In This Edition: 2014 Executive Orders Focus on Labor Issues

Transcription

1 In This Edition: 2014 Executive Orders Focus on Labor Issues Presented by: David Robbins, Chair, Government Contracts and Grants Practice (301) ,

2 Introduction Substantial labor requirements for government contractors and subcontractors (together, contractors ) Specific plans and programs, pay rates, and antidiscrimination rules a reality for contractors 2014 Presidential Year of Action includes Executive Orders changing and increasing labor requirements for contractors This brief update will: Outline the new rules Cover the reach and limits of contractor compliance obligations 2

3 The Basics Office of Federal Contract Compliance Programs ( OFCCP ), reporting to the Secretary of Labor, has as its mission to enforce, for the benefit of job seekers and wage earners, the contractual promise of affirmative action and equal employment opportunity required of those who do business with the Federal government. Basic Responsibilities of Government Contractors, as regulated by OFCCP Nondiscrimination in employment EEO-1 Report Filing (> 50ppl) OFCCP Access Job Postings No Retaliation Affirmative Action (>$50K/50ppl) Vets 100/100A Report (>$100K) Notices/Posters Reasonable Accommodation 3

4 What Contractors Are Subject to OFCCP Enforcement/Oversight? Dollar Thresholds, Size of Business, and Contract Types Matter. Common Thresholds: $10,000 in contracts; $50,000 in contracts; 50 employees Contract Type Can be Confusing: Supply and Service Contracts: Subject to OFCCP enforcement. These contracts cover purchase/sale/use of supplies and services. Can be for personal property, real property or for services. Construction Contracts: Subject to slightly different requirements, but are subject to OFCCP enforcement. These contracts cover constructions services directly to the Executive Branch. Federally Assisted Construction Contract: These contractors may not discriminate, but may have fewer requirements such as not needing written Affirmative Action plans. These contracts are for construction projects backed by federal grant, loan, insurance or guarantee. 4

5 New Developments New Minimum Wage: E.O raises minimum wage to $10.10 per hour Pay Transparency: E.O permits open conversations about pay/compensation without reprisal LGBT Equality: E.O forbids discrimination based on LGBT preference/status or gender identity. Labor Violation Reporting: E.O requires contractors to report violations of various laws and regulations (including relating to discrimination, hiring, and compensation) that occurred over previous three years. 5

6 New Minimum Wage E.O The new contractor minimum wage on January 1, 2015 will be $10.10 per hour on covered contracts, generally including: Procurement contracts for construction subject to Davis-Bacon Act Service contracts covered by the Service Contract Act ( SCA ) Concessions contracts, including those excluded from the SCA Contracts in connection with Federal property or lands and relating to offering services for Federal employees, their dependants, or the general public. Workers entitled when (1) they are entitled to the Fair Labor Standards Act minimum wage; (2) they are service employees entitled to prevailing wage under SCA; or (3) they are laborers or mechanics entitled to Davis-Bacon Act wage. Helpful Hint: Seek price adjustments on existing contracts and watch proposal pricing. Prevailing wage rates may not be updated in time compliance risk. 6

7 Pay Transparency E.O The Executive Order prohibits contracts from discriminating or retaliating against employees or applicants for discussing compensation with one another. The stated purpose is to enhance employees ability to detect and remedy unlawful discriminator practices. Note: Is a separate proposed rule for reporting pay. This E.O. is still in the rulemaking process. Proposed rule issued September 15, Key aspects of the Notice of Proposed Rulemaking are: Contractors may not discharge or discriminate against employees or applicants who inquire about, discuss, or disclose their compensation or the compensation of other employees or applicants. The nondiscrimination provisions need to be incorporated into existing employee manuals and handbooks, and disseminated to employees and job applicants. Provides employers with defenses based on enforcing rules against disruptive behavior, and based on essential job functions (e.g., HR employee cannot disseminate lists of everyone s pay). Helpful Hint: Be aware of the rulemaking process and ready to made manual/hiring process updates. 7

8 LGBT Equality E.O The Executive Order prohibits discrimination based on LGBT preference/status or gender identity. Updates gender identity as a protected class Adds prohibitions on discrimination against individuals on the basis of sexual orientation and gender identity. Helpful Hint: Consider whether any additional training is needed for your workforce. 8

9 Reporting Violations E.O This wide-ranging Executive Order requires companies seeking contracts of $500,000 or more to disclose any merits decision, arbitral award or decision, or civil judgment (e.g., not just claims, but decisions) against the prospective contractor in the preceding three years for violations of specific federal laws and of certain state laws to be defined during rulemaking. Will apply to subcontractors for non-cots items at the same dollar threshold. Violations of the following laws will need to be reported, along with explanations of steps taken to mitigate the violations: FLSA, OSHA, MSAWPA, NLRA, Davis- Bacon, SCA, EO 11246, EO 13658, Section 503 of the Rehabilitation Act of 1973, VEVRAA, FMLA, Title VII, ADA, ADEA and equivalent state laws to be defined in rulemaking. (cont d) 9

10 E.O Continued Violations and explanations must be considered by contracting officers Violations will be referred to enforcement agencies Contract-specific non-responsibility determinations (ineligibility decisions) and suspension/debarment action is likely Helpful Hint: Now is the time to update policies and procedures and reemphasize compliance. By the time the rulemaking is final, years of adequate performance will blunt efforts to suspend/debar or not award because of violations. Waiting may result in insufficient mitigation that appears to your customers as too little, too late. Shulman Rogers has Labor and Employment lawyers, Government Contracts and Grants lawyers, and a former Suspending and Debarring Official (acting) on staff to assist if needed. 10

11 Overview of OFCCP Jurisdiction The contract/subcontract triggers the obligations and enforcement jurisdiction by OFCCP. Once a business unit must comply, the presumption is the entire company/organization also must comply and be subject to enforcement jurisdiction (known as single entity status, see next slide for more). Purposeful creep into other areas of federal contracting from OFCCP in the news recently (e.g. push into TRICARE leads to backlash and earlier this year a five-year moratorium on enforcement of affirmative obligations of TRICARE subcontractors) 11

12 Single Entity Analysis Five-factor single test in determining whether OFCCP enforcement and compliance obligations stretch across an enterprise: Do the entities have common ownership? Do the entities have common directors and/or officers? Does one entity have de facto day-to-day control over the other through policies, management or supervision of the entity s operations? Do the personnel policies of the entities emanate from a common or centralized source? Are the operations of the entities dependant on each other (e.g., are services provided principally for the benefit of one entity by another and/or both entities share management, offices or other services)? (cont d) 12

13 Single Entity Analysis - continued The Single Entity Test focuses on whether the ownership, management and operations of the separate entities are, in fact, sufficiently interrelated to warrant treating them together as a single entity. Navigating the test, desk audits and visits can be challenging. Requires up-front planning, common-sense separations within the organization and an audit-ready binder of materials. Helpful Hint: Advance planning and audit readiness is highly helpful. Shulman Rogers lawyers have helped plan for, and pass, these audits for our clients. How can we help? 13

14 Shulman Rogers POCs Government Contracts and Grants Practice David Robbins, Chair, (301) Ralph Pope, Counsel, (301) Laura Baker, Associate, (301) Labor and Employment Practice Gregory Grant, Chair, (301) Meredith Campbell, Co-Chair, (301) Joy Einstein, Associate, (301)