Government Contractors

transgender1600Yesterday, February 22, 2017, the Trump Administration rescinded Department of Justice (DOJ) and Department of Education (DOE) guidance that had been issued to schools on May 13, 2016 in the form of a “Dear Colleague” letter.  The letter stated that it was the DOJ’s and DOE’s interpretation of Title IX (the federal law prohibiting sex discrimination in education) that schools must allow transgender students to use the gender-specific bathroom with which they identify and that schools could not force students to use bathrooms based on their biological sex.  The DOJ and DOE stated that schools that did not follow the guidance could risk losing federal funding. Continue Reading Trump Administration Rescinds Transgender Student Guidance – What Does This Mean for Employers?

As those companies who are required to submit an EEO-1 form know, the extended deadline for the annual submission this year (2015) is coming up soon – October 30 (Normally it’s September 30 each year). Generally speaking, covered employers must report on the form, by establishment/company totals and job group (e.g. first level officials and managers, professionals, administrative support employees, etc.), the number of employees by sex and race or ethnic category. The Equal Employment Opportunity Commission requires most private employers with 100 or more employees to submit the EEO-1 form, while the Office of Federal Contract Compliance Programs requires most government contractors with 50 or more employees and $50,000 or more in federal contracts to submit this form.

Originally on the EEO-1 form, multi-racial employees had to be designated a single racial or ethnic category. For example, an individual who had a Black father and a White mother would have to be identified as solely White or solely Black. In 2005, however, the EEO-1 form was revised to include new racial and ethnic categories, including “Two or More Races.” This change was entirely appropriate in our increasingly multi-racial society, and permitted a more accurate reflection of the racial makeup of a company’s workplace.

But what about sex? There has been a lot of recent media attention to gender identity issues (in case you’ve been living in a cave) – and the choice of gender identity is apparently far broader than I could have possible imagined. As Slate reported, in July, Facebook began allowing its users to self-identify as other than just “male” or “female.” In fact, Slate counted 56 options!!! (Whaaaaat?!!!  Naïve me.) Many of these terms were ones that I had never heard of before – agender/neutrois, gender questioning, intersex, non-binary, pangender, two-spirit….

Continue Reading Two or More Genders? Gender Identity and the EEO-1 Form

On Labor Day 2015, President Obama issued an Executive Order that requires certain government contractors and subcontractors to provide up to 7 days of paid sick leave per year. This leave may be used for illness or injury; medical appointments or treatment; caring for an injured or ill family member, or obtaining medical treatment for them; and, in cases involving domestic violence, sexual assault or stalking, to obtain counseling, seek relocation, seek assistance from a victim services organization, take legal action, or to assist a family member with regard to any of these actions. This requirement will be effective for all contracts entered into or renewed on or after January 1, 2017. (More pain for government contractors…)

Along with the Executive Order, the White House also issued a Fact Sheet: Helping Middle-Class Families Get Ahead by Expanding Paid Sick Leave. According to the Fact Sheet, the Executive Order will extend paid sick leave to 300,000 workers on federal contracts and subcontracts. The White House contends that this action will “improve the health and performance of employees,” will make (sub) contractors competitive by bringing their benefits packages in line with leading firms, and will protect the public health by allowing employees with communicable diseases to remain home.

The Fact Sheet also notes that President Obama is urging Congress to pass the long-languishing Healthy Families Act, which would require all employers with 15 or more employees to provide paid sick leave. Because it is unlikely to pass (snowball’s chance in hell, really), President Obama also specifically called upon cities and states to pass sick leave laws.

Here in Maryland, President Obama’s call is falling on receptive ears in the Maryland General Assembly. A paid sick leave bill has been proposed for the past several sessions, and has gained traction each year, but ultimately has not made it out of the House Economic Matters Committee. In response to the Executive Order, the Chairman of the Committee, Representative Dereck E. Davis was quoted by the Washington Post, in an article on Prince Georges County’s attempt to pass a paid sick leave law, as stating, “I think [sick leave is] a bill whose time has come … I think it would be best if we had one bill that governed everyone in the state, but that does not mean that if the locals want to do something stronger, they are definitely encouraged to do so.” According to the Washington Post, Delegate Davis is “committed to using all his power to push a bill out of the House this session.”

As I previously blogged, there are substantial costs and other non-monetary impacts on employers resulting from a paid sick leave mandate. If the state law passes this year, as many people expect it to do, I believe there will be unintended negative consequences for those workers the law is intended to help, as employers seek to deal with the increased costs of doing business in Maryland.

 

Contractors are still reeling from the many executive orders coming from President Obama in the last year or so, including raising the minimum wage for federal contract employees to $10.10, requiring contractors to disclose labor law violations, demanding pay transparency and the reporting of compensation, prohibiting discrimination on the basis of sexual orientation or gender identity, and more. Now, the New York Times has reported that President Obama has drafted an executive order to force federal contractors and subcontractors to issue paid leave to employees who are sick, are seeking medical attention, or need to care for a sick relative. The online article, which appeared in print today, can be found here. This proposed paid sick leave order is another action that will have a dramatic and costly impact on contractors.

The draft executive order is exceptionally broad in coverage. According to the New York Times, the draft executive order sets a minimum of 56 hours a year of paid sick leave (7 days). The leave would cover not only the employee’s illness, but also caring for a child, parent, spouse, domestic partner, or “any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.” It would also apply to absences from work resulting from domestic violence, sexual assault or stalking, if that time was used to seek medical attention, obtain counseling, seek relocation assistance from victim services organizations or prepare civil or criminal proceedings. In addition, unused paid leave will accrue, year after year.

At this point, no actual date for the issuance of the Executive Order has been announced, and the draft order itself apparently has been marked “deliberative and pre-decisional.” The New York Times reports, however, that the Labor Department was to have approved the Order and sent it to the White House as of 2 p.m. on Wednesday, August 5, thereby indicating some urgency to the matter.

We will keep you posted on any further developments.

On July 31, 2014, the President issued an Executive Order entitled, “Fair Pay and Safe Workplaces,” which will make an employer’s record of compliance with federal and state labor laws a criterion for successful bidding on government contracts and subcontracts exceeding $500,000.  In a Fact Sheet accompanying the Executive Order, the White House described it as an effort to prevent contractors who obey the law from being underbid by unscrupulous contractors.  Even for scrupulous contractors, however, the Executive Order will add new burdens.

Reporting of Labor Law Violations.  To permit the government to assess a contractor’s record of compliance, the regulation requires covered contractors to report “administrative merits determinations,” arbitration decisions and court decisions involving certain federal labor laws or their state law counterparts for the three-year period preceding the contract bid. Contractors are required to obtain and report this information for many of their subcontractors as well.  Serious, repeated, willful or pervasive violations of labor law will disqualify a contractor from a bid, under criteria to be set forth by the Federal Acquisition Regulatory Council.  After a federal contract or subcontract has been awarded, the contractor must update the list of violations every six months, for itself and its subcontractors.

The term, “administrative merits determination,” does not appear in federal law and it not clear whether or not it includes EEOC cause findings (we think it does not).  Because settlements do not need to be reported, the Executive Order also puts additional pressure on employers to settle disputes.  Indeed, that is an announced purpose of the Executive Order.  The White House Fact Sheet states, “The new process is structured to encourage companies to settle existing disputes, like paying back wages.”

The 14 federal laws listed in the regulation are The Fair Labor Standards Act, The Occupational Safety and Health Act, The Migrant and Seasonal Agricultural Worker Protection Act, the National Labor Relations Act, the Davis-Bacon Act, The Service Contract Act, Executive Order 11246 (equal employment opportunity and affirmative action plans for government contractors), Section 503 of the Rehabilitation Act, The Vietnam Era Veterans Adjustment Assistance Act, the Family and Medical Leave Act, Title VII of the Civil Rights Act of 1964, The Age Discrimination in Employment Act, and Executive Order 13658 (establishing a minimum wage for contractors).   Notably missing from the list are immigration laws.

Anti-arbitration Provision.  For contracts and subcontracts in excess of one million dollars (apart from commercial items or off-the-shelf items) the Executive Order bars predispute arbitration agreements covering discrimination claims under Title VII and torts arising out of assault and harassment.  This ban on arbitration does not apply to collective bargaining agreements, agreements to arbitrate voluntarily reached after the dispute arises, or arbitration agreements entered into before the contractor bids on a federal contract (except if the contractor has the right to change the arbitration agreement).

Pay Disclosures.  The Executive Order requires contractors and subcontractors to provide employees, in each pay period, a statement of the employee’s hours worked, overtime hours, pay and additions to and deductions from pay.  This requirement appears to be largely duplicative, since state wage payment and collection laws normally require employers to issue pay stubs.  Under the Executive Order, the employer need not provide hours worked to employees who are exempt from overtime, if it informs them of their overtime exempt status.  If an individual is working as an independent contractor, the contractor or subcontractor must inform that individual in writing of his status.

The Executive Order is not effective immediately.  It will become effective when final implementation rules are issued by the Federal Acquisition Regulatory Council, which is expected in 2016.

If previous experience is a guide, implementation of the Executive Order is likely to be problematic.  Currently, various agencies each focus on enforcement of a particular labor law.  Even with specialized enforcement, the government has trouble completing timely and competent investigations of particular claims.  The investigations often suffer from inexperienced investigators, changing legal standards, and political motivations.  The Executive Order ups the ante, by putting an employer’s ability to bid on government contracts in the hands of agency staffers who will be expected to assess the quality of the employer’s compliance with 14 different laws, and their state law counterparts, over a three year period.  Even if the government can properly administer the Executive Order it will impose, at the least, additional data collection and reporting requirements and another level of bureaucracy.