Nondiscrimination Rules for Spouses of Protected Veterans

Here's something else to be mindful of when the Labor Department shows up to perform compliance reviews.

The Labor Department's Office of Federal Contract Compliance Program (OFCCP) released a new directive related to the employment of military spouses, to ensure that federal contractors are not discriminating against spouses of protected veterans.

Protected veteran are those who are disabled, recently separated, active duty wartime or campaign badge, or an Armed Forces service medal veteran.

Military service usually requires multiple and frequent relocation, often creating an employment history that can add challenges to a spouse's ability to obtain and maintain employment and to achieve career goals. While discrimination safeguards for spouses of protected veterans are not new, they can be overlooked. That is why the OFCCP will require its compliance officers to inquire with federal contractors during onsite investigations about their treatment of veteran spouses.

Here are the questions that employees of federal contractors can expect during a compliance examination.

1. Are you a spouse of a protected veteran?
2. Do you have any coworkers who are spouses of protected veterans?
3. Do you have any observations concerning the treatment of spouses of protected veterans?

In addition, the OFCCP's compliance officer (CO) will offer compliance assistance with drafting a written policy and ensure that the contractor understands its obligations with respect to spouses of protected veterans.

The sample compliance policy provided with the new directive reads as follows:

It is [Federal Contractor, Inc.’s] policy not to discriminate because of a person’s relationship or association with a protected veteran. This includes spouses and other family members. Also, [Federal Contractor, Inc.] will safeguard the fair and equitable treatment of protected veteran spouses and family members with regard to all employment actions and prohibit harassment of applicants and employees because of their relationship or association with a protected veteran.

Three Companies Agree to Pay $630 Thousand to Settle Labor Related Violations

The Labor Department has been busy lately prosecuting companies for discrimination, and failing to pay prevailing wages. Last Monday, the Department rolled out three separate press releases detailing the findings of their investigations.

In the first case, a contractor agreed to pay $350 thousand in back wages to 185 female applicants to settle allegations of hiring discrimination found during a routine investigation by the Department's Office of Federal Contract Compliance Programs (OFCCP). The press release doesn't explain exactly what the contractor did to lead to OFCCP's conclusions other than the firm discriminated against females during the hiring process.

In the second case, an investigation by the Labor Department's Wage and Hour Division (WHD) led to a $40 thousand settlement for violating SCA (Service Contracting Act) prevailing wage requirements. The security contractor failed to pay required vacation, holiday, and health and welfare benefits to employees performing work on a FEMA contract. The contractor also violated FLSA (Fair Labor Standards Act) record keeping requirements.

The third case also investigated by WHD, involved a Navy contractor in Honolulu who "erroneously" classified workers as laborers while they performed the duties of more highly skilled and higher paid positions such as boilermakers and painters. As a result, the company failed to pay employees the correct prevailing wages rates under the Davis-Bacon Act (DBA). The company agreed to pay $239 thousand to 47 employees to settle the allegations.

The Labor Department has a solution to falling afoul of its rules and regulations:

Government contractors must familiarize themselves with all employee pay and benefits requirements. The (Labor Department) encourages employers and employees to contact us if they have questions about how workers must be paid for regular and overtime wages, and fringe benefits on federal contracts. They can also consult the numerous resources we offer online to help them understand their responsibilities.

Ah yes, the old "I'm from the Government and I'm here to help you" line.

Company Pays $175 Thousand to Settle Discrimination Allegations

A conciliation agreement is the result of a third party helping parties resolve a dispute. The process is similar to mediation in that a conciliator assists parties to reach an agreed resolution. However, a conciliator also expresses opinions about the merits of the dispute but does not decide the conflicts for the parties. It is useful if one side has unworkable beliefs about the fight; a pro-active approach to the advantages may help resolve the disagreement. The approach is advantageous if both sides want resolution by objective opinions concerning appropriate decision-making, rather than just mediation and settlement (online source).

The Labor Department's Office of Federal Contract Compliance Programs (OFCCP) and Conduent Commercial Solutions have entered into a conciliation agreement by which Conduent, a Federal contractor, has agreed to pay $175 thousand in back wages to resolve claims of systemic hiring discrimination at its Portland, Oregon facility.

During a routine compliance evaluation (note the word 'routine'), the OFCCP alleged (note the word 'alleged') that in 2012, Conduent discriminated against 1,121 female, African American and Asian applicants for its customer care assistant position. That's a huge number of applicants. OFCCP determined, based on its evaluation, that the company's hiring practices violated Federal prohibitions against discriminating in employment based on, among many other things, race.

This case has been going on for seven years and it sounds to us like Conduent was ready to throw some money at the situation and get the matter behind them. Actually, Conduent did not own the company back it 2012. It was part of Xerox. In its own statement on the settlement, Conduent stated that it entered into the agreement in order to "... put these legacy issues behind us." Under the terms of the conciliation agreement, Conduent agreed to pay $175 thousand in back wages and make 138 job offers to original applicants as positions become available. Also, Conduent committed to ensuring that its personnel and hiring practices comply with EEO laws and regulations.

The Labor Department press release did not detail the exact nature of Conduent's activities that gave rise to its allegations. Many of these cases involve insufficient documentation as to why an applicant was not considered for a position.

The full Labor Department press release can be accessed here.

Contractor Agrees to Pay $50 Thousand in Back Wages to Resolve Discrimination Allegations

The Department of Labor has a number of divisions tasked with contractor compliance with various labor laws. In the past few months, we have reported on actions by the Labor Department's Wage and Hour Division (WHD) to ensure compliance with primarily the Davis-Bacon Act and the Service Contracting Act. Where violations (or noncompliances) are found, contractors usually agree to make up for shortages in wages and fringe benefits. Occasionally, especially in the case of repeat offenders, the WHD can take more drastic action such as 'debarment' where, for a period of time, recalcitrant contractors can no more Government contracts.

A second Labor Department division tasked with compliance is the Office of Federal Contract Compliance Programs (OFCCP). This division, as the name implies, is only interested in Government contractors and grantees. Its primary focus is not a law at all but an Executive Order (EO No. 11246) which prohibits federal contractors and federally-assisted construction contractors and subcontractors, who do over $10 thousand in Government business in one year from discriminating in employment decisions on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin. The EO also requires Government contractors to take affirmative action to ensure that equal opportunity is provided in all aspects of their employment.

Most of the compliance evaluations performed by OFCCP are routine, probably randomly selected, however there is nothing to prevent the Office from following up on leads and/or hotline complaints.
Recently, after a routine compliance evaluation of a federal contractors subsidiary of Cummins Diesel, the contractor, Consolidated Diesel Inc. agreed to pay $50 thousand in back wages for 'alleged' pay discrimination against African-American managers at its manufacturing facility. OFCCP alleged that since at least 2013, Consolidated Diesel paid 11 African-American managers less than white managers in similar roles.

Fifty thousand dollars for eleven employees over a six year period is not a lot of money. That amount works out to an average of $63 per month. Consolidated Diesel did not admit liability however agreed to pay it to resolve OFCCP's alleged discrimination findings. Consolidated Diesel also agreed to take steps to ensure that its pay practices meet the legal requirements.

Labor Department Looking Into Discrimination at Law Firms

The substance of the following post come from an article published by Bloomberg Law on April 10th.

The Labor Department's Office of Federal Contract Compliance Programs (OFCCP) plans to take a closer look at diversity and discrimination at law firms. According to OFCCP's Director, "There is a big problem at law firms for women and women of color. Law firms need to get their houses in order". Six lawyers at one large law firm sued the firm alleging female attorneys are systemically paid less than their male colleagues for the same work. Similar lawsuits have been filed against two other large law firms.

The OFCCP enforces pay, hiring, promotion, and other discrimination protections for workers employed by Government contractors. Enforcement is done primarily through random audits but are also initiated when there are whistleblower or hotline complaints. Several national law firms were among the 3,500 Government contractors notified by OFCC that they could be selected for random audits in fiscal year 2019.

According to OFCCP, the issue of promotion will be a key focus of future reviews, not only at law firms but also financial firms, universities, and tech companies. It seems like the OFCCP has already reached foregone conclusions. The agency stated that discrimination and paid family leave issues are likely to blame for the relatively low share of female partners in many firms. Really? Perhaps they should perform their audits first and then report on the results.

Some firms that do business with the Government argue that OFCCP has no jurisdiction to investigate potential discrimination against partners since partners are consider owners of the firm and not employees. OFCCP counters this arguments by saying they have jurisdiction over employees who are not being promoted.

The OFCCP also intends to look at contractors for possible discrimination against workers with disabilities. OFCCP's director stated that the average law firm has no disabled partners.

Government Contractor Pays $250 Thousand to Resolve Discrimination Allegations

The Labor Department's Office of Federal Contract Compliance Programs (OFCCP) just reached a settlement with a Government contractor that will require the company to pay back pay and interest to settle hiring discrimination.

It all began in 2011 with a routine OFCCP compliance evaluation at GEO Group, a company specializing in privatized corrections, detention, and mental health treatment at its Joe Corley Detention Center. The OFCCP found that GEO systematically discriminated against female correctional officer applicants which, of course, is a violation of federal statutes prohibiting federal contractors from discriminating based on sex.

The settlement totaled $250 thousand and in addition to the back pay, GEO will provide job opportunities to 22 affected female applicants as correctional officer positions become available. Additionally, the contractor committed to taking steps to ensure its personnel practices, including record-keeping and internal auditing procedures, meet legal requirements.

The press release announcing this settlement did not detail specifically what GEO did that rose to the level of hiring discrimination. The fact that (i) it took about eight years to settle and (ii) it was a result of a routine audit rather than a complaint or whistleblower, indicates to us that the Government's position was not "slam-dunk". Perhaps the problem was one of record-keeping deficiencies where the contractors could not demonstrate based on records that it did not discriminate. Perhaps also the $250 thousand settlement was a business decision by GEO to get the Government off its back.

Labor Department Announces New Voluntary Compliance Program

The Labor Department's Office of Federal Contract Compliance Programs (OFCCP) announced yesterday a new voluntary enterprise-wide compliance program for high-performing Government contractors. Acceptance into the program means your company won't be audited for compliance with laws prohibiting discrimination on the basis of race, color, religion, sex, sexual orientation, gender identity, national origin, disability or status as a protected veteran for at least five years.

OFCCP conducts compliance evaluations and has recently expanded the number of reviews performed. However, the number of evaluations conducted annually covers a fraction of the total number of contractors that fall within OFCCP's jurisdiction. This new voluntary compliance program for high-performing contractors is intended to free up limited OFCCP resources for compliance effort at contractors who do not meet the high-performing criteria. Contractors that meet the top-performing criteria will be removed from the pool of contractors scheduled for compliance evaluations.

Here's some key elements of the program:

• It's voluntary
• It will recognized two tiers of contractors - a top tier and a tier that needs more assistance in becoming a top tier.
• Contractors must apply to the program.
• During the application process, OFCCP will perform a compliance evaluation.
• To participate, contractors will demonstrate that they meet established criteria that verifies not only basic compliance with OFCCP's requirements, but a demonstrated commitment to and application of successful programs on a corporate-wide basis.
• To remain in the program, contractors are expected to maintain a workforce free of discrimination or other material violations, and provide periodic reports and information to OFCCP through which OFCCP can confirm these efforts.

Decisions, decisions. Will contractors want to enter the voluntary compliance program with the guarantee of a compliance evaluation at the beginning and on-going reporting requirements or take their chances that they may be one of the unlucky ones selected for a periodic compliance review. 

Read the Labor Department Directive creating the voluntary compliance program here.

OFCCP's Help Desk

The Labor Department's Office of Federal Contract Compliance Programs (OFCCP) mission is to protect workers, promote diversity. It performs audits of companies with Federal Government contracts to ensure compliance with requirements to take affirmative action and to not discriminate. We have written about the Office several times in past year or so, usually in the context where the Office has taken punitive action against a contractor for failing to follow a law or regulation.

OFCCP issued a new directive last week (see Directive 2019-03) for the purpose of providing compliance assistance and guidance in a manner that employees and employers can easily access and reasonably rely upon as they seek to understand their rights and obligations.

Specifically the OFCCP is enhancing its existing "Help Desk" which will allow contractors to make inquiries by phone or email regarding a variety of topics. Think of it as a "knowledge base". The OFCCP wants to make certain Help Desk inquiries and responses dynamically available and searchable as a self-service option on OFCCP's website. This self-service option would allow contractors (or contractor employees) to benefit from prior inquiries and lead to greater efficiencies in OFCCP Help Desk operations.

OFCCP also plans to incorporate the use of opinion letters as part of guidance to employers, employees and the public. It hopes that by making fact-specific guidance in opinion letters about OFCCP's jurisdictional coverage or application of regulations or guidance will provide more certainty about how the Agency exercises its authority.

Any one having experience using "knowledge base" information to solve a problem knows full well that solutions can be difficult to find and even then, are not sufficient or specific enough to take "bullet proof" actions. Let us know your experiences.

Too Many Minority Employees?

We wonder how many companies survey their workforce and think that there is no way they could be in noncompliance with any form of employment discrimination. They might conclude that since they employ a ton of this minority and a ton of that minority and plenty of women employees, what could go wrong? Plenty, as one Government contractor found out. If you're a Government contractor, beware of "routine compliance evaluations" by OFCCP (Labor Department's Office of Federal Compliance Programs).

During one such "routine evaluation", the OFCCP observed that a Government contractor, Oldcastle Building Envelope (Oldcastle) seemingly had a significant ratio of make Hispanic employees. Upon further evaluation, the OFCCP determined that Oldcastle was discriminating against white, black, and female applicants in favor of Hispanic males. OFCCP found that Oldcastle's hiring practices violated relevant Federal laws which prohibit federal contractors from discriminating in employment based on race, national origin, religion, or gender.

What was the penalty for this violation? Oldcastle must pay $395 thousand in back wages and interest to "eligible class members" - presumably those who had applied but were turned down for employment based on discriminatory practices. Additionally, the company had to agree to provide job opportunities to 38 affected white makes, black males and female applicants as positions become available. Thirdly, Oldcastle must take steps to ensure its personnel practices, including recruitment, record-keeping, and internal audit procedures, comply with laws. Finally, Oldcastle must conduct anti-discriminatory training for its HR (human resources) training.

The Oldcastle settlement was the result of a routine evaluation. In other words, there was not whistleblower involved or anything else that might draw the OFCCP's attention to this company. OFCCP also actively solicits whistleblowers to come forward and report allegations of discriminatory hiring practices.

Labor Department Scheduling Hundreds of Compliance Audits for Nondiscrimination

The Office of Federal Contract Compliance Programs (OFCCP) is part of the Labor Department and is responsible for ensuring that employers doing business with the Federal Government comply with the laws and regulations requiring nondiscrimination.

Late last month, the OFCCP announced two directives focused on providing more transparency in its activities as tools for promoting compliance.

1. Transparency in compliance activities. Over the last several months, OFCCP has taken several steps to improve transparency, cooperation, and communication with federal contractors. A new directive further extends OFCCP's transparency initiative to every stage of a compliance evaluation to facilitate consistency, improve efficiency and collaborative resolution, and also supports contractors' ability to conduct meaningful self-audits to proactively identify and address issues with their employment practices. You can read the full directive here.
2. Ombuds Service. The GAO (Government Accountability Office) found in a 2016 report that contractors were not using OFCCP compliance assistance because doing so would call attention to them and possibly make them a target for future OFCCP enforcement actions (do  you think?). OFCCP believes this perception can erode confidence and trust in OFCCP to effectively carry out its mission. A new initiative establishes a mechanism through which contractors can share their concerns about a particular open matter or provide general feedback or recommendations to improve the administration of the agency. You can read the full directive here.

Also, as part of OFCCP's initiative toward more transparency was the release of the names of contractors it intends to audit in the upcoming year. Actually there are two lists, one group of contractors selected last January and the other group selected last September. These lists are purportedly posted on OFCCP's official website but we were unable to locate them. The lists are available elsewhere on the Internet and easily found by searching. There are hundreds of names on these lists - contractors appearing on these lists have already been notified by OFCCP of the impending compliance audit..

Department of Labor Announces Plans to Audit 1,000 Government Contractors

The Department of Labor, Office of Federal Contract Compliance Programs (OFCCP) sent out notices last week to 1,000 lucky Government contractors that they will be audited for compliance with all kinds of labor related rules and regulations such as EEO, affirmative action, veterans, disabilities, and many others.

These Corporate Scheduling Announcement Letters (CSALs) are notification to contractors that they have been selected to undergo a compliance evaluation during the scheduling cycle. The purpose of the CSALs is to give contractors a head start in ensuring compliance; to provide the contractor's internal EEO staff at least 45-days advance notice to obtain management support for EEO and self-audit efforts, to encourage contractors to take advantage of OFCCP compliance assistance offerings, to encourage contractors to focus on self-audit efforts that, if problems are adequately analyzed and corrected, saves OFCCP time and resources needed for its own audit, and to assist contractors in managing and budgeting the amount of time required for evaluation activities.

Compliance reviews are comprehensive analyses of the hiring and employment practices of Federal contractors, the written affirmative action program and the results of the affirmative action efforts undertaken by the contractor. Compliance reviews are typically performed in one or more of these stages; a desk review, an onsite review and an offsite analysis.

The OFCCP will be looking for statistical and anecdotal evidence of discrimination, indicators of potential discrimination such as patterns of individual discrimination, patters of systemic discrimination patterns of major technical violations such as record-keeping deficiencies or failure to maintain an affirmative action plan (AAP), and noncompliance with other labor and employment laws that may related to violations of the laws enforced by OFCCP.

Two areas of recent focus has been (i) pay equity to eliminate pay differences between women and men and (ii) compliance with VEVRAA (Vietnam Era Veterans' Readjustment Assistance Act). For both areas, there are extensive record-keeping requirements.

 Sometimes these CSALs do not get to the right departments within contractors in a timely manner. If you want to find out for sure whether you are one of the 1,000 contractors selected (that is, find out before they show up at your door), you can call the OFCCP at 800-397-6251.

New Nondiscrimination and Affirmative Action Requirements for Contractors

The Department of Labor's Office of Federal Contract Compliance Program (OFCCP) has proposed new regulations that will require "covered" Federal Government contractors and subcontractors and federally assisted construction contractors and subcontractors to ensure nondiscrimination in employment on the basis of sex and to take affirmative action to ensure that applicants are employed, and treat employees are treated during employment, without regard to their sex.

Now at this point, you might be thinking ho-hum, this requirement has been around forever. Not really. The main purpose of these new regulations is to implement the President's Executive Order (EO) 13672 from last July. That EO, for the first time, added sexual orientation and gender identity as prohibited bases of discrimination.

The EO prohibits contractors from discriminating in employment on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin. It also requires contractors to ensure equal employment opportunity for employees and applicants for employment without regard to those attributes. It goes further in requiring contractors to take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to the race, color, religion, sex, sexual orientation, gender identity, or national origin.

So, who is to be covered under these new regulations? Practically everyone. The requirements apply to any business or organization that holds a $10,000 contract or contracts totaling more than $10,000 in a 12-month period. The penalties for violating the EO and the forthcoming rules are substantial. A contractor in violation may be subject to suit for make-whole and injunctive relief and to having its contracts canceled, terminated, or suspended or to debarment after the opportunity for a hearing.

These new rules are intended to advance the employment status of female employees of Federal contractors in several ways. First, the rules address both quid pro quo and hostile-environment sexual harassment. Second, they clarify that adverse treatment of an employee because of gender-stereotyped assumptions about family care-taking responsibilities is discrimination. They clarify that childcare leave must be available to fathers on the same terms as they are to mothers. And finally, the rules will also confirm the requirement that contractors provide equal retirement benefits to make and female employees, even if doing so costs more for one sex than the other.

Quite possibly the most significant and costly aspect to this new rule concerns compliance. In this regard, contractors have affirmative duties to maintain data, conduct internal reviews, and monitor pay practices for potential discrimination, as well as comply with the ban on discrimination in the payment of wages, salaries, and other forms of compensation. Read that again. "Contractors have affirmative duties to maintain data, conduct internal reviews, and monitor pay practices ..."

If you care to read the new 100 plus page draft of the new rules, you may do so by clicking here.