On February 13, 2019, the US Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) issued Directive 2019-04. This Directive creates the Voluntary Enterprise-wide Review Program (VERP). The concept is to provide “high performing” contractors with a voluntary compliance program. This removes those contractors from OFCCP’s normal establishment-based compliance evaluations process for up to 5 years. Employers will be able to apply for the program later this year. The application will include a compliance review of the contractor’s headquarters location, and some of its establishments. While the framework is out, the program is still in development, so the specifics are not clear. Thus, I suppose I’m really not saying much here that you may not already know…but stay tuned. I’ll provide more details as they become available!
This update is short and sweet. On August 28, 2018, the U.S. Department of Labor’s (DOL) Office of Federal Contract Compliance Programs (OFCCP) launched a new web page titled “Contracting Officer Corner“. The OFCCP’s new web page is designed to be a one-stop shopping, if you will, for federal contractors. It includes a new Pre-Award Process Guide, links to the Pre-Award Registry, Notification, Federal Acquisition Regulations, debarred contractors search, regional office staff contacts, and downloadable EEO workplace posters. That’s it!
For those of you who are federal contractors, and have had the pleasure of being audited by the U.D. Department of Labor’s (DOL) Office of Federal Contract Compliance Programs (OFCCP), you know how close to the vest the OFCCP has historically kept their formulas, pay analysis groupings theories, and statistical modeling theories/backup, making early settlement frustrating if not impossible. Effective August 24, 2018, the DOL issued a new directive, DIR 2018-05, that outlines their procedures for conducting their compliance evaluation (audit) with the priority of eliminating pay discrimination. I am encouraged by this directive, insofar as the OFCCP appears to be taking measures to improve transparency and working more on correcting true pay disparities versus paying a game of “gotcha”.
DIR 2018-05 notably nods to this history, stating that upon review “OFCCP is concerned that contractors lack the clear guidance Directive 307  intended to give”. The OFCCP hopes the new directive will allow federal contractors to better conduct meaningful self-audits to proactively identify and address any pay disparity issues. I’d bore you all to death if I set forth a summary of the directive, but wanted to at least point out what the directive contains (the link to DIR 2018-15 is above).
The directive explains how it uses statistical and other evidence to evaluate pay practices, as well as data requests via a Scheduling Letter, which is used to request data such as the employers Affirmative Action Program (AAP). The directive further notes how it determines its similarly-situated analysis groupings by developing pay analysis groupings (PAGs) that mirror a contractor’s compensation system (this has been a fight for contractors in the past). Finally, the directive discusses how the OFCCP applies statistical methodology and modeling in a desk audit and during the compliance evaluation, which control variables are used and how, and how it will facilitate transparency, consistency, and resolution through conciliation.
As I wrote about in April, on February 1, 2016, the EEOC proposed revisions to add wage and hour information to employers’ yearly EEO-1 report. The EEO-1 report is required by the EEOC, pursuant to its authority in Title VII of the Civil Rights Act of 1964 (Title VII), and requests submission of information aimed at detecting discriminatory practices.
The proposed revision is the recommendation of a 2010 Equal Pay Task Force between the EEOC, DOL and President Obama’s National Equal Pay Task Force. The EEO-1 survey is used by the EEOC and the OFCCP (Office of Federal Contract Compliance Programs) to analyze and enforce non-discriminatory employment (such as a contractor who hires no minorities). According to the EEOC, this information will enable it to compute and compare pay between men/women and various races and ethnicity to find potential discriminatory pay practices.
Following the closing of the April 1 comment period, the EEOC has since revised its proposal, as summarized below. The comment period for the new revisions closes August 15, 2016.
Who Needs To Complete An EEO-1 Report?
The EE0-1 survey must be filled out by all employers subject to Title VII with 100 or more employees (this includes corporate enterprises and/or shared ownership) and federal contractors / first-tier subcontractors subject to Executive Order 11246 (government contract over $10,000) with 50 or more employees and a prime contract or first-tier subcontract of $50,000 or more. Employers with 50-99 employees would not need to report this new additional pay and hours worked data (now called “Component 2” of the EEO-1) , just the current information such as race, gender, etc. (“Component 1”).
The proposal would change effective the 2017 reporting cycle for employers with 100 or more employees – they would need to add the pay and related information by March 31, 2018. Note- this is a 6 month extension from September 2017 (which was originally proposed). Thereafter, the EEO-1 report will be due by March 31st of each subsequent year. Keep in mind, however, the September 30, 2016 deadline and EEO-1 reporting is unchanged! According, employers would report September 30, 2016 with the old form, and the next report would be due March 31, 2018, with the new data/form. A sample of the proposed new EEO-1 report can be found here.
What New Data Must Be Reported?
The proposal would require covered employers to provide data on employees’ W-2 earnings and hours worked based on a calendar year basis ending December 31. This is a significant (positive) change over the EEOC’s first proposal. Employers would use the W-2 Box 1 income figure used for end-of-year tax reporting. Thereafter, employers will need to aggregate W-2 data in 12 “pay bands” (pay range, for the rest of us) for 10 different job categories: Executive/Senior Level Officials and Managers; First/Mid-Level Officials and Managers; Professionals; Technicians; Sales Workers; Administrative Support Workers; Craft Workers; Operatives; Laborers and Helpers; and Service Workers).
As for how to report the “hours worked” component for full-time salaried employees, the EEOC now is recommending that for non-exempt employees, actual hours be reported. For exempt (salaried) employees, an employer would have the option of: (1) reporting actual hours worked; or (2) report 40 hours per week for full-time employees and 20 hours per week for part-time employees multiplied by the number of weeks the individual is employed during the EEO-1 reporting year.
In short, we hurry up and wait again…
Yesterday was “Equal Pay Day” – this is the day that the average pay for women catches up to the average pay for men from the preceding year alone. I had no idea until I received an EEOC email update proclaiming this to be true. For what it’s worth, apparently today is National Make Lunch Count Day, National Scrabble Day, National Peach Cobbler Day, National Thomas Jefferson Day and, my favorite, National Bookmobile Day. All worthy causes, to be certain. On to the EEOC’s latest administrative burden on employers.
EEOC Seeks Revisions to EEO-1 Survey.
On February 1, 2016, the EEOC proposed revisions to add wage and hour information to employers’ yearly EEO-1 report. This is old news, of course, but as the comment period closed on April 1, 2016, and the EEOC sent me the email of what’s on its radar, I thought it might not be bad to revisit what is likely coming down the pipeline. The EEO-1 report is required by the EEOC, pursuant to its authority in Title VII of the Civil Rights Act of 1964 (Title VII), and sets forth information aimed at detecting discriminatory practices. The proposed revision is the recommendation of a 2010 Equal Pay Task Force between the EEOC, DOL and the President’s National Equal Pay Task Force.
The EEO-1 survey is used by the EEOC and the OFCCP (Office of Federal Contract Compliance Programs) to analyze and enforce non-discriminatory employment (such as a contractor who hires no minorities). The EE0-1 survey must be filled out by all employers subject to Title VII with 100 or more employees (this includes corporate enterprises and/or shared ownership) and federal contractors / first-tier subcontractors subject to Executive Order 11246 (government contract over $10,000) with 50 or more employees and a prime contract or first-tier subcontract of $50,000 or more.
However, the EEOC has taken mercy – not all employers will have this additional pay and hours worked data burden (now called “Component 2” of the EEO-1). Continue Reading Happy (Belated) Equal Pay Day! EEOC’s Proposed Amendment to the EEO-1 – Requiring Pay Data