OFCCP Updates Sex Discrimination Rule

On June 14, 2016, the Office of Federal Contract Compliance Programs announced publication of a Final Rule in the Federal Register that sets forth the requirements that covered contractors must meet under the provisions of Executive Order 11246 prohibiting sex discrimination in employment. This Final Rule updates sex discrimination guidelines from 1970 with new regulations that align with current law and address the realities of today’s workplaces. The Final Rule deals with a variety of sex–based barriers to equal employment and fair pay, including compensation discrimination, sexual harassment, hostile work environments, failure to provide workplace accommodations for pregnant workers, and gender identity and family caregiving discrimination.

The Final Rule became effective on August 15, 2016.

Read the Fact Sheet

OFCCP Final Rule Promotes Pay Transparency

OFCCP Protects Workers from Discrimination Based on Compensation Inquiries, Discussions, or Disclosures

Effective January 11, 2016, Executive Order 13665 amends Executive Order 11246; covered federal contractors and subcontractors are now prohibited from discriminating against employees and applicants who choose to inquire about, discuss, or disclose their own compensation or the compensation of another employee or applicant (barring few exceptions).

Additionally, this new rule encourages pay transparency, so workers have a way to potentially discover violations of equal pay laws and can seek appropriate remedies.

The Final Rule to promote Pay Transparency includes the following:

• Defines key terms such as compensation (to include salary, wages, overtime pay, shift differentials, bonuses, commissions, vacation and holiday pay, allowances, insurance and other benefits, stock options and awards, profit sharing, and retirement), compensation information, and essential job functions as used in Executive Order 11246, as amended;

• Provides employers with two defenses to an allegation of discrimination: 1) a general defense, which could be based on the enforcement of a "workplace rule" that does not prohibit the discussion of compensation information; and, 2) an "essential job functions" defense;

• Requires covered federal contractors/sub-contractors to incorporate a non-discrimination provision into existing employee manuals or handbooks, and to disseminate the nondiscrimination provision by either electronic posting or by posting a copy of the provision in conspicuous places available to employees and applicants for employment;

• Requires contractors to revise the Equal Opportunity Clause in covered federal contracts/sub-contracts and purchase orders of a single contract/order in excess of $10,000 entered into or modified on or after January 11, 2016, to include a provision that prohibits discharge or discrimination against employees or applicants who inquire about, discuss, or disclose their compensation or the compensation of other employees or applicants;

• Requires contractors to post a newly created supplement to the "EEO is the Law" poster along with the current "EEO is the Law" poster that reflects all of the recent regulatory changes. (This interim supplemental posting must be used until the EEOC revises the existing "EEO is the Law" poster to reflect the new provisions).

In response to these recent changes, the Equal Employment Opportunity (EEO) Policy Statement should now include pay transparency by reference as a protected basis. For compliance purposes, this EEO Policy Statement should be signed by your designee and posted in areas visible to employees and applicants.

THOMAS HOUSTON has made the necessary updates to the EEO Policy Statement included in the AAP(s) prepared for our clients.

For additional information and FAQs regarding the final rule to promote Pay Transparency, visit the OFCCP website at http://www.dol.gov/ofccp/PayTransparency.html.

OFCCP Announces a Final Rule to Promote Pay Transparency

In too many workplaces around the country, women and people of color don’t know what their counterparts are earning for the same work. A culture of secrecy prevents them from finding out if they are being discriminated against in time to act on it. Lilly Ledbetter learned, only after decades at her job, that she had been paid less than her male counterparts. Her company’s policy forbidding her from discussing pay with co-workers prevented her from getting the information she needed to bring a complaint in time. The Lilly Ledbetter Fair Pay Restoration Act, the first piece of legislation signed by President Obama in 2009, helped people like her more effectively challenge unequal pay. However, pay secrecy policies still stand in the way of the fundamental principle of equal pay for equal work. If one of Lilly Ledbetter’s co-workers had simply been able to tell her about the discrimination that was taking place, she would have been better able to act in time to exercise her workplace rights. Indeed, the ability of workers to share information and effectively organize for their rights is a cornerstone of building an economy that works for everyone. Promoting pay transparency by prohibiting pay secrecy policies helps make the federal contractor workforce more efficient. Pay transparency helps level the playing field for women and people of color, and provides employers access to a diverse pool of qualified talent.

We know that Lilly Ledbetter’s case was not unique. Despite the existence of laws protecting workers from gender-based compensation discrimination for more than five decades, a pay gap between men and women persists today. Assuming that she works every year between ages 25 and 65, the typical woman will have lost $420,000 over her working lifetime because of the earnings gap, based on median annual earnings for full-time, year-round workers at age 25 and above in 2013. In addition to a wage gap between men and women, the research reveals a wage gap amongst various racial groups. At the beginning of 2015, median weekly earnings for African-American men working at full-time jobs totaled $680 per week - only 76 percent of the median for white men, who earned $897 per week. The median weekly earnings for African-American women equaled $611 per week, or 68 percent of the median for white men. When employees and applicants are prohibited from inquiring about, disclosing, or discussing their compensation with other workers, compensation discrimination is much more difficult to discover and remediate, and more likely to persist.

That is why, in 2014, President Obama issued Executive Order 13665, promoting pay transparency and openness, making it possible for workers and job applicants to share information about their pay and compensation without fear of discrimination. On September 10, 2015, the Department of Labor issued a Final Rule implementing that order. This Final Rule takes effect on January 11, 2016, 120 days after its publication in the Federal Register, and amends the existing regulations that implement EO 11246.
 
The Final Rule amends the EO 11246 implementing regulations by:

• Requiring that certain information be included in covered federal contracts and subcontracts. The Final Rule requires that the equal opportunity clause included in covered federal contracts and subcontracts be amended to include that federal contractors and subcontractors must refrain from discharging, or otherwise discriminating against, employees or applicants who inquire about, discuss, or disclose their compensation or the compensation of other employees or applicants. An exception exists where the employee or applicant makes the disclosure based on information obtained in the course of performing his or her essential job functions;

• Requiring that federal contractors incorporate a prescribed nondiscrimination provision into their existing employee manuals or handbooks and disseminate the nondiscrimination provision to employees and to job applicants;

• Defining key terms such as compensation, compensation information, and essential job functions as used in EO 11246, as amended; and

• Providing employers with two defenses to an allegation of discrimination: a general defense, which could be based on the enforcement of a "workplace rule" that does not prohibit the discussion of compensation information; and an essential job functions defense. 

The Final Rule is effective January 11, 2016 and applies to all new contracts over $10K.  The FAQ section provides additional insight and details on this final rule.

Read the Final Rule and Executive Orders
•    Read the Final Rule
•    Read Executive Order 13665
•    Read Executive Order 11246

Source: Office of Federal Contract Compliance Programs (OFCCP)

More time to comment on proposed rule to collect summary pay data from federal contractors

US Labor Department will extend Equal Pay Report comment period through Jan. 5, 2015

The U.S. Department of Labor has announced a 60-day extension of the comment period for its proposed rule requiring federal contractors and subcontractors to submit an annual Equal Pay Report on employee compensation to the Office of Federal Contract Compliance Programs. Under the terms of the proposal, this requirement would apply to companies that file EEO-1 reports, have more than 100 employees, and hold federal contracts or subcontracts worth $50,000 or more for at least 30 days. Through the Equal Pay Report, OFCCP would be able to collect summary employee pay and demographic data using existing government reporting frameworks.

President Obama signed a presidential memorandum on April 8 instructing the secretary of labor to propose a rule to collect summary compensation data from federal contractors and subcontractors. The department published a notice of proposed rulemaking in the Federal Register on Aug. 8, with a deadline to submit comments by Nov. 6. The comment period will be extended through Monday, Jan. 5, 2015. To read and comment on the proposed rule, please visit http://www.dol.gov/ofccp/EPR.

OFCCP enforces Executive Order 11246, Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans' Readjustment Assistance Act of 1974. These three laws require contractors and subcontractors that do business with the federal government to follow the fair and reasonable standard that they not discriminate in employment on the basis of sex, race, color, religion, national origin, disability or status as a protected veteran. 

Source: OFCCP

This information is intended to be educational and should not be considered legal advice on any specific matter.

GE Lighting settles sex discrimination case

Agreement includes $537K for 102 female applicants

GE Lighting LLC has agreed to settle allegations of hiring discrimination following an investigation by the U.S. Department of Labor's Office of Federal Contract Compliance Programs. Under the terms of the agreement, the federal contractor will pay $537,000 in back wages and interest to 102 women who were rejected for entry-level attendant positions at the company's Bucyrus facility. GE Lighting will also extend job offers to at least five of the original class members as positions become available.

"I am pleased that we were able to work out a fair and mutually agreeable resolution with GE Lighting," said OFCCP Director Patricia A. Shiu. "The time is always right to shine a light on any and all barriers to equal opportunity in the workplace, and I encourage women who were previously denied jobs at GE's Bucyrus location to reconsider, secure in the knowledge that they will get a fair shake going forward."

During a scheduled compliance review, OFCCP investigators found that GE Lighting used the WorkKeys test as part of its selection process, even though it was not properly supported by a validation study that satisfies the requirements of the "Uniform Guidelines on Employee Selection Procedures." The agency concluded that GE Lighting's hiring process systematically discriminated against female applicants, a violation of Executive Order 11246, which prohibits federal contractors from discriminating in employment on the basis of sex. GE Lighting has already ceased using the WorkKeys test, revised its selection process to ensure equal opportunity for all applicants and invited women to reapply under the revised hiring procedures. It has also extended one of the five job offers.

GE Lighting is a subsidiary of the Fairfield, Connecticut-based General Electric Co. In the past two years, GE Lighting held more than $1.8 billion in federal contracts to provide machines and equipment to the Air Force, Navy, Army and Defense Logistics Agency.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.

Cargill agrees to pay more than $2.2M to settle charges of hiring discrimination

Company will pay back wages and interest to nearly 3,000 applicants rejected for jobs.

 

Cargill Meat Solutions, headquartered in Wichita, Kan., has agreed to settle charges of hiring discrimination based on race and sex with the U.S. Department of Labor's Office of Federal Contract Compliance Programs. Under the agreement, Cargill will pay $2,236,218 in back wages and interest to 2,959 applicants who were rejected for production jobs at facilities in Springdale, Ark.; Fort Morgan, Colo.; and Beardstown, Ill., between 2005 and 2009. The affected workers include: female applicants at Springdale and Fort Morgan, Caucasian and Hispanic applicants at Fort Morgan, and African American and Caucasian applicants at Beardstown.

"This settlement will benefit thousands of workers who were subjected to unfair discrimination," said U.S. Secretary of Labor Thomas E. Perez. "And it demonstrates the Department of Labor's commitment to ensuring that everybody has a fair and equal shot at competing for good jobs."

During a series of scheduled reviews, OFCCP compliance officers found evidence that Cargill's hiring processes and selection procedures at facilities in Arkansas, Colorado and Illinois violated Executive Order 11246 by discriminating on the bases of sex, race and/or ethnicity. The reviews also uncovered violations of the Executive Order's record-keeping requirements. The Department of Labor filed a lawsuit regarding violations at the Springdale facility in November 2011 and this settlement resolves the issues in that complaint as well as the two other reviews.

"Discrimination should never be used to justify favoring one group of workers over others," said OFCCP Director Patricia A. Shiu. "I am pleased that Cargill has agreed to put a proactive strategy in place to address this issue through new hiring procedures and in-depth training on combating stereotypes."

In addition to paying more than $2.2 million in back wages and interest to the affected applicants, Cargill has agreed to extend 354 job offers to the affected workers as positions become available. Additionally, the company has agreed to undertake extensive self-monitoring measures to ensure that all hiring practices fully comply with the law, including record-keeping requirements.

Cargill Meat Solutions, a wholly-owned subsidiary of Minneapolis-based Cargill Inc., distributes beef, pork and turkey products. Since 2005, Cargill has held federal contracts worth more than $1.4 billion.

Source: OFCCP

This information is intended to be educational and should not be considered legal advice on any specific matter.