On Friday Office of Federal Contractor Compliance Programs (OFCCP) released an updated Voluntary Self-Identification of Disability Form (CC-305).  The new form is much shorter than the previous form and now fits on a single page.  The announced purpose of the change is to increase the response rate to the form. Covered federal contractors are required to invite all applicants and new hires to self-identify as an individual with a disability using this form.  Once every five years, a contractor must re-extend the invitation to self-identify disability status to current employees.  While covered federal contractors have some discretion with the format and content of invitations to self-identify race, ethnicity, gender and veteran status, there is little to no discretion with the format and content of the invitation to self-identify disabilities. Covered federal contractors have until August 4, 2020 to implement the new form into their applicant and employee self-identification process.

The Equal Employment Opportunity Commission (EEOC) announced May 7, 2020 that it will delay until March 2021 the annual filing of the EEO-1 Component 1 Report, which requires covered employers to report by job category the race, ethnicity and gender of its employees. At that time, pending approval from the OMB, covered employers will be required to file both the 2019 and 2020 EEO-1 Component 1 Reports. Covered employers include those with 100 or more employees and federal contractors with 50 or more employees and a federal contract of $50,000 or more. Note that employers with less than 100 employees who are owned or affiliated with another entity such that the combined employee count is over 100 employees may also be required to file this report. Covered employers are encouraged to confirm that all employees have had the opportunity to voluntarily self-identify their gender, ethnicity and race and to make sure records are kept of this information for future reporting in 2021. If an employer identifies employees who have not responded to this voluntary invitation, employers may re-extend the invitation and/or rely on employment documents such as an I-9 or visual observation. If an employer needs to rely on visual observation, it will be easier to gather this information now rather than waiting until 2021. Polsinelli will continue to monitor developments with the EEO-1 report.

The Equal Employment Opportunity Commission (EEOC) announced May 7, 2020 that it will delay until March 2021 the annual filing of the EEO-1 Component 1 Report, which requires covered employers to report by job category the race, ethnicity and gender of its employees.  At that time, pending approval from the OMB, covered employers will be required to file both the 2019 and 2020 EEO-1 Component 1 Reports. Covered employers include those with 100 or more employees and federal contractors with 50 or more employees and a federal contract of $50,000 or more.  Note that employers with less than 100 employees who are owned or affiliated with another entity such that the combined employee count is over 100 employees may also be required to file this report. Covered employers are encouraged to confirm that all employees have had the opportunity to voluntarily self-identify their gender, ethnicity and race and to make sure records are kept of this information for future reporting in 2021.  If an employer identifies employees who have not responded to this voluntary invitation, employers may re-extend the invitation and/or rely on employment documents such as an I-9 or visual observation.  If an employer needs to rely on visual observation, it will be easier to gather this information now rather than waiting until 2021. Polsinelli will continue to monitor developments with the EEO-1 report.

On April 1, 2020, the Wage and Hour Division of the Department of Labor (“DOL”) issued temporary regulations (“Regulations”) to implement the Public Health Emergency Leave (“Emergency FMLA Leave”) and Emergency Paid Sick Leave (“Paid Sick Leave”) benefits available under the Families First Coronavirus Response Act (“the “Act”). The Regulations took immediate effect, on the effective date of the Act, and remain in effect through December 31, 2020, when the Act expires. The Regulations expand on the DOL’s guidance or “Families First Coronavirus Response Act: Questions and Answers,” which were issued late the week of March 23 and updated over the following weekend.  In some instances, the Regulations are inconsistent with the DOL’s former guidance – particularly with regard to: (1) The reasons an employee may take Paid Sick Leave, (2) The applicability of the integrated employer and joint employer tests which are used to determine the number of employees for purposes of coverage under the Act, and (3) The documentation employers may request to determine an employee’s eligibility for leave under the Act. The DOL updated its previous guidance or Questions and Answers on April 1, 2020 (here), to conform to the Regulations. A brief summary of several sections that (1) depart from the DOL’s former guidance or (2) provide new information the DOL did not previously address is below. Government Orders The Regulations expand the qualifying reasons for Paid Sick Leave to include containment, shelter-in-place and stay-at-home orders.  However, an employee is only entitled to Paid Sick Leave if the order “cause[s] the Employee to be unable to work even though his or her Employer has work that the Employee could perform but for the order.” Significantly, the Regulations further broaden “Subject to a Quarantine or Isolation Order” to include: when a Federal, State, or local government authority has advised categories of citizens (e.g., of certain age ranges or of certain medical conditions) to shelter in place, stay at home, isolate, or quarantine, causing those categories of Employees to be unable to work even though their Employers have work for them. Advice to Self-Quarantine The Regulations state that an employee has been “advised by a health care provider to self-quarantine due to COVID-19 concerns” for purposes of Paid Sick Leave if: (i) A health care provider advises the Employee to self-quarantine based on a belief that— (A) the Employee has COVID-19; (B) the Employee may have COVID-19; or (C) the Employee is particularly vulnerable to COVID-19; and (ii) following the advice of a health care provider to self-quarantine prevents the Employee from being able to work, either at the Employee’s normal workplace or by Telework. Similarly, the Regulations provide that an employee may take Paid Sick Leave to care for another who has received any of the same recommendations.  On that point, the Regulations explain that to qualify for Paid Sick Leave, the other person must be: an Employee’s immediate family member, a person who regularly resides in the Employee’s home, or a similar person with whom the Employee has a relationship that creates an expectation that the Employee would care for the person if he or she were quarantined or self-quarantined. For this purpose, ‘individual’ does not include persons with whom the Employee has no personal relationship. Seeking a Diagnosis With respect to people who suspect that they are ill, the Regulations clarify that if an employee is taking leave because they are “experiencing COVID-19 symptoms and seeking medical diagnosis,” the employee’s Paid Sick Leave “is limited to the time the Employee is unable to work because the Employee is taking affirmative steps to obtain a medical diagnosis, such as making, waiting for, or attending an appointment for a test.” Employer Coverage The Regulations provide that all common employees of joint employers or all employees of integrated employers must be counted together to determine coverage under the Act.  We have covered this issue in more detail here. Notice of Need for Leave and Documentation of Need for Leave The Regulations regarding documentation of the need for leave are a departure from the DOL’s former guidance, which suggested that an employer could require a variety of documents with a request for Paid Sick Leave or Emergency FMLA Leave.  The Regulations provide that an employer may not require a notice of the need for leave to include documentation beyond what is listed below. Before taking either Paid Sick Leave or Emergency FMLA Leave, all employees must give their employers documentation that includes: (1)  The employee’s name; (2)  The date(s) for which leave is requested; (3)  The qualifying reason for the leave; and (4)   A written or oral statement that the employee is unable to work because of the qualifying reason for leave. Before taking a Paid Sick Leave or Emergency FMLA Leave, some employees must additionally provide: o   For an employee subject to a federal, state or local quarantine or isolation order related to COVID-19: the name of the government entity that issued the Quarantine or Isolation Order o   For an employee advised by a health care provider to self-quarantine due to COVID-19 concerns: the name of the health care provider who advised the employee to self-quarantine due to concerns related to COVID-19. o   For an employee caring for an individual subject to a federal, state or local quarantine or isolation order or a health care provider’s advice to self-quarantine due to COVID-19 concerns: either (a) the name of the government entity that issued the Quarantine or Isolation Order to which the individual being cared for is subject or (b) the name of the health care provider who advised the individual being cared for to self-quarantine due to concerns related to COVID-19. o   For an employee caring for the employee’s child whose school or place of care is closed or the child’s care provider is unavailable due to a public health emergency) or Emergency FMLA Leave: the name of the employee’s child (or children), the name of the closed or unavailable school or child care provider, and a representation that no other suitable person will care for the employee’s child when the employee takes Paid Sick Leave or Emergency FMLA Leave. In addition to the information specifically identified, the Regulations generally state that an employer may request that an employee provide additional material as needed to support the employer’s request for tax credits pursuant to the Act.  And, the Regulations state that employers are not required to provide an employee’s request for leave if the employee fails to provide materials sufficient to support the applicable tax credit.  With respect to documents required for tax credits, the Regulations refer to https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs (“IRS FAQs”) for more information. Significantly, neither the Regulations nor the IRS FAQs specify any additional information employees must provide an employer to take Paid Sick Leave based on experiencing COVID-19 symptoms and seeking medical diagnosis or for employees experiencing any other substantially similar condition specified by the federal government. While the Regulations answer questions about the process of requesting leave under the Act, the Regulations leave open questions about: Whether employers can require additional documentation substantiating the need for leave after a Paid Sick Leave or Emergency FMLA Leave is approved. Whether the DOL will issue additional Regulations or the IRS will issue additional guidance on the documentation process in the coming weeks. Recordkeeping Finally, under the Regulations, an employer must: Retain all documentation related to an employee’s request for or entitlement to Paid Sick Leave or Emergency FMLA Leave for four years, regardless of whether the leave was granted or denied. Document and keep any oral statements an employee provided to support a request for Paid Sick Leave or Emergency FMLA Leave for four years. Have an authorized officer document that the employer is eligible for the small employer exemption to the Act when the employer denies an employee’s request for Paid Sick Leave or Emergency FMLA Leave (and keep such documentation for four years). Notably, the Regulations provide that a small employer must post a notice regarding the Act, even if the employer determines that it is exempt.

Employers have faced many questions as they prepare for the effective date of the Families First Coronavirus Act (FFCRA).  Many of those questions remained unanswered after the Department of Labor issued its “Families First Coronavirus Response Act: Questions and Answers” on Tuesday, February 23, 2020.  The DOL added to its guidance late Thursday, February 25, addressing some of these outstanding issues: What does it mean to be “unable to work” to qualify for leave under the FFCRA?  An employee is unable to work if the employer has work available for the employee to perform, either at a worksite or remotely, and the employee is unable to perform that work because of a COVID-19 qualifying reason.  A common example is if an employer has telework available, but the employee cannot perform the telework because the employee has a young child who needs supervision because the school is closed due to COVID-19. On the other hand, if the employer’s worksite is shut down, for example under a stay at home order, and the employee’s work cannot be performed remotely, the employee likely does not qualify for leave—the employee is able to work, the work is just not available.  Note, though, that a stay at home order is different from a quarantine or self-isolation order.  Employees under a quarantine/isolation order might be entitled to leave. Do laid off or furloughed employees qualify for leave?  No.  Once an employee is laid off or furloughed, whether before or after April 1, that employee is no longer eligible for leave under the FFCRA.  The same is true even if the employee is laid off or furloughed while on leave provided by the FFRCA.  The same is also true if an employer closes the worksite, before or after April 1, even for a brief or temporary period.  In sum, an employee is not entitled to leave under the FFCRA during the period while the business is closed, even if the closure was caused by a federal, state, or local order.  Similarly, an employee cannot use leave under the FFCRA for hours reduced by an employer, even if the reduction in hours was related to COVID-19. Can an employer require documentation showing an employee’s need for leave?  Yes.  An employer can and should require an employee to provide documentation showing the COVID-19 qualifying need for leave, such as a closure notice on a school website or a copy of a government order placing the employee under quarantine.   Indeed, an employer must require and retain documentation to claim for the tax credit available under the FFCRA.  There are no designated FFCRA forms.  However, an employee requesting emergency FMLA for a COVID-19 qualifying reason that rises to the level of a “serious medical condition” must continue to provide the medical certifications required under the FMLA. Click here for the fact sheet. Can FFCRA leave be used intermittently?  It depends.  If an employee is teleworking, the employee may use emergency FMLA or paid sick leave in any increment the employer agrees to.  If an employee is performing work at the employer’s worksite, the employee may use emergency FMLA or paid sick leave intermittently to care for the employee’s child(ren) whose school is closed or childcare is unavailable because of COVID-19 related reasons with the employer’s permission.  However, an employee must use emergency paid sick leave continuously in full day increments if the employee is subject to an isolation or quarantine order, has been advised by a healthcare professional to self-quarantine, is experiencing COVID-19 symptoms, or is caring for someone isolated because of or suffering from COVID-19 symptoms.  In these situations, the employee must use the emergency paid sick leave continuously until the employee exhausts the leave available or no longer has a qualifying reason for the leave.  Note the DOL’s guidance encouraged flexible, voluntary arrangements when the employee needs leave to care for a child who is out of school or does not have childcare due to COVID-19. Can FFCRA leave be used in conjunction with unemployment benefits?  Not under federal law.  Under federal law, an employee receiving paid leave under the FFCRA is not eligible for unemployment insurance benefits.  However, benefits may be available under state law as states have the authority to offer unemployment benefits to workers whose pay has been reduced. The full text of the DOL’s Q&A is available here.

Unemployment benefits are a joint federal-state program. While the federal government provides some guidelines, every state has its own rules on unemployment benefits, making navigation of the rules challenging for employers who have employees in multiple states. Complicating the unemployment process are quickly evolving changes to state unemployment standards in response to COVID-19. The general questions that determine unemployment eligibility are: A. Is the employee out of work or did the employee experience a reduction in work income through no fault of the employee? B. Is the employee ready and able to work? C. Does the employee meet qualifying work and wage requirements? (Each state has requirements for wages earned or time worked during an established period of time referred to as a “base period.”) D. Is the employee receiving income replacement such as sick, disability, or severance pay that offsets or replaces unemployment? (Some states reduce unemployment benefits for qualifying employees by other income replacement the employee may be receiving.) In operation, the availability of unemployment benefits will depend on the circumstances surrounding the employee’s unemployment and state law: If an employee is on leave by choice, such as to care for himself/herself or others, self-quarantine, or FMLA, then unemployment benefits are generally not available because the employee is unable to work. Note that some states are making exceptions here for absences related to caring for oneself or others who have tested positive for or have been exposed to COVID-19. If there is a layoff or furlough (temporary or otherwise), then unemployment benefits are typically available to affected employees because the affected employee is able to work. If an employer reduces an employee’s hours, then unemployment benefits are typically available depending on the state and the amount of the reduction in hours. In many states, benefits are available under a “work share” program if certain criteria are met. If there is forced leave by an employer, such as a 14-day quarantine, the availability of unemployment benefits will depend on the jurisdiction. The United States Department of Labor (“DOL”) has clarified in published guidance that individual states have the authority to make changes to unemployment based on COVID-19, concerns such as extending the availability of unemployment benefits to eligible employees when: (1) An employer temporarily ceases operations due to COVID-19, preventing employees from coming to work; (2) An individual is quarantined with the expectation of returning to work after the quarantine is over; or (3) An individual leaves employment due to a risk of exposure or infection or to care for a family member. In addition, federal law does not require an employee to quit in order to receive benefits due to the impact of COVID-19. A majority of states have taken action to modify their usual unemployment rules. For example, California has stated it will remove the waiting week period that usually applies to unemployment, meaning that employees will receive benefits starting on day one. Missouri has specifically stated that it would allow benefits for a forced quarantine by the employer. In light of the global pandemic, unemployment benefits rules may rapidly change in coming weeks. Pending federal legislation proposes further relief including additional money for unemployment benefits and relief to employers for charges related to unemployment benefits paid due to COVID-19. In addition, states continue to monitor their processes and institute changes to respond to the current economic landscape. Employers are free to offer employees information on filing for unemployment, but should note that state unemployment agencies are making frequent changes that may provide for unemployment benefits for COVID-19-related issues. Below is a list of resources for states that have taken action in response to COVID-19 issues and, for states where action has not yet been taken, a link to the general unemployment site:

The Equal Employment Opportunity Commission (EEOC) requires employers with at least 100 employees (and federal contractors with at least 50 employees) to file an EEO-1 Report with a count of employees by establishment and job category with race, ethnicity, and gender information for each employee.  This part of the EEO-1 is now referred to as Component 1. In 2016, the EEOC implemented a pay data requirement for the EEO-1 Report, referred to as Component 2.  Component 2 requires the disclosure of the total number of full- and part-time employees by demographic category divided into 12 pay bands for each EEO-1 job category, and hours worked by all employees in each band. Before the original deadline for Component 2 pay data, the Office of Management and Budget (OMB) paused the U.S. Equal Employment Opportunity Commission’s collection of Component 2 pay data. A lawsuit initiated by both the National Women’s Law Center and the Labor Council for Latin American Advancement followed, arguing that the OMB’s decision halting the expanded data collection was without cause. National Women’s Law Center v. Office of Management and Budget, Case No. 1:17-cv-02458-TSC. This case remains pending in the U.S. District Court for the District of Columbia.  The Court’s August 25, 2018 ruling in this case reinstated the requirement to collect Component 2 data. What now? Employers must report Component 1 gender, race and ethnicity information for all covered employees on a single payroll date between October 1, 2018 and December 31, 2018. The portal will remain open for filing Component 1 data until May 31, 2019.  Employers who need an extension to meet the Component 1 deadline may contact the EEOC for a one-time 2-week extension by contacting E1.EXTENSIONS@EEOC.GOV.  An employer requesting a longer extension must provide the EEOC with a rationale therefor. Requests for extensions will not be accepted after May 31, 2019. When is Component 2 pay data due?  Following the Court’s ruling in National Women’s Law Center, the EEOC first indicated it would likely begin collecting Component 2 data for both calendar years 2017 and 2018 starting sometime in mid-July. Further, the current published deadline for submission Component 2 data is September 30, 2019. EEOC Chair Victoria Lipnic acknowledged that these “first-ever pay data collections,” which are now required in a relatively short time frame, will be difficult to accomplish. However, the EEOC is “committed to meeting the Court’s order, working with employers, and making this happen by the end of September.” On May 3, 2019, the Department of Justice filed a Notice of Appeal in the National Women’s Law Center case, which does not stay the current district court orders or alter EEO-1 filers' obligations to submit Component 2 data. What now? Employers should review our previous post for additional insights on EEO-1 reports, and how to avoid common pitfalls when preparing employer Component 1 data. Employers should also consider hiring experienced counsel to assist with filing their Component 1 and 2 data, in light of these new requirements. Polsinelli will continue to provide updates on the filing of Component 2 data when as it becomes available.

The Equal Employment Opportunity Commission (EEOC) has announced that employers covered by the EEO-1 reporting obligation must submit pay data broken down by job category, pay band, race, ethnicity and sex for both calendar years 2017 and 2018.  This pay data, which is referred to as Component 2 of the EEO-1, is due on September 30, 2019. As previously reported, on April 25, 2019, the U.S. District Court for the District of Columbia issued a ruling requiring employers to file Component 2 pay data for 2018 and left it up to the EEOC to also require one additional year of pay data from either 2017 or 2019.  The Court has now published its Order. The EEOC stated on its website that it expects to begin collecting Component 2 data for calendar years 2017 and 2018 in mid-July and will give notice when it has a more precise date. Covered employers should begin planning collection of pay data by race, ethnicity and sex for both 2017 and 2018. Polsinelli will continue to monitor this issue and provide updates on reporting requirements.

On April 25, 2019, the U.S. District Court for the District of Columbia gave an oral ruling from the bench reportedly accepting the EEOC’s proposal to make employers submit their 2018 pay data by September 30, 2019.  This is consistent with the proposal the EEOC submitted on April 3, 2019 on which we previously reported. The pay data is referred to as Component 2 of the EEO-1 report and includes detailed data on employee compensation and hours worked from covered employers sorted by job category, pay band, race, ethnicity, and gender. The pay data is required to be from the 2018 calendar year. All employers who are required for 2018 to file an EEO-1 report will be required to submit pay data. This includes: All private employers with 100 or more employees that are subject to Title VII of the Civil Rights Act of 1964, as amended. Some private employers with fewer than 100 employees, if the employer is owned or affiliated with another employer -- or there is centralized ownership, control or management -- so that the employers together legally constitute a single enterprise, and the entire enterprise employs a total of 100 or more employees. Federal contractors that employ 50 or more employees and are prime contractors or first-tier subcontractors and have a single contract, subcontract or purchase order amounting to $50,000 or more. According to the Court’s docket, a written order is forthcoming. It is also expected that the EEOC will be updating its website to provide instructions on the collection and reporting of this pay data. Polsinelli will continue to monitor this issue and provide updates on reporting requirements.

On March 4, 2019, the United States District Court for the District of Columbia caught the employer community by surprise by ordering the EEO-1 pay data reporting requirement immediately reinstated. Background In September 2016, the U.S. Equal Employment Opportunity Commission (EEOC) announced plans to collect employee pay data from covered private employers and contractors, as an additional component to the annual Employer Information Report, or EEO-1 report.  According to the EEOC, collecting W-2 wage information and total hours worked by gender, race, and ethnicity will enable the Commission to evaluate employers’ pay practices and ultimately to “prevent pay discrimination and strengthen enforcement” of federal anti-discrimination laws. However, on August 29, 2017, the White House Office of Management and Budget (OMB), which had previously approved the EEOC’s rule changes in 2016, put an immediate stay on the EEOC’s plans to collect the additional pay data. The OMB indicated that some aspects of the expanded collection were unnecessarily burdensome for employers, and it needed time to further review the change (citing the Paperwork Reduction Act, which directs federal agencies not to overload business with paperwork).  In November 2017, the Labor Council for Latin American Advancement and the National Women’s Law Center (NWLC) sued OMB, alleging that it violated the Administrative Procedure Act by moving to review a rule it had already approved. What is happening now? Now, just 12 weeks before employers’ submissions are due to the EEOC, the district court found the OMB provided inadequate reasoning to support its decision to stay the data collection and ruled that the previously approved revised EEO-1 form “shall be in effect.” Unless the ruling is stayed pending appeal, employers will be required to collect not only W-2 wage information and total hours worked by gender, race, and ethnicity, but also the number of employees falling within each of 12 pay bands for each job category, ranging from $19,239 and under to $208,000 and over. Employers have been providing race and gender information, but have not been required to provide the pay data. The looming question is whether the pay data will be required for this year’s reporting period. The EEO-1 reporting deadline is currently set for May 31, 2019 following a delay due to the government shut down. As of now, the EEO-1 survey portal has not yet been opened, and the EEOC has not issued any new instructions or guidance that is typical with the opening of the report. It remains to be seen whether OMB will appeal the district court’s decision and seek a stay of the use of the form by EEOC pending the appeal.  The EEOC could seek to further revise the reporting guidelines, but the EEOC does not currently have a quorum to act. Polsinelli will continue to monitor developments in this area.  In the meantime, employers should continue to prepare to file their 2018 EEO-1 report including taking steps to be prepared to file the pay data components required by the revised form.

The Equal Employment Opportunity Commission (“EEOC”) recently announced that EEO-1 Reporting will open in early March 2019, and covered employers must submit their EEO-1 reports on or before May 31, 2019.  The EEO-1 filing deadline was extended due to the lapse in the EEOC’s appropriations.  According to the EEOC, more specific information about EEO-1 filing will be published “in coming weeks.” What is the EEO-1 report? The EEO-1 report is conducted annually under the authority of Title VII of the Civil Rights Act of 1964 (as amended). Covered employers must file this report annually, which includes, among other things,  a count of employees by establishment and job category, with race and gender information for every employee. Which employers must file an EEO-1 report? All private employers with 100 or more employees that are subject to Title VII of the Civil Rights Act of 1964, as amended. Some private employers with fewer than 100 employees, if the employer is owned or affiliated with another employer -- or there is centralized ownership, control or management -- so that the employers together legally constitute a single enterprise, and the entire enterprise employs a total of 100 or more employees. Federal contractors that employ 50 or more employees and are prime contractors or first-tier subcontractors and have a single contract, subcontract or purchase order amounting to $50,000 or more. Who are considered “Employees”? The EEO-1 instruction booklet defines “Employee” as any individual on the payroll of an employer who is an employee for purposes of the employer’s withholding of Social Security taxes. This includes full and part-time employees. The definition of “Employee” does not include individuals who are temporarily hired on a casual basis for a specified time, or for the duration of a specified job. How is this data used? The Office of Federal Contract Compliance Programs (OFCCP) reviews EEO-1 data when selecting employers to audit, and may further cross-reference EEO-1 data with a contractor’s affirmative action plan.  Accordingly, federal contractors and subcontractors should pay careful attention to how their EEO-1 is completed. What are common errors with EEO-1 reports? Not preparing a separate report for each establishment, or reporting all employees in the “Headquarter Report.” Not providing notice to the EEO-1 Joint Reporting Committee that the filing employer experienced a merger, acquisition, or spinoff. Failing to include employees who chose not to self-identify race or gender.  An employer is required to report on all “Employees.”  Even if an employee declines to self-identify, the employer must still report both race and gender for that employee.  There is no “unknown” race or gender category.  While self-identification is the preferred means for obtaining race and gender information, employment records or visual identification may be used. Polsinelli continues to monitor the opening date for the EEO-1 and whether there are modifications to the report.Stay tuned to Polsinelli at Work for further updates.

With the posting of 2019 CSAL notices possibly imminent, government contractors should prepare for the fact that a portion (approximately 500 out of 3,500 total) of the OFCCP’s FY 2019 compliance evaluations will be Section 503 focused reviews.  Attached is the scheduling letter that will be used for OFCCP’s focused reviews. Unlike the typical OFCCP audit, a focused review will audit contractor’s compliance with the protections for individuals with disabilities under Section 503 of the Rehabilitation Act.  Because Section 503 compliance has not been the focus of many of OFCCP’s recent compliance audits, it is important that contractors should proactively self-audit to ensure they are in compliance with all of the various requirements of Section 503. If a contractor receives a Section 503 focused review scheduling letter, it will have 30 days to collect and provide OFCCP with an array of information about its Section 503 compliance efforts.  In order to effectively respond to and avoid violations, covered government contractors should review their Section 503 compliance to ensure they have the following for their current affirmative action plan year: ·         A current Section 503 affirmative action plan for individuals with disabilities. ·         An assessment of outreach and recruitment efforts for qualified individuals with disabilities.  This assessment is typically prepared separate from the contractor’s affirmative action plan and some vendors and firms do not include this assessment with the Section 503 affirmative action plans they prepare. ·         The actions taken to audit and measure the effectiveness of the contractor’s Section 503 affirmative action plan.  Like the assessment of outreach and recruitment, this usually is separate from the affirmative action plan and may not have been prepared by your vendor or firm. ·         The statistical data collected and retained by the contractor for the total number of job openings and jobs filled, the total number of applicants hired, the total number of applicants with disabilities hired, and the total number of applicants who identify as individuals with disabilities. ·         The contractor’s utilization analysis, evaluating the representation of individuals with disabilities across its job groups or workforce. ·         The contractor’s reasonable accommodation policies and documentation of any accommodation requests received and how the requests were resolved. ·         The contractor’s assessment of its personnel processes and use of physical and mental qualifications. Also, contractors should be prepared to demonstrate, through a walkthrough, that its facilities comply with federal accessibility requirements. We recommend that contractors contact qualified counsel to make sure they are fully prepared to respond to these focused reviews.

It has been reported that the Office of Federal Contract Compliance Programs (OFCCP) will be issuing Corporate Scheduling Announcement Letters (CSAL) in February. A CSAL is a notice to an establishment that it has been selected to undergo an audit by the OFCCP. CSALs do not initiate an audit – only a scheduling letter can do that.  In the past, a CSAL gave recipients at least 45 days’ notice before receipt of an audit scheduling letter. While in prior years CSALs were mailed to contractor establishments, there is information that new this year the CSAL list will be posted on the OFCCP website only.  Federal Contractors will then need to check the posting to determine whether they have an establishment on the list. In 2018, 1,000 CSAL letters were mailed in February, with audit scheduling letters following in March.  Then a second wave of 750 CSAL letters were sent in September.  It is unknown whether the 2019 CSAL notice will be announced in waves or all at once. The OFCCP website currently has prior year CSAL lists only.  Polsinelli will continue to monitor whether 2019 CSAL list been posted.

On October 18, 2018, OFCCP Acting Director Craig Leen gave a 2-hour presentation at the National Employment Law Institute’s Affirmative Action Update on “What’s on the OFCCP Director’s Desk”. Acting Director Leen rapidly went through four principles that the OFCCP under his leadership will follow: 1. Transparency The OFCCP has already issued several new directives in an effort to promote transparency in the OFCCP’s compliance audit process. The Transparency Directive (2018-08) is a prime example of this effort. Acting Director Leen pointed out that this Directive applies to pending audits to the extent possible and stated that he has told the entire agency to follow it. He went on to say that he wants to see a more collaborative approach between the OFCCP and the contractor at earlier stages of the audit with both sides treating each other with respect and engaging in good faith discussions to work out disputes. As a second example, Acting Director Leen covered the Ombud Service Directive (Directive 2018-09). The OFCCP is working to hire an Ombud as a GS 15 level employee either in the national office or in a teleworking role. This individual will report to the Deputy Director. The purpose of this new role is to give contractors a path to address any concerns at any point in the audit. For example, Acting Director Leen stated that a contractor may contact the Ombud to ask if events in an audit are typical and/or are consistent with OFCCP protocols. The Ombud may answer a question directly or may direct the contractor to the appropriate person within the agency. Until the Ombud is hired, contractors should follow chain of command in the agency to address concerns. Acting Director Leen also pointed to the publishing of the CSAL list Is a further example of transparency. He noted that this was a controversial step, but that he was told by the Solicitor’s Office that every time 3 FOIA requests are received on an item, the OFCCP is required to post it. As long as Acting Director Leen is at the helm, the agency plans to continue to post the CSAL list. The OFCCP plans to adopt more initiatives in this area, such as expanding the help desk, cleaning up and making OFCCP FAQs more usable and issuing opinion letters similar to the Wage and Hour Division. 2. Certainty The OFCCP wants to set expectations for contractors. Acting Director Leen thinks that if contractors will be held accountable, they should know the stakes. One effort in this area is the new Compensation Directive (Directive 2018-05). The OFCCP remains strongly committed to looking for systemic compensation discrimination. Acting Director Leen shared a few new developments in this area including that the OFCCP plans to look at the intersection between race and gender in compensation. For example, they plan to explore whether minority women have a greater pay gap than all women. He also shared plans to look at compensation for individuals with disabilities. Other examples of providing certainty to the contractor community include the Religious Exemption Directive (Directive 2018-03), the Tricare Moratorium Extension, and mandatory use of Predetermination Letters when the OFCCP is alleging discrimination. 3. Efficiency Acting Director Leen commented that it is abusive to hold contractors in audit for long periods of time. To change this, Leen cited as examples the 45-day desk audit in the Transparency Directive and the AAP Verification Initiative (Directive 2018-07). Under the Verification Initiative, it is Acting Director’s goal that contractors will no longer wait for receipt of a CSAL letter before seeking compliance guidance. The OFCCP is also working with the Government Services Administration (GSA) to gain access to the verifications that federal contractors currently make to GSA about their affirmative action plans when bidding for contracts and is exploring the possibility of auditing contractors that answer “no” on whether they have an affirmative action plan and potentially pursuing contractors who answer “yes”, but cannot timely submit an affirmative action plan in an audit. He also discussed a planned proposal that would require every contractor to be audited at least once every five years. 4. Recognition Acting Director Leen discussed the Contractor Recognition Program (Directive 2018-06) as an opportunity to recognize federal contractors who excel at compliance. He also mentioned the Excellence in Disability Inclusion Award, which is currently open for public comment and hinted that additional awards are in the works. Acting Director Leen explained that he has a personal interest in disability inclusion because he has a child with special needs. Contractors should expect some special focus on Section 503 compliance as evidence by the Focused Review Directive (2018-04). While Acting Director Leen has an ambitious “to do” list in front of him, he has already accomplished a lot during his three-month tenure as Acting Director, as evidenced by the steady stream of Directives issued during that period.

A second wave of the Corporate Scheduling Announcement Letters (CSALs) were released to 750 more contractors.  As we previously reported, 1,000 CSALs were mailed in February, with scheduling letters that followed on March 19, 2018. CSALs do not initiate an audit – only a scheduling letter can do that. However, a CSAL notifies a contractor that their establishment is on the scheduling letter list giving the contractor extra time to get their Affirmative Action Program (AAP) ready for submission. The CSAL gives recipients at least 45 days’ notice of a scheduling letter.  Once the OMB approved scheduling letter arrives, contractors only have 30 days to submit their AAP. The supplement CSALs that were recently issued went to 445 companies, 69 CMCEs, and 66 FAAP functional units. The OFCCP has published a list of the CSAL recipients in its FOIA library, which can be found here. The OFCCP explained that it elected to publish this list because it is a frequently requested document and does not fall into any exemption from disclosure. Like with its spring release, the OFCCP has also released its methodology for selecting contractors for this scheduling letter list. The CSALs were sent to the actual facility identified on the OFCCP’s scheduling list and were addressed to “Human Resources Director” or the company’s designated point of contact.  CSALs were not sent to companies who are subject to evaluation by the OFCCP because of a contract award notice or as a result of a consent decree or other ongoing monitoring by the OFCCP. The OFCCP indicated that actual scheduling letters may go out soon. The OFCCP also published a new FAQ that addresses the one-time 30-day extension a contractor may receive for supporting data related to the E.O. 11246, VEVRAA and Section 503 AAPs. A contractor is eligible, provided that it: Requests the extension before the initial 30-day due date for the AAPs; and Timely submits the basic E.O. 11246, Section 503 and VEVRAA AAPs within the initial 30-day period after receiving the Scheduling Letter and Itemized Listing. Contractors should heed the warning in the FAQ that a “[f]ailure to submit AAPs and/or supporting data timely, with approved extensions, will result in an immediate Notice to Show Cause why OFCCP should not initiate enforcement proceedings.” The OFCCP made clear that the additional CSALs were a supplement to the February 2018 scheduling list, which means we can expect a new scheduling list in “early 2019.” Polsinelli will continue to monitor developments and will provide updates as they become available. In the event your organization received a CSAL, we recommend you contact counsel immediately.

On November 30, 2018, the OFCCP made true on OFCCP Acting Director Leen’s comments in October that OFCCP was planning to implement an opinion letter program, issuing the Opinion Letters and Desk Help Directive (2019-03). This Directive is also consistent with the OFCCP’s earlier Transparency Directive covered here. Under this Directive, the OFCCP will implement both a help desk to answer contractor questions and an opinion letter program similar to that in place with the Department of Labor’s Wage and Hour division.  The Directive places some restrictions on the opinion letters: Opinion letters do not establish any legally enforceable rights or obligations Opinion letters should not be used to provide legal advice or to resolve questions that are the subject of ongoing or expected litigation OFCCP should not provide opinion letters to a contractor during the pendency of a compliance evaluation of that contractor’s establishment While the opinion letters do not establish legally enforceable rights or obligations, OFCCP will consider whether a contractor complied in good faith with the guidance provided in opinion letters in determining whether to proceed with an enforcement recommendation in a given matter.

Last Friday, OFCCP issued its first three directives of the 2019 fiscal year. With its new Compliance Review Procedures Directive (2019-01), OFCCP rescinds the Obama administration’s Active Case Enforcement (ACE) Directive (2011-01). ACE brought with it a fundamental shift in OFCCP audits with more focus on deeper dive audits that tended to take longer and impose significant burden and cost on contractors. Among other things, the ACE Directive required OFCCP to increase the frequency of random, mandatory onsite audits. OFCCP’s new Compliance Review Procedures Directive seeks to improve the efficiency of audits and increase the number of audits.  To further efficiency, the Directive requires early proactive corrections to resolve non-material violations. The Directive also clarifies that during an audit OFCCP may limit onsite reviews to the nature and scope of the indicators or concerns identified in the initial desk audit phase. Consistent with other recent directives issued by OFCCP, this new Directive emphasizes transparency. The Directive requires OFCCP to publish its scheduling methodology, much like it did earlier in the year with CSAL letters. The Directive also exempts contractor establishments from audit for 24 months from the date of closure of a neutrally scheduled audit for that establishment, unless OFCCP and the contractor have agreed to a different exemption period.

Following last year’s trend, the Office of Federal Contract Compliance Programs’ (“OFCCP” or “Agency”) website indicates that February 1, 2018, the Agency mailed 1,000 Corporate Scheduling Announcement Letters (“CSALs”). The CSALs do not commence an audit – only a scheduling letter can do that – but they provide an advance courtesy notice that an organization has been identified by the Agency and may receive a scheduling letter for an audit. What does this mean? Organizations that receive CSALs should take the extra time provided to ensure their affirmative action programs and supporting documents are up to date and fully compliant. Organizations should also review their adverse impact data and any potential pay disparities. The CSALs have once again been sent directly to the attention of the Human Resources Director; therefore, it is important to alert HR representatives to watch for the letters. Take note, CSALs are not required by law prior to the issuance of a scheduling letter for an audit, which means federal contractors and subcontractors that do not receive a CSAL may still be scheduled for an audit. Whether an organization receives a CSAL or not, contractors can still receive scheduling letters, which the OFCCP’s website notes will be issued on March 19, 2018.  As a reminder, once an organization receives a scheduling letter, there are only 30 days to respond with the initial submission. Shifting from past practices, the OFCCP will limit audits in 2018 to: No more than 10 establishments of a single contractor placed on the scheduling list; No more than four establishments of a single contractor placed on the scheduling list for a single district office; and No establishment with an audit closed in the last five years is placed on the scheduling list. The OFCCP has not indicated which industries will be targeted, as it has done in past years. Polsinelli will continue to monitor developments and will provide updates as they become available. In the event your organization received a CSAL, we recommend you contact counsel immediately.

The Department of Labor’s (DOL) final rule establishing paid sick leave for employees of federal contractors is effective as of January 1, 2017. The final rule follows President Obama’s September 7, 2015 Executive Order 13706 (the “Executive Order”) on this subject, which we wrote about here. Is Your Organization Covered? The Executive Order and the DOL’s final rule apply to “new” contracts awarded on or after January 1, 2017. Contracts entered into before that date will be considered “new” contracts if the contract is renewed through bilateral negotiation on or after January 1, 2017, or in some cases if the contract is amended or extended. The DOL’s final rule covers four major types of contracts: A procurement contract for construction covered by the Davis-Bacon Act (DBA); A contract for services covered by the Service Contract Act (SCA); A contract for concessions, including any concessions contract excluded from coverage under the SCA by Department of Labor regulations at 29 CFR 4.133(b); or A contract in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public. If Covered, 4 Steps To Take Now If your organization’s contracts are subject to the final rule, consider taking these steps now: A. Make sure your sick leave policy allows for carryover that meets the final rule’s requirements and implement an accrual method if you do not already have one. The final rule requires an employee be allowed to carryover up to 56 hours of leave. The DOL has clarified that if the company uses an accrual method, it can cap accrual at 56 hours. In contrast, the DOL also clarified that if the company provides sick leave to its employees as a lump sum at the beginning of the year, then the company would have to give each employee an additional 56 hours of sick leave each year. B. Make sure your leave policy provides leave for domestic violence. Domestic violence-related leave includes leave for care from a health care provider or for physical or mental conditions arising from domestic violence, as well as leave to obtain counseling, seek relocation, seek assistance from a victim services organization, take related legal action, including preparation for or participation in any related civil or criminal legal proceeding, or to assist certain family members with these actions. C. If state law allows, do not provide for payout of accrued, but unused sick leave.The final rule does not require employers to pay out accrued, but unused sick leave. Employers should note that if the employer rehires an employee within 12 months of separation, the employer must reinstate the employee’s accrued, but unused sick leave balance as it existed on the separation date. D. Consider whether it makes sense to have a PTO policy that includes sick leave or a separate sick leave policy.The DOL has stated that a company’s existing PTO policy could fulfill the requirements of the final rule, but some companies may find it advantageous to have separate policies for sick leave, especially with the varying sick leave requirements under state and local law. For more information on other paid sick leave laws see our earlier blog posts.

The EEOC continues to provide protections from discrimination for the LGBT community. Last week the EEOC issued a new fact sheet on bathroom access rights for transgender employees under Title VII of the Civil Rights Act of 1964 (“Title VII”). The EEOC’s fact sheet follows guidance from the Occupational Safety and Health Commission on this issue, which we addressed last year. The new fact sheet reminds employers of the EEOC’s position that discrimination against a person based on their transgender status violates Title VII, and further, that denying an employee equal access to a common restroom corresponding to the employee’s gender identity is sex discrimination. The fact sheet also states that contrary state law is not a defense under Title VII. While the EEOC’s fact sheet is a statement of the EEOC’s position (not a regulation or statute), employers should consider the EEOC’s position when making policy decisions on restroom availability for transgender employees. The EEOC has filed a number of lawsuitsseeking to protect transgender employees from discrimination, and this new fact sheet indicates the EEOC will continue to enforce such protections. The issuance of the EEOC fact sheet follows passage of a North Carolina law, known as H.B. 2, that limits transgender people’s access to public restrooms. The state law was enacted to invalidate a Charlotte city ordinance that, as of April 1, 2016, would have extended anti-discrimination protections to LGBT individuals and allowed transgender people to use the bathroom of their choice. The battle over this North Carolina law continues to heat up. On Monday, May 9, 2016, the state of North Carolina filed a lawsuit against the federal government seeking a declaratory judgment that H.B. 2 is not discriminatory. That same day, as promised, the U.S. Department of Justice filed a lawsuit alleging that H.B. 2 violates Title VII. You can find a copy of the EEOC’s fact sheet here and further information from the EEOC on enforcement protections for LGBT workers here.

As we head into 2016, it is a good time to review and revise leave and certification policies under the Family and Medical Leave Act (“FMLA”), to limit the risk of FMLA abuse by employees.  Below are nine tips to consider: Conduct an FMLA Audit. Identify FMLA abuse concerns from managers. Give policies, practices and forms to legal to review to make sure your company is following best legal practices. Enforce consequences if the initial certification is not returned within 15 days. All medical certifications are required to be returned within 15 calendar days (unless the leave is unforeseeable and it is not practicable to do so). If the employee fails to return the certification, the employer may deny FMLA leave so long as the employer has advised the employee in writing at the time of the employer’s request for the certification of the consequence of failing to return the certification on time.  Be sure this is enforced uniformly.   Second (and third) opinions. Unfortunately, sometimes an employee’s health care provider will sign off on fraudulent leave requests. In that situation, an employer has the option to seek a second opinion at its own expense. If there is a conflict between the first and second opinions, the employer may require the opinion of a third medical provider at the employer’s expense. Require periodic updates. Managing FMLA leave is easier when employers maintain a line of communication during leave. The regulations allow employers to require “periodic” updates from employees while on leave regarding their intent to return to work, so long as the company communicates this obligation to the employee. Consider implementing a requirement that employees update the employer on their intent to return to work every 30 days. Call-in policies. Implement a policy requiring employees to call-in for time off (including intermittent FMLA leave) in a certain manner. Enforce consequences for failure to follow such policies. Re-Certifications. The FMLA regulations generally allow employers to obtain re-certifications every 30 days, but employers may request them sooner if an employee requests an extension of FMLA leave, the circumstances contemplated in the certification have changed (for example duration or frequency of absences), or the employer receives information that casts doubt on the employee’s need for leave. While an employer may have to wait longer to obtain a re-certification if the duration provided on the previous certification is longer than 30 days, an employer is able to request a re-certification at least every six months. Pay. The FMLA regulations make clear that employees (including exempt employees) need not be paid for periods of FMLA leave, even for partial days.  Consider using a private investigator.  There have been numerous cases where courts have found for an employer when they uncovered abuse through use of a private investigator.   Consider seeking advice of counsel. When in doubt about how to proceed with an employee’s questionable request or exercise of leave, seek advice of counsel. Missteps can be costly and subject employers to claims of interference and retaliation.

On September 10, the Office of Federal Contract Compliance Programs (OFCCP) published a Final Rule prohibiting discrimination for compensation disclosure and discussion.  The Final Rule follows Executive Order 13665, which was signed by the President in April 2014.  The Final Rule amends the existing Equal Opportunity Clause under Executive Order 11246 to prohibit discrimination against an employee or applicant for inquiring about, discussing or disclosing their own compensation or that of another employee or applicant. The Final Rule also requires contractors and subcontractors to add prescribed language to their employee policies. While Section 7 of the National Labor Relations Act (NLRA) already prohibits employers from restricting employee discussion of compensation, there are differences in scope of the restrictions.  Unlike the NLRA, this new Executive Order extends protections to supervisors and managers. The Final Rule includes two defenses to a claim of discrimination for compensation disclosure:  a general defense provision that the OFCCP is referring to as the “workplace rule” and an “essential job functions” defense.  The “workplace rule” allows employers to discipline, discharge or otherwise take adverse action against an employee for violating a work rule, policy or agreement that does not prohibit employees or applicants from disclosing or discussing compensation.  For example, if an employee exceeds a break time while discussing compensation, the employer could discipline or discharge the employee for violating the break time rule, but not for discussing compensation. The “essential job functions” defense protects a contractor from liability for taking adverse action against an employee whose essential job functions include access to compensation data and who discloses such compensation to individuals who do not have access.  For example, a contractor could take adverse action if a human resources employee with access to compensation data disclosed such data.  This defense makes clear that employees with access to their employer’s confidential pay data cannot share such confidential information. Effective Date:  The Final Rule takes effect with the Company’s first new federal contract or modification of an existing contract on or after January 11, 2016.  In other words, the effective date will vary for each contractor. In order to avoid missing the effective date, contractors and subcontractors should consider taking the following action items on or before January 11, 2016. Action Items:  To comply with the new rule contractors and subcontractors should do the following by their organization’s effective date: Update Equal Opportunity Clause in contracts and purchase orders to include non-discrimination for inquiring about, discussing or disclosing compensation. Add a “Pay Transparency Statement” to the contractor’s employee manual or handbook.  Contractors may create a separate standalone policy regarding pay disclosure discrimination or could also add this language to an existing policy.  The language of the statement is prescribed by the OFCCP as follows: The contractor will not discharge or in any other manner discriminate against employees or applicants because they have inquired about, discussed, or disclosed their own pay or the pay of another employee or applicant. However, employees who have access to the compensation information of other employees or applicants as a part of their essential job functions cannot disclose the pay of other employees or applicants to individuals who do not otherwise have access to compensation information, unless the disclosure is (a) in response to a formal complaint or charge, (b) in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or (c) consistent with the contractor’s legal duty to furnish information.

The Department of Labor recently published its final rule amending the definition of “spouse” in the Family Medical Leave Act ("FMLA") regulations to include eligible employees in legal same-sex marriages. Beginning on March 27, 2015, same-sex spouses will be covered under the FMLA if the employee was legally married under the law of any state, regardless of the employee’s state of residency. To view the full alert, click here. To receive Polsinelli L&E alerts direct to your email, click here.