On March 15, 2022, the US Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) issued a new directive putting federal contractors on notice that it will more closely scrutinize their pay equity audits. Making headlines, the directive states that federal contractors are expected to hand over information about their internal pay analyses when being audited by the office, including documents that are protected by the attorney-client privilege and/or work product doctrine.

Background

Executive Order 11246 requires affirmative action and prohibits federal contractors from discriminating on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin. Contractors also are prohibited from discriminating against applicants or employees because they inquire about, discuss, or disclose their compensation or that of others.

As part of their affirmative action obligations, supply and service contractors are required to perform an in-depth analysis of their total employment practices to determine whether and where impediments to equal employment opportunity exist. This includes conducting an in-depth analysis of their compensation systems to determine whether there are gender-, race-, or ethnicity-based disparities, as provided in 41 CFR 60-2.17(b)(3).3.

To comply with the regulations, most companies doing business with the federal government  conduct an evaluation of their pay practices for potential gender, race, or ethnicity-based disparities.  Oftentimes, these analyses are performed with the help of outside counsel who provides legal advice regarding, among other things, compliance with the requirements enforced by OFCCP. And, until now, these pay audits have been considered privileged and confidential.

Impact of the new directive

During a compliance evaluation, a supply and service contractor is required to provide OFCCP with compensation data. In addition to requesting additional compensation data, interviews, and employment records, the OFCCP is now making explicit that it may also seek the contractor’s evaluation under § 60-2.17(b)(3), which the OFCCP calls the “pay equity audit.”

Continue Reading OFCCP Emboldened To Demand Contractors’ Internal Pay Analyses

Federal contractors and subcontractors in the US now have guidance on mandatory vaccines for employees, while private US employers with 100 or more employees are still waiting for the Occupational Safety and Health Administration (OSHA) to issue an Emergency Temporary Standard (ETS). On September 24, 2021, the Safer Federal Workforce Task Force–the task force created by President Biden to provide workplace guidance to heads of federal agencies during the COVID-19 pandemic–released its COVID-19 Workplace Safety: Guidance for Federal Contractors and Subcontractors (the Guidance). The Guidance primarily addresses vaccination requirements for employees of covered federal contractors, but it also imposes mask and physical distancing requirements for covered contractor worksites (including for employees, visitors and others) and requires contractors to designate a person (or persons) to coordinate COVID-19 workplace safety efforts at their workplaces.

Continue Reading No Fair! US Federal Contractors Get Guidance on Mandatory Vaccines While Other Private Employers Continue to Wait

President Biden did not waste any time after taking office on January 20, 2021. Shortly after the Presidential Oath of Office was administered, Biden signed 17 executive actions, which either impact the workplace or provide insight into what may be forthcoming under the new administration for employers.

A Flurry of Executive Orders on Day One

Biden issued a memorandum to agencies to freeze all last-minute regulations put in motion by the prior administration as President Trump was leaving office. Notably, these regulatory “freeze memos” are not uncommon for incoming administrations to issue. This pause on the prior administration’s last-minute regulations will give the Biden administration the opportunity to evaluate the so-called “midnight regulations” and determine if they will become final, be amended, or rescinded altogether.

He also issued an Executive Order reinforcing that Title VII prohibits the federal government from discriminating on the basis of sexual orientation or gender identity. The Order references the recent Supreme Court case of Bostock v. Clayton County (blogged about here). Specifically, the Order states “[i]t is the policy of my Administration to prevent and combat discrimination on the basis of gender identity or sexual orientation, and to fully enforce Title VII and other laws that prohibit discrimination on the basis of gender identity or sexual orientation.” The Order notes that laws that prohibit sex discrimination (specifically referencing Title IX, the Fair Housing Act, and section 412 of the Immigration and Nationality Act) also prohibit discrimination on the basis of gender identity or sexual orientation.

Continue Reading Biden and the Workplace: Early Days, Major Changes

On December 22, a California federal judge issued a nationwide preliminary injunction blocking President Donald Trump’s Executive Order on Combating Race and Sex Stereotyping (“Executive Order”).  The controversial Executive Order restricted diversity training for federal contractors by prohibiting contractors from providing training covering “divisive topics.” U.S. District Court Judge Beth Labson Freeman’s preliminary injunction takes effect immediately, remains in place until further order of the court, and prohibits the federal government from implementing or enforcing key provisions of the Executive Order.

Continue Reading Trump’s Executive Order Limiting Diversity Training Put On Ice For The Holidays

On September 22, 2020, President Trump issued an Executive Order on Combating Race and Sex Stereotyping (“Executive Order”), following a September 4, 2020 White House memorandum criticizing federal agencies for having “divisive, un-American” training sessions on “critical race theory,” “white privilege,” and other training teaching individuals that the US or any race or ethnicity is inherently racist. The September 4 memorandum instructed federal agencies to cease the funding of any training that fit the description.

The September 22 Executive Order brings federal contractors into the fold, prohibiting them from using any workplace training during the performance of a government contract that inculcates in their employees certain “divisive concepts,” and requiring them to carry those imperatives down to their subcontractors and vendors. Though the Executive Order was “effective immediately” as of September 22, the requirements for contractors affect federal prime contracts entered into on or after November 21, 2020, leaving some time for federal contractors to prepare-or watch as expected legal challenges to the Executive Order play out.

Despite the uncertainty surrounding the Executive Order, federal contractors can take steps to prepare in case the Executive Order applies come November. Here’s what federal contractors need to know now.

Continue Reading Can Federal Contractors Provide D&I Training? Executive Order on Combating Race and Sexual Stereotyping Leaves Federal Contractors With No Clear Answer

Less than two weeks ago we reported that all employers with 100 or more workers in the US would have until September 30 to provide the EEOC with pay data (read more here).

Then, just days later, on May 3rd, the Justice Department appealed the two rulings resurrecting the Obama-era mandate. Ironically, the appeal

All employers with 100 or more workers in the US have until September 30 to provide the EEOC with pay data as part of the annual workforce data report known as the EEO-1.

On April 25, US District Judge Tanya Chutkan accepted the EEOC’s proposal (more here) to make employers submit their 2018 pay data this fall. She also ordered the EEOC to collect a second year of pay data, giving it a choice between collecting employers’ 2017 data or making it collect 2019 data down the road. Her ruling is expected to impact more than 60,000 employers.

Continue Reading US Employers Must Submit Revised EEO-1 Forms With Pay Data By September 30, 2019

Employers may be required to disclose aggregate pay data in their annual EEO-1 filings as early as May 31, 2019.

On March 4, 2019, a federal court in Washington D.C. lifted the Office of Management and Budget’s (OMB) stay of the revised EEO-1 form that requires companies to submit summary wage data by race/ethnicity and gender. While we expect there may be further challenges and/or delays to the implementation of the revised EEO-1 form, taking a conservative approach means that companies should plan as though they need to report pay data by the current May 31, 2019 deadline.

Continue Reading US Employers Prepare For Reinstated EEO-1 Pay Data Reporting

Government contractors are familiar with the obligation to retain minority or women-owned businesses as subcontractors to obtain government work. Increasingly, apex private sector businesses require participation by minority or women-owned businesses as a condition of obtaining work, as well.

A recent decision by the federal court for the Southern District of New York is a cautionary tale, and highlights the care required when terminating a minority business enterprise (MBE) sub-contractor. Annuity Funds Operating Engineers Local 15 v. Tightseal, No. 17-CV-3670 (S.D.N.Y. August 14, 2018).

Continue Reading Termination Of An MBE Can Lead To Liability

On February 1, 2018, the Office of Federal Contract Compliance Programs (OFCCP) sent 1,000 Corporate Scheduling Announcement Letters (CSALs) to federal contractors informing them that they may be audited for compliance with federal non-discrimination requirements/affirmative action plans.

Continue Reading Federal Contractors: Be Prepared For An Audit In 2018