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In revised EEO-1 proposal, EEOC missed opportunity to increase utility, decrease burden, expert explains

August 12th, 2016  |  Cynthia L. Hackerott  |  Add a Comment

In the EEOC’s recent revision of its proposal to add the collection of summary pay data to the EEO-1 Report, the agency has declined to adopt some stakeholder recommendations that could have simultaneously increased the utility of the proposed information collection and decreased the burden on employers, according to attorney Mickey Silberman, a Principal in the Denver, Colorado, office of Jackson Lewis P.C. Moreover, despite the proposed new data collection, the agency would still lack the necessary data to precisely and accurately identify potential pay discrimination and then use those results to correctly target employers for investigations and audits, he said. Silberman further stated that the revised proposal does not adequately address confidentially concerns raised by some employers in response to the original proposal.

The agency published its original proposal in the Federal Register on February 1, 2016 (81 FR 5113- 5121), and the comment period for that original proposal closed on April 1, 2016. The revised proposal was published in the Federal  Register on July 14,  2016 (81 FR 45479-45497), and public comments are due by August 15, 2016.

Current reporting obligations. Federal regulations require that all employers in the private sector with 100 or more employees, and some federal contractors with 50 or more employees, annually file the Employer Information Report, commonly known as the EEO-1 Report, with the Joint Reporting Committee (a joint committee consisting of the EEOC and the OFCCP) by September 30. The current EEO-1 Report data provides the federal government with workforce profiles from private sector employers by race, ethnicity, sex, and job category. In its revised proposal, the EEOC refers to this data as “Component 1.”

Proposed changes. In both the original and revised proposals, which the Commission says were made in partnership with the OFCCP, the EEOC proposes adding aggregate data on pay ranges and hours worked to the form, in addition to the Component 1 data. The revised proposal refers to this added data collection as “Component 2.” The new information would be reported across 10 job categories and by 12 pay bands and would not require the reporting of specific salaries of each individual employee. Federal contractors with 50-99 employees would not report pay data but would continue to report ethnicity, race, and sex by job category. Consistent with current practice, non-contractor employers with 1-99 employees and federal contractors with 1-49 employees would not be required to file the EEO-1 Report.

Under the revised proposal, the due date of the 2017 report would move from September 30, 2017 to March 31, 2018, to simplify employer reporting by allowing employers to use existing W-2 pay reports, which are calculated based on the calendar year. Employers would use Box 1 of Form W-2 (W-2 income) as the measure of pay for Component 2 of the EEO-1 Report.  By definition, W-2, Box 1 includes income that is received between January 1st and December 31st of the relevant calendar year. The revised proposal would also change the “workforce snapshot” to a pay period between October 1st and December 31st of the reporting year, starting with the EEO-1 Report for 2017.

Notably, the reporting schedule for 2016 EEO-1 Report remains unchanged. EEO-1 respondents must comply with the September 30, 2016, filing requirement for the currently-approved EEO-1, and must continue to use the July 1st through September 30th workforce snapshot period for that report.

Expert insight. Silberman, the Chair of the Jackson Lewis Affirmative Action & OFCCP Defense Practice Group and the Co-head of the firm’s Pay Equity Resource Group, provided his insights on the revised proposal in the following interview with Employment Law Daily:

ELD: While the EEOC made a few changes to its original proposal in light of stakeholder concerns, the agency did not adopt many stakeholder recommendations. Which of these do you think are the most important to employers?

Silberman: The most important, and one rejected by EEOC, is a change to the requirement to submit W-2 earnings data and work hours, rather than annualized base salary or hourly pay rate, recommended by so many stakeholders who submitted comments. EEOC’S decision to use W-2 earnings goes to the heart of the burden and utility of this proposal. Submitting W-2 earnings data and work hours will be extraordinarily burdensome because it will force employers to gather race/ethnicity and sex, as well as the W-2 earnings and work hours, from different systems – at least two separate systems (HRIS and payroll) for most employers and a third (work hours time-keeping) for many.  Generating, reconciling and merging large data sets from different systems is a complex and burdensome project and one which EEOC does not appear to fully appreciate, based on its burden estimate. Also, receiving W-2 earnings will not permit EEOC and OFCCP to focus distinctly on base pay or other individual components of pay (for example – bonuses, overtime, commissions). As a result, it will not allow the agencies to get at a real picture of employers’ pay systems and will cause them to arrive at conclusions and initiate investigations of employers based upon “false positives.” Finally, if EEOC accepted the recommendation, the use of annualized salary or hourly pay rate would have eliminated the need to report work hours; thus, EEOC could have simultaneously increased utility and decreased burden but chose not to.  The minimal utility of collecting W-2 data does not justify the burden and expense to employers.  By going after more, EEOC is actually getting less helpful data.

ELD: The EEOC revised its estimated burdens in light of the public comments. Are the revised estimates realistic? Are the statements regarding employer HRIS systems accurate/realistic?

Silberman: We discussed this issue with many employer representatives directly involved in EEO-1 reporting and ran our own simulations. Based upon those efforts, while EEOC increased its burden estimate somewhat, EEOC update burden projection continues to vastly underestimate the actual burden that will be imposed upon employers.

ELD: What are your thoughts on the agencies’ assertions regarding employer’s confidentiality concerns?

Silberman: There are really three issues here, each of which presents real risk to employers: data security, meaning whether the submitted data is secure from data system and transmission breaches; access to the pay data by the public through FOIA; and, confidentiality concerns related to EEOC’s plan to publish aggregates pay data:

  1. EEOC has responded to the first of these issues with largely the same statements as the original proposal. Data security experts should weigh-in on the first issue.
  2. As for FOIA requests, protection of EEO-1 data is not absolute for federal contractors, which most large U.S. employers are. Whereas requests to EEOC “will be denied by the EEOC under Exemption 3 of the FOIA,” OFCCP will only protect EEO-1 data “consistent with FOIA” which does not provide a blanket protection from disclosure. And almost certainly there will be greater public interest in obtaining EEO-1 data than in the past, so we have concerns about OFCCP’s disclosure of pay data in response to FOIA requests.
  3. Finally, under some circumstances (for example, in rural areas), EEOC publishing aggregate pay data by industry and geography may identify particular employers and, even, employees. Despite many comments by stakeholders raising this concern, EEOC has not addressed this important issue.

ELD: In the revised proposal, the EEOC goes into some detail about its justifications for collecting pay data. Will this proposed pay data collection be as effective for enforcement as the agencies suggest?

Silberman: In a word, no.  Based on the proposal, EEOC would lack the necessary data to precisely and accurately identify potential pay discrimination and then use those results to correctly target employers for investigations and audits. To the contrary, false positives will be a common outcome of analyses on the proposed data collection, leading to unnecessary time and effort expended by the agencies and burden on employers not deserving of such scrutiny. At most, the prospect of having to annually submit pay data to the federal government may prompt employers to give more attention to pay equity [that] otherwise would not. That may be a positive byproduct of this proposal, but there are more efficient and effective methods to achieve that goal.

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Election tension sure to run high as we head into November

August 11th, 2016  |  David Stephanides  |  Add a Comment

Water cooler talk about politics can create a hostile work environment for staff and an HR nightmare for business. While certainly everyone has the right to free speech, the First Amendment does not provide blanket protection in the workplace. As tensions are expected to rise as we head toward November, the law firm Fennemore Craig has some suggested guidelines to help keep the peace at work:

(1) There are no federal laws in place that protect employees from discrimination or retaliation as a result of their political activities or discussions in the workplace.

(2) The First Amendment does not apply to the private sector in most cases as it only protects an individual’s right to free speech without interference from the government, but not from anyone else.

(3) Employers should approach conversations about discussing political candidates or issues with care to ensure they do not discriminate against a protected class such as race, religion, or national origin as defined by federal or state law.

(4) Take into account the National Labor Relations Act that protects politically charged speech in some cases by giving employees the right to engage in collective bargaining activities and can cover interactions between employers and employees.

(5) Consult with a labor relations attorney about an appropriate code of conduct clearly defining policies around political comments in the workplace. It can go a long way to stabilizing the environment.

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FMLA notice’s failure to include job restoration rights might be interference if employee prejudiced

August 10th, 2016  |  Kathy Kapusta  |  Add a Comment

In a case emphasizing the importance of providing proper notice to employees of their FMLA rights, the Fourth Circuit found that the notice a federal reserve bank purportedly sent to an employee failed to inform him of his right to job restoration. And because he presented evidence that he would have structured his leave differently had he known his job was protected, the federal appeals court revived his FMLA interference claim.

When the employee’s supervisor noticed he was having problems with his work and attendance, he told the bank’s medical director the employee might be depressed. The medical director had previously treated him for depression and knew the employee had taken antidepressant medications “for a long time.”

Diagnosis. Not long after, a counselor diagnosed him with “major depressions” and several weeks later, he was admitted to a hospital for psychiatric treatment. His physicians recommended that he enter a 30-day rehabilitation program for treatment of depression and alcohol dependency. Purportedly concerned that taking time off would result in his termination, he refused.

Around that time, he submitted an application for short-term disability, which also functioned as a request for FMLA leave. Attached to the application was his physician’s statement taking him out of work for a month. Fearful of losing his job, the employee reported to work but was sent home because he didn’t have a doctor’s note. He returned the next day with a doctor’s note and was sent on a three-day work assignment in another city. While he drove a company vehicle and stayed in a hotel at the company’s expense, he did not report to work.

Upon his return to the office, he was placed on a performance improvement plan and was ultimately terminated for failure to properly communicate unscheduled time off and insubordinate behavior for leaving work despite instructions to complete the PIP. He then sued, alleging that the bank violated his rights under the FMLA and the ADA and the district court dismissed his claims on summary judgment.

FMLA interference. On appeal, the employee argued that the bank failed to provide him individualized notice of his job protection rights as required by the FMLA, which affected his ability to take the medical leave he needed. Under the FMLA regulations, a statement of the employee’s right to job reinstatement must be included in the rights and responsibilities notice an employer sends an employee who may be entitled to FMLA leave, said the court, observing that the bank did not contest that the only relevant document in the record failed to show notice of the employee’s job restoration rights. Therefore, the employee established for purposes of the bank’s summary judgment motion that its notice did not comply with the regulatory requirement.

Prejudice. And while the FMLA does not provide relief unless the employee has been prejudiced by the violation, the court found sufficient evidence to show that the employee, who returned to work prior to the expiration of the medical leave he initially requested, would have structured his leave differently had he known his job was protected. He initially requested medical leave from November 10 to December 10 in accordance with his physician’s note but instead of taking the leave, he returned to work early. He claimed that had he known of his right to reinstatement, he would have taken the full 30-day leave of absence set out in his initial FMLA application to obtain the inpatient treatment.

Further, his testimony that “I think [a notice of job protection rights] would have made a huge difference because I wouldn’t have been so fearful of losing my job and I would have known I could have gotten help and that I had the support of the bank and that they wanted me to get well. And I could have gone to treatment” was supported by the testimony of his family. Indeed, said the court, after his termination, he completed an inpatient treatment program.

Employer takeaway. This case should serve as a reminder to employers that failure to comply with the FMLA’s notice requirements could constitute interference with, restraint of, or denial of the use of FMLA leave. If an employee is able to demonstrate harm as a result of an employer’s failure to provide a required notice, the employer may be liable for the harm suffered. Employers should review all forms and policies to ensure that they are in compliance with this requirement.

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Landmark agreement will make kiosks accessible to the blind and those with low vision in Massachusetts

August 5th, 2016  |  Deborah Hammonds  |  Add a Comment

Massachusetts Attorney General Maura Healey and the National Federation of the Blind (NFB) recently announced a first-of-its kind agreement with Pursuant Health, Inc. that will make health care kiosks accessible to Massachusetts individuals who are blind or have low vision.

Pursuant Health, Inc. is an Atlanta-based company that manufactures and operates thousands of self-service health care kiosks in retail stores nationwide. The company’s kiosks offer biometric health screenings including vision assessments, blood pressure screening, weight and BMI assessments, and pain management advice. According to the joint press statement, released on July 27, the agreement will provide meaningful benefits to individuals nationwide who are blind or who have low vision, including 27,000 Massachusetts residents who are legally blind.

According to the terms of the agreement, Pursuant Health will implement a detailed project plan to make their kiosks and website accessible to consumers who are blind or visually impaired. The kiosks will be made accessible over time and will be reformatted to provide audio instructions and easily locatable “hot spots” on the kiosk screens to help blind consumers navigate the system. Membership options to make it easier for blind consumers to activate the kiosks and track their individual health assessments will also be made available.

In addition, Pursuant Health will make payments totaling $95,000 to the AG’s Office and the NFB, to be used to further improve access and opportunity for individuals with disabilities.

“Living the lives we want as blind people includes monitoring our own health so that we can take steps to maintain or improve it,” said NFB President Mark A. Riccobono. “Health information has the potential to be more accessible than even to the blind with twenty-first century technology, but only if the manufacturers of technology keep accessibility in mind. We are delighted to have reached this agreement with Pursuant Health, working with the outstanding civil rights advocates in Attorney General Healey’s office, and believe that it will result in health information kiosks that set an industry-leading example.”

“Technology should be used to improve people’s lives, not create barriers. We must take steps to ensure that all Massachusetts residents have equal access to health care services, and that technology is accessible to consumers with disabilities. We are pleased to have worked with the NFB and Pursuant Health to make these kiosks accessible,” said AG Healey.

This agreement is the most recent result of collaboration between the AG’s Office and the NFB. The matter was handled by Assistant Attorney General Genevieve C. Nadeau, Chief of AG Healey’s Civil Rights Division on behalf of the Commonwealth, and by Daniel F. Goldstein of the Baltimore firm Brown, Goldstein & Levy, LLP on behalf of the NFB.

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Recent updates to OFCCP documents

July 28th, 2016  |  Cynthia L. Hackerott  |  Add a Comment

Earlier this month, the OFCCP requested Office of Management and Budget (OMB) approval to update its complaint form and began using modified compliance audit documents that were recently approved by the OMB.

According to a supporting statement published as part of a notice in the July 1, 2016 edition of the Federal Register (81 FR 43254- 43261), the OFCCP is seeking comments regarding its request for OMB approval of changes to update the OFCCP’s complaint form in light of recent changes to Executive Order (EO) 11246, A copy of the proposed revised form and corresponding instruction sheet is also included in the notice. Written comments are due by August 30, 2016.

Although no private right of action exists under the three laws — Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veteran’s Readjustment Assistance Act of 1974 — that are enforced by the OFCCP, any employee or applicant for employment with a government contractor may file a complaint with the Department of Labor alleging discrimination on the basis of race, color, sex, religion, national origin, and status as a qualified individual with disabilities or protected veteran. To facilitate the complaint process, the OFCCP provides a complainant with a complaint form (Form CC-4) entitled, “Complaint Involving Employment Discrimination by a Federal Contractor or Subcontractor.”  The OFCCP investigates the complaint but retains the discretion whether to pursue prosecution. In appropriate circumstances, the OFCCP may refer the complaint to the EEOC pursuant to a Memoranda of Understanding a joint regulation between the two agencies.

In its current Information Collection Request (ICR), the OFCCP is seeking approval of the revised complaint form and accompanying instructions page to reflect two amendments to EO 11246: (1) EO 13672 (79 FR 42971- 42972), which added “sexual orientation” and “gender identity” as protected bases, and (2) EO 13665 (79 FR 20749-20750), which protects any applicant or employee who inquires about, discusses, or discloses compensation.

The agency reports in the supporting statement that it received 790 complaints in fiscal year (FY) 2013, 699 complaints in FY 2014, and 769 complaints in FY 2015. Therefore, on average, the OFCCP receives about 753 complaints annually.

OMB approval for the current version of the form (OMB Control No 1250-0002) expires on August 31, 2017.

Modifications to audit documents now in force. Also on July 1, the OFCCP announced that it would begin using newly revised audit documents that were approved by the Office of Management and Budget (OMB) on June 29, 2016.

According to the OFCCP, it made clarifying edits to the Scheduling Letter and accompanying Itemized Listing that the OFCCP uses to initiate supply and service (non-construction) contractor compliance evaluations to ensure contractors understand the information being requested and to strengthen the agency’s assurances of confidentiality for the information provided. In addition, the OFCCP has also included language in the renewed Scheduling Letter that provides a more complete description of its investigatory and enforcement processes. The revised documents are available on the RegInfo.gov website (OMB Control Number 1250-0003). OMB authorization for the revised documents expires on June 30, 2019.

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