Yesterday, President Obama signed an executive order and issued a presidential memorandum pressing his equal pay agenda. The executive order establishes that workers cannot be prevented from discussing their pay with other employees or applicants. Its declared target is to support efforts to eradicate gender-based pay disparities. Its aim though is probably more akin to using a hand-held mirror to shoot over your shoulder at the target.
Protecting an employee or applicant because they’ve “inquired about, discussed or disclosed the compensation of the employee or applicant or another employee or applicant” will have only a minimal effect, if any, on pay equity. Its greater effect will be to offer employees a means to claim retaliation if, for instance, no pay raise results or any similar adverse job action occurs after the employee was known to have discussed his pay. This executive order will at least spur employers to redouble their efforts to keep comprehensive HRIS data and use vigorous disposition codes for documenting all types of workplace results for applicants and employees alike.
The presidential memorandum mandates that the Department of Labor create a rule requiring federal contractors and subcontractors to submit summary data on the compensation paid to their employees, including data by sex and race. Obviously, such a rule would normally include classifying the compensation by not only sex and race, but by job title, job grade or some measure differentiating the types of jobs involved. However, this summary data is likely going to be calculated merely by dividing the total compensation for all employees of a particular sex or race by the number of employees of that race or sex. Federal contractors already compile comprehensive information examining their compensation practices annually as part of their affirmative action obligations, but now they will be required to submit a snapshot of that data to the Department of Labor each year. The federal government claims it needs this information because of a “lack of data as a barrier to closing the persistent pay gap for women and minorities.” However, if the Department of Labor’s past practices are any indication, the compensation data will be collected in such a summary fashion that it is virtually worthless as a statistical indicator of pay discrimination. Soon the Department of Labor will be able to claim that overall disparities in compensation between genders or races (which could be driven by one or two highly-paid individuals or which could be the result of perfectly defensible pay decisions) justifies launching a widespread investigation of the employer. How this new data ends up being used against employers in the future will determine whether underpaid workers are benefited or instead whether employers are bludgeoned by submitting unreliable data that will supposedly reveal unlawful pay practices.
So the new federal executive order and presidential memorandum are not nearly as precise as the President intends. At least the approach of requiring a wage disclosure notice (as New York and California have done) where new employees are alerted to the wage rate for each position protects workers from being shortchanged in straight-time and overtime pay. These new orders are not nearly so precise nor useful to the workplace.
April 9, 2014 No Comments
The EEOC recently announced that it will double its fine for employers who violate the notice posting requirements of Title VII of the Civil Rights Act, the Americans with Disabilities Act, and the Genetic Information Non-Discrimination Act, from $100 per violation to $210. The new rule will go into effect on April 18, 2014.
Every employer covered by Title VII, ADA, or GINA must post the EEOC’s “EEO is the Law” notice describing these laws. It must be posted in a prominent and accessible place where notices to employees and applicants are customarily maintained. Of course, the original notice requirements were put in place before the invention of the remote desktop, so consider posting these notices in multiple places, including the company intranet, or another electronic method, in addition to a physical office location.
The EEOC’s announcement should also serve as good reminder to review other federal, state, or local notice posting requirements to ensure that you are in compliance with the law.
For more information, you can go to the EEOC’s website and even download copies of the “EEO is the Law” poster or contact a member of the Troutman Sanders LLP Labor & Employment Section.
April 2, 2014 No Comments
Have you (or others at your company) considered using mandatory arbitration agreements with your employees? The idea is to require an employee who ends up in an employment dispute to handle that dispute before an arbitrator, rather than by filing a lawsuit. But are these agreements valid and enforceable? A recent decision by the Eleventh Circuit Court of Appeals (which handles cases from all federal courts in Georgia, Alabama and Florida) has a lot to say about the overall effectiveness and enforceability of mandatory arbitration agreements.
Last week, the Eleventh Circuit joined four other Circuit courts in holding that an arbitration agreement that waives an employee’s ability to participate in a “collective action” (a little different than but similar to a class action) brought under the Fair Labor Standards Act (FLSA) (the federal wage and hour law) is enforceable under another law known as the Federal Arbitration Act (FAA).
In the case of Walthour et al. v. Chipio Windshield Repair, LLC et al., a group of window repairers originally filed suit against their employer in federal court in Georgia for allegedly failing to pay them overtime wages. The employer tried to take the case out of court because the employees had signed mandatory arbitration agreements. In line with an increasingly popular trend among employers, the arbitration agreement also included a waiver of the employees’ right to take part in a class or collective action (allowing each one to only bring an individual claim). The employees opposed the effort to force them out of court and into individual arbitrations, arguing that their right to file a collective action under the FLSA was a non-waivable, substantive legal right and that the arbitration agreements were invalid because they purported to waive that right.
Following a recent series of pro-arbitration U.S. Supreme Court decisions, the Eleventh Circuit found that the arbitration agreement’s waiver of each employee’s ability to participate in a collective FLSA action was legal and enforceable under the FAA. The court noted that the FAA embodies a broad federal policy favoring arbitration agreements and seeks to relieve congestion in the courts by providing parties with an alternative method for dispute resolution that is speedier and less costly than litigation. In accordance with this federal policy favoring arbitration, the Eleventh Circuit ruled that courts are obligated to enforce arbitration agreements as written absent a “contrary congressional command.” Looking to the FLSA, the FAA, and other appellate court decisions across the country, the Eleventh Circuit held that even though the FLSA allows for collective actions to be brought, that right is not substantive, and it can be waived by employees – and it was in this case.
In an upcoming article in Troutman Sanders LLP’s Employment & The Law newsletter, we will discuss in detail the pros and cons of implementing mandatory arbitration agreements in the workplace. Ultimately, it is a decision each employer should make (in consultation with a trusted employment lawyer). This Eleventh Circuit decision in the Walthour case certainly is something important to consider as part of your company’s decision-making on using or not using mandatory arbitration agreements.
March 27, 2014 No Comments
Today is the deadline for compliance with the first two steps of the new OFCCP regulations – which we discussed in our Steps One and Two blog post here. We hope you are ready! (You might want to call us if you are not.)
Assuming you are now in compliance with the first two steps, it is time to continue with Step Five. This step must be implemented by the next time you develop an affirmative action plan after today. However, we recommend implementing this step now, as explained below.
Step 5. Take concrete steps to engage in outreach and recruitment activities and assess those activities.
While contractors have long been encouraged to work with third parties to recruit disabled individuals and veterans to their workforce, the new regulations clearly indicate that some of those efforts are now affirmatively required. For example, contractors are now required to provide notification of their affirmative action policy to its covered subcontractors. This was previously only recommended by the OFCCP.
In addition, we anticipate that the OFCCP will be asking for more information related to the specific organizations with whom the contractor has partnered in order to recruit veterans and disabled individuals to its workforce. The OFCCP recently released a database where contractors can find such organizations. Also, DirectEmployers, a nonprofit association of employers, is a great resource for providing job posting information to hundreds of organizations and also includes a list of disabled and veteran (as well as minority and female) focused organizations on their website.
So, now is the time to get serious about posting jobs with more than just the local one-stop career center. Why? Contractors will now be required to assess in writing each year the adequacy of their affirmative action efforts as well as document the actions taken. In making the assessment, contractors must consider the percentage of their veteran hires and the percentage of their disabled workforce when compared with their veteran benchmarks and the seven-percent disabled goal. We anticipate that if the benchmark or goal is not met, then the OFCCP will be asking what steps the contractor has taken to address the failure to meet the benchmark or goal. In implementing this step, documentation is critical, as the new regulations require contractors to keep records of these outreach and recruitment efforts for three years.
Ultimately, this step is where the rubber meets the road. Contractors will no longer be able to just say, “Well, we’ve been conducting outreach, but it just hasn’t worked.” Now, it has to be documented, and doing the same things that failed in a prior year (or years) to help reach the goals set or required will not be enough. Plus, you can ensure that the OFCCP will be asking for that documentation in your next desk audit, especially if the goals and benchmarks have not been met. You not only need to have the documentation, you need it to show good faith efforts to achieve your goals.
March 24, 2014 No Comments
President Obama instructed the U.S. Department of Labor (DOL) yesterday to change regulations to expand the Fair Labor Standards Act’s (FLSA) overtime provisions, in an effort to provide time-and-a-half wages to more employees. The President signed a memorandum instructing his Secretary of Labor Thomas Perez to “update” the DOL’s regulations regarding which employees are exempt from the FLSA’s coverage, and which employees are non-exempt, and thus must be paid time-and-a-half their regular wage rate for all hours worked beyond 40 hours in a week. The White House also issued a “fact-sheet” on the issue.
While it is not clear exactly what the DOL may do in response to the President’s direction, many feel that one likely step will be an attempt by the DOL to amend the FLSA’s regulations to raise the salary requirement employees must meet to qualify as an exempt executive, administrative or professional employee. The current salary requirement is at least $455 per week, an amount established with the last set of DOL changes to the FLSA’s regulations back in 2004. (Prior to 2004, the salary amount was $250, a number which had stayed constant since 1975.)
March 14, 2014 No Comments
The Department of Labor says that contractors must follow the new OFCCP regulations for any affirmative action plans that are developed after March 24, 2014. Will you be ready to assess your company’s compliance with the new requirement of seven percent (7%) disabled employees in each job group? Will you be able to track your hiring of veterans against the new hiring benchmark? Have you thought about the new narrative language that will be needed?
To be prepared, you will need to first follow step four of seven to getting into compliance with the new OFCCP regulations.
Step 4. Create new affirmative action plans for veterans and the disabled. This step essentially consists of four subparts.
- Data Collection Requirements. Contractors must begin collecting various data relating to job postings, jobs filled, and disabled and veteran applicants and hires. This data must be compiled each year as part of the annual plan update and maintained for three years. The data will be used for assessing the effectiveness of the contractor’s affirmative action efforts (something we will discuss more in step five).
- Benchmarks for Hiring Veterans. Contractors must either follow the OFCCP national hiring benchmark (currently eight percent (8%)) for veterans or create their own benchmark and document the basis for it. This benchmark will be used to assess the effectiveness of the contractor’s affirmative action efforts.
- Goals for Disabled. Contractors must establish a placement goal of seven percent (7%) for individuals with a disability in their workforce. For contractors with 100 or more employees, this goal applies not only to their entire workforce, but also each particular job group. This is a real game changer. If you have not met your 7%, we expect the OFCCP will be asking probing questions about what affirmative action efforts you have taken to recruit individuals with disabilities.
- Revisions to Plan Narratives. In connection with the new data collection requirements, the veteran benchmark, and the goal for the disabled, contractors will need to update the language in their affirmative action plans to address these new requirements as well as others, including new recommendations for reasonable accommodation procedures, updated language in the policy statement, new terms for veterans, and a new assessment of one’s affirmative action efforts.
When we present step 4 to clients as part of our implementation presentation (as we’ve been doing a lot of recently), this is usually when clients get really quiet and then someone asks, “Are you sure we are really a covered federal contractor?” An understandable question, for sure.
Stay tuned, if you can bear it, for more to come in steps five through seven.
March 13, 2014 No Comments
Two Weeks to Go…Are You Ready? Step Three of Seven Steps to Compliance with the New OFCCP Regulations
We continue now with step three of seven to getting into compliance with the new OFCCP regulations. As we said in our prior post covering steps one and two, on March 24, 2014 major revisions to regulations on the laws requiring federal contractors and subcontractors to engage in affirmative action for disabled individuals and veterans go into effect. While steps one and two need to be in place on or soon after March 24, the remaining steps are only required to be in place as of the date of the first affirmative action plan developed after March 24…but they will take some significant time and effort to implement.
Step 3. Implement new requirements concerning invitations to self-identify for disabled and veteran applicants and employees. Current contractors hopefully already know that they are required to provide applicants with an invitation to self-identify as disabled or a veteran at the post-offer, pre-employment stage of the hiring process. But under the new regulations, they will also have to extend applicants an invitation to self-identify at the pre-offer stage. The disability form to be used is one that is prescribed by the OFCCP, while the OFCCP’s veteran’s form (which actually consists of two different forms for each stage) is recommended.
In addition, one of the most significant pieces of the new regulation is that contractors are now required to survey all of their current employees about whether they have a disability and that survey must be done within the first year after the contractor becomes subject to this requirement (and every five years thereafter). Contractors will also be required to remind employees once in each five-year period that they may identify as disabled.
While contractors can wait until the beginning of their next plan year after March 24, 2014 to begin providing the new self-identification forms, many contractors may wish to begin earlier. Not surprisingly, the OFCCP is encouraging early implementation. At a minimum, contractors will need to be ready to “flip the switch” on the effective date of their first plan after March 24, 2014.
Our OFCCP compliance team is busy advising contractors on issues related to implementation of the new regulations. If you have not begun to review the new requirements and the specific issues you may face in implementing, now is the time!
March 12, 2014 No Comments
Steps 1 and 2: Actions You Must Take NOW!
On March 24, 2014, major changes to regulations on the laws requiring federal contractors and subcontractors to engage in affirmative action for disabled individuals and veterans will go into effect. Is your company ready?
Now is the time to begin taking concrete steps to comply with the new regulations because some of the new required elements of your affirmative action program must be operational on March 24, 2014. Other requirements must be in place as of the date of your first affirmative action plan after March 24, but they make take some time to implement.
There are seven steps a contractor needs to take to ensure that they are in compliance with the new regulations. The first two steps cover what needs to be in place by March 24, 2014:
Step 1. Ensure notices and advertisements comply with new posting requirements. Under the new regulations, contractors must post certain notices electronically if any employees telecommute or do not work at the contractor’s physical facility. Those notices must be posted by March 24, 2014. You will also need to ensure that the reference to the Rehabilitation Act and VEVRAA in all your subcontracts has been replaced with certain language specified by the Department of Labor for any contracts that are entered into or modified on or after March 24, 2014. As of that date, any advertisements for employees must contain certain specified language regarding disabled individuals and veterans (and may not simply say that the contractor is an “equal opportunity employer” or list “M / F / D / V”). As you audit your postings and notices, do not forget about all the other notices that must also be posted in the facility, including your affirmative action policy statement, the hours that the affirmative action plan for disabled individuals and veterans can be reviewed by employees, the notice you have provided to a union regarding your commitment to affirmative action, and the poster called Employee Rights under the National Labor Relations Act.
Step 2. Provide contact information to state employment service delivery systems. The first time you post an opening with the state employment service delivery system in each state where you have establishments after March 24, 2014, you will need to provide that agency with certain information about your status as a federal contractor, the name and location of each hiring location within the state, contact information for your hiring officials and external job search organizations, and inform them that you desire to receive priority referrals for veterans. You also will have to provide them with updated information each time the hiring location or contact information changes.
While implementing these new regulations, we recommend that contractors take this opportunity to review their entire affirmative action program to ensure full compliance with not only these new regulations, but also many other requirements that contractors have often overlooked in the past. If you would like more information about the new regulations and the seven steps a contractor should take to ensure compliance with these regulations, please contact us. And stay tuned for the next five steps, coming soon!
February 26, 2014 No Comments
Join Troutman Sanders’ Labor & Employment Partner, Evan Pontz, and co-presenter, Rebecca Shanlever of Hall, Arbery, Gilligan, Roberts & Shanlever as they repeat the webinar:
Strategies For Dealing With FMLA Abuse
Thursday, February 27, 2014
1:00 p.m. – 2:30 p.m.
Live webinar via your computer
Managing an employee on FMLA leave can be enough to give you a headache. Many managers suspect that an employee is “working the system” and taking part in FMLA abuse. Have you ever wondered – does this employee really need medical leave? What can I ask the employee about the leave? Can I require the employee to turn in a doctor’s note? Can I get a second opinion? This webinar will answer these and other questions and provide guidance on managing suspected FMLA abuse.
The webinar is presented by Aurora Training Advantage and will address the following concerns:
- Using job descriptions to curb FMLA abuse
- What paperwork is required… and allowed
- Special concerns related to intermittent (reduced-schedule) FMLA leave
- What disciplinary actions you can and should use
- How to establish effective policies for employees on leave
- At what point should termination be considered
- Learn proper techniques for investigating FMLA leave abuse
February 24, 2014 No Comments
Many in-house counsel and human resources officials are aware that their company, as a federal contractor, is required to engage in affirmative action. However, many are unaware of the significant risks associated with a compliance audit of their affirmative action program by the Office of Federal Contract Compliance Programs (“OFCCP”).
For example, did you know that when your company is audited by the OFCCP, it is required to provide information on all employees in your affirmative action plan being audited, including all applicants, hires, promotions, and terminations for the prior year? Did you also know that you are required to provide all compensation information, too? Can you imagine giving all of that information to the EEOC? Well, as the last several years under the current administration has highlighted, when you give that information to the OFCCP, they are performing analysis and pursuing systemic claims based on that data, as the following string of stories from the OFCCP news wire in 2013 indicates.
- Judge orders bank to pay nearly $2.2 million for discrimination against 1,100 African American Job seekers.
- OFCCP settles wage discrimination case with company for $290,000 in back wages and interest to 78 affected Hispanic production associates.
- OFCCP resolves sex discrimination case with healthcare company on behalf of 77 men who applied for in-home care positions, each of whom will receive $92,000 in back wages and interest, and the company will make eight job offers to the class members as well as reform its hiring practices.
- OFCCP settles hiring discrimination case with a health plan company for $372,739 to be paid to one Asian, two Hispanic and nine African American employees.
- OFCCP settles sexual harassment and retaliations case with a construction company for $112,573 in back wages to 14 terminated workers and will make job offers as opportunities become available.
- OFCCP resolves hiring discrimination case with a contractor for $70,000 in back wages and interest to 14 affected workers and to extend at least six offers of employment – with retroactive seniority – as positions become available.
- OFCCP settles sex discrimination case with a non-profit charity for $130,970 to 200 men who were allegedly denied the opportunity to advance to the offer stage of the hiring process because of perceptions among some hiring managers that women are better at customer service.
- Hot dog manufacturer to pay 1,988 female applicants $439,000 to settle OFCCP suit alleging sex discrimination and will extend 700 job offers to affected women as positions become available.
Given the significant legal risk associated with this often overlooked area of compliance, we recommend that contractors carefully review their affirmative action program and hopefully avoid becoming a headline for 2014. Stay tuned for our next two blog posts with more information on this important topic.
February 10, 2014 No Comments