever-increasing number
of new state and municipal fair pay laws and compensation enforcement
initiatives, laws, regulations, and Executive Orders imposed by the federal
government. We are very excited to have him as part of the FortneyScott
team.”

Mr. Silberman said, “It is an honor
to join a law firm with such an impressive reputation for delivering
sophisticated and strategic legal advice and service excellence to clients
throughout the country. I look forward to working closely with David, Jacqueline
and the superb FortneyScott team to provide our clients with creative and
strategic advice and counsel in the dynamic and changing areas of pay equity,
OFCCP compliance and diversity and inclusion.”

Mr. Silberman also adds significant
expertise for federal contractors, having overseen the annual preparation of
thousands of affirmative action plans for government contractors across the
country in all industries. He also has directed the defense of hundreds of
OFCCP audits.
As a result of his extensive
practice, Mr. Silberman is on the “cutting edge” of OFCCP’s rapidly evolving
enforcement trends.

Mr. Silberman also is the Co-chair of the Institute for
Workplace Equality, a national, nonprofit employer association. Through his
role with the Institute, he meets with OFCCP, EEOC and other federal agency
national leadership to present the employer community’s perspective on proposed
laws and regulations and agency enforcement trends.

Additionally,
for many years, Mr. Silberman served as General Counsel and on the Executive
Committee for the National Industry Liaison Group and has been a leader in the NILG’s
programs throughout the country.

Mr. Silberman has been recognized by Chambers USA from
2014 to present as a leading Labor & Employment attorney in Colorado. Immediately
prior to joining the FortneyScott, Mr. Silberman had a distinguished career
with a national employment law firm. 

 

BREAKING: EEO-1 Report Component 2 (Pay and Hours Data) Suspended Indefinitely

On August 29, the Office of Information and Regulatory
Affairs (“OIRA”), a division of the Office of Management and Budget (“OMB”), suspended
“Component 2” of the revised EEO-1 Report.
“Component 2” would have required employers with over 100 employees to
submit W-2 compensation and FLSA hours worked information.

While this action by OIRA does not “kill” the Component 2
completely, it does relieve employers of their obligation to file W-2 and hours
worked data by the March 31, 2018 deadline.
Employers now do not need to undertake system changes that may have been
required for these pending reporting obligations.

EEOC will be publishing additional guidance in the Federal
Register, and Fortney Scott will report on these subsequent developments.

DOL Increases SCA Health and Welfare Benefit Level

Effective August 1, 2017, the prevailing health and welfare fringe benefits rate under the McNamara-O?Hara Service Contract Act (the ?SCA?) has been increased to $4.41 per hour?a bump up from the previous rate of $4.27 per hour. The new rate was announced on July 25, 2017 in the Department of Labor?s (the ?DOL?s?) All Agency Memorandum 225 (?AAM 225?).

Notably, AAM 225 also introduces a special reduced health and welfare fringe benefit rate of $4.13 per hour for employees performing on contracts covered by Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors (?Paid Sick Leave EO?).  The revised levels announced in AAM 225 should be recognized and implemented for new contracts and modifications on and after August 1, 2017.

Interplay of Prevailing Benefit Rate and Paid Sick Leave EO Obligations

As a reminder, the Paid Sick Leave EO?which became effective for contracts entered into after January 1, 2017, or contracts modified after the effective date?requires certain federal contractors to provide up to 56 hours of paid sick leave annually.  Because employer contributions made to satisfy the Paid Sick Leave EO?s requirements cannot be credited toward the employer?s SCA fringe benefit obligation, the reduced rate of $4.13 was specifically created to reduce the financial burden on contractors by ?exclud[ing] the sick leave portion of the calculated health and welfare rate.?

The High and Low Rate Calculation

The DOL has historically maintained two separate fringe benefit rates: a ?low? employee-by-employee rate and a ?high? (average cost) rate.  Under AAM 225, the rates for each method are the same: $4.41 per hour.  While the rates have differed in the past, since 2004, the rate has been the same for both methods; only the method of calculation differs.

Impact on Hawaii WDs

In Hawaii, employers are typically required by law to provide healthcare coverage for employees.  Because the SCA does not allow contractors to claim credit towards fringe benefit obligations for fringe benefit payments required by law, Hawaii employers are faced with the unpleasant prospect of paying duplicate fringe benefits.

Accordingly, AAM 225 establishes a health and welfare benefit rate of $1.91 per hour for those employees for whom the contractor must provide healthcare benefits pursuant to Hawaii law.  Moreover, for employees performing on contracts covered by both Hawaii?s healthcare act and the Paid Sick Leave EO, the health and welfare benefit rate is further reduced to $1.63 per hour.

Conclusion

The reduced fringe benefit rate should help reduce the cost of compliance with the Paid Sick Leave EO and should be incorporated in contractors? compliance plans.

DOL Publishes RFI on the Overtime Regulations

On July 26, the Department of Labor (DOL) will publish a Request for Information (RFI) on “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees” for the Overtime Regulations.  The DOL requests comments

on
questions related to the salary level test, the duties test, inclusion of
non-discretionary bonuses and incentive payments to satisfy a portion of the
salary level, the salary test for highly compensated employees, and automatic
updating of the salary level tests.  The deadline to submit comments is September 25, 2017.

Google Decision and Federal Contractors? Obligations to Provide Data to OFCCP

Overview:      In a significant ruling addressing what
additional information federal contractors must provide following the initial
response to an OFCCP desk audit, a U.S. Department of Labor Administrative Law
Judge ruled that there are significant
limits on what OFCCP can demand.  In OFCCP v. Google, the judge rejected most
of OFCCP’s expansive multi-year data requests, and ruled instead that personnel
data for only a second year, with protections for employees’ privacy, must be
provided.  The Google decision should be carefully reviewed by all federal
contractors facing an OFCCP compliance evaluation to understand the limits on the
Agency’s authority to request supplemental data and information.  While the decision significantly reduced the
data Google has to provide to OFCCP and was highly critical of OFCCP’s audit,
the ruling should not be viewed as a complete win for federal contractors.

Background  The U.S .Department of Labor Administrative
Law Judge (“ALJ”) Steven B. Berlin issued his delayed decision in OFCCP v. Google addressing OFCCP’s
authority to collect additional data and information during a compliance
evaluation on July 14, 2017.

OFCCP’s extensive data requests:     In response to the initial Scheduling
Letter, Google provided OFCCP its “snapshot” of employees as of September 1,
2015, which included all the compensation data required by Item 19.  Subsequently, OFCCP requested Google supplement
the snapshot with extensive information about the compensation and hiring
programs and records and related data, and Google complied.  Google also produced employees’ ID, country
of citizenship, secondary country of citizenship, visa, and place of birth.

OFCCP then demanded that Google provide additional
data for a second year for each employee employed by Google at its headquarters
extensive, as well as complete salary history covering multiple years and
personal contact information for up to 25,000 employees.

When Google refused to provide the data, OFCCP filed
this action alleging the company failed to provide it with access.

The ALJ criticized OFCCP:   The
ALJ’s 40-page decision concluded that OFCCP didn’t understand and has “not
taken sufficient steps to learn” about Google’s workforce practices, that it
was motivated by “an animus that is difficult to understand” and that a key
witness from the OFCCP was “evasive” on the witness stand.  The ALJ further found the OFCCP’s public
attacks on Google’s work practices were based on “little more than speculation;”
that it had a reckless disregard for Google employees’ privacy; and that its
overbroad data requests comprised a “willy nilly search everywhere and
anywhere.”  All of this while noting that
OFCCP was auditing a company, Google, who had been “co-operative”.

What data Google must provide:       The ALJ significantly limited the breadth
of OFCCP’s requests, and ruled that Google must provide OFCCP with the
September 1, 2014 snapshot data required by Item 19.  In addition, he determined that Google should
include in the snapshot, employees’ year of birth as well as all of the additional
data requested, other than data related to starting salary.  The ruling also applied a low threshold for
OFCCP justifying its expanded requests for contractor data, and did not require
OFCCP to disclose its “indicators” or justifications.

Although the ALJ rejected OFCCP’s demand for
personal contact information for more than 25,000 employees, he held that Google
must provide personal data for 5,000 Google employees despite the ALJ’s stated
concerns about OFCCP’s ability to protect information.  For these employees selected by OFCCP from the
two “snapshots,” Google is to provide the agency with the employees’ name, and
the personal address, telephone
number, and email address to the extent Google had such information.  OFCCP can subsequently request the same personal
information for an additional 3,000 employees.

Portions of OFCCP’s requests were denied: The ALJ rejected OFCCP’s request for complete salary and job histories of
Google employees, e.g., for the
entire period of employment for each employee, but stated that OFCCP could
renew its request for the additional data if the Agency can show that its
request is reasonable.  The ALJ also
required that OFCCP engage with Google in “meaningful, good faith conciliation
to resolve any dispute, including by showing why the information sought is
reasonable, relevant, focused, and not unduly burdensome.”

Impact for future OFCCP reviews:    Based on this decision, contractors may have
limited ability to refuse to provide OFCCP with data for a two-year period
prior to the desk audit letter that the agency claims is relevant, unless the
contractor can show the data is unreasonable, irrelevant, unfocused, or unduly
burdensome and that OFCCP is refusing to conciliate on the data requested.

For more information
on the impact of this decision contact your Fortney Scott attorney.

Trump FY2018 Budget Slashes DOL, Merges OFCCP with EEOC, and Offers Paid Family Leave

The Trump Administration’s FY2018 budget proposes reducing the Labor
Department’s appropriation by $2.4 billion for FY2018 from $12.1 billion to
$9.7 billion-a 20 percent reduction with cuts coming mostly from workforce
training programs.


Budget would
merge OFCCP into EEOC

After months of speculation, the FY2018 budget
confirms that the Administration proposes to merge OFCCP into the EEOC by the
end of FY2018:

The 2018 Budget proposes merging OFCCP into the Equal Employment Opportunity Commission (EEOC), creating one agency to combat employment
discrimination. OFCCP and EEOC will work collaboratively to coordinate this transition to the EEOC by the end of FY 2018. This builds on the existing
tradition of operational coordination between the two agencies. The transition
of OFCCP and integration of these two agencies will reduce operational
redundancies, promote efficiencies, improve services to citizens, and strengthen
civil rights enforcement.

In addition, the budget would reduce OFCCP’s budget
by 16 percent–from $105 million in FY2017 to $88 million in FY2018.

Budget’s impact on other
enforcement agencies

As to other enforcement
agencies, the Equal Employment Opportunity Commission (EEOC) would receive
$363.8 million FY2018 under the budget, representing a modest reduction of $700,000
from FY2017. Although
the target of strong criticism, the National Labor Relations Board (NLRB) received
a budget cut of only about 6 percent from $274 million to $258 million.  The Wage and Hour Division’s spending will
remain basically unchanged, which may
indicate an intent to shelve the
still-pending overtime rules.

Budget
proposes paid family leave

Finally,
the proposed FY2018 budget provides over $18 billion in additional funding to the
Labor Department’s unemployment insurance program for paid parental leave.  The proposal envisions a federal-and-state paid
parental leave program beginning in 2020.  The program would provide six weeks of paid
leave to new birth and adoptive parents.
Like the Administration’s Medicaid proposal, states would be given
significant discretion in determining the final structure of the leave program.

Takeaways

The
budget is the most tangible expression of the effort to reduce the size and
reach of the federal government.
However, Congressional leaders’ response to President Trump’s budget is
that it is “dead on arrival.”  It is also
important to note that both employer groups and civil rights advocates have
raised serious objections the budget’s merger of OFCCP and EEOC.  In fact, The
Institute for Workplace Equality (The Institute), of which David Fortney is a co-chair, submitted a letter to Secretary Acosta and OMB Director Mulvaney strongly objecting to the proposal.  If
you have additional questions about the impact of President Trump’s budget,
please contact your FortneyScott counsel.

Trump Issues Executive Order to Strengthen Cybersecurity and Critical Infrastructure

On
May 11, 2017, President Trump issued an Executive Order on “Strengthening the
Cybersecurity of Federal Networks and Critical Infrastructure” (“EO”).  The EO makes Executive Branch agency heads
responsible for ensuring the cybersecurity of their systems and
information.  It also directs these agencies
to report, plan and budget for improvements to the cybersecurity of their Federal
systems in order to adequately protect “the executive branch enterprise.”  The EO calls for agencies to apply the National
Institute of Standards and Technology (“NIST”) Framework for Improving Critical
Infrastructure Cybersecurity (the “Framework”) in developing reports that ultimately
will be used to determine an Executive Branch cybersecurity plan.  The Framework to be used by these agencies is
the same one that has been in place since 2014 as voluntary guidance to
businesses on the development of a risk-based approach for addressing and managing
cybersecurity risks.  Notably, the EO
calls for the Executive Branch’s development and transition to a “modern,
secure, and more resilient executive branch IT [Information Technology] architecture,”
with a preference to procure shared IT services, including email, cloud and
cybersecurity services.

The EO also calls for agencies to support the cybersecurity of
U.S. critical infrastructure, which is defined to include critical physical and
information infrastructures and networks in telecommunications, energy,
financial services, water, and transportation sectors.  The EO also seeks to identify the
cybersecurity risks facing the Department of Defense (“DoD”) and the defense
industry base, including its supply chain, and to address the threats posed by
botnets and other automated, distributed cyber attacks.

Takeaways:

  • Cybersecurity remains a critical concern for
    this administration. We should expect
    that additional guidance and likely increased requirements will be issued to implement
    better and more comprehensive cybersecurity in government and with regard to those
    involved in national security, or other activities critical to the
    accomplishment of the government’s missions.
  • Given the President’s expressed intent to update
    Executive Branch IT systems and services, it is likely that an Agency’s plans
    to address cybersecurity needs will be factored into that Agency’s, and
    ultimately, the President’s Executive Branch-wide, strategic, operational and
    budgetary planning processes moving forward for FY 18 and beyond.
  • As a government contractor, you should be
    checking your systems to ensure compliance with the cybersecurity requirements
    in your current contracts and subcontracts, and moving forward to ensure your
    competitive status in future procurements.
  • Cybersecurity is likely to create opportunities
    for those with the best cybersecurity products, services and capabilities in
    the coming months and years.

If you have questions about the Executive Order or the
requirements of current cybersecurity provisions, contact Susan Warshaw Ebner,
or your FortneyScott counsel.