Employment Obligations of Federal Contractors and … · 2018-07-09 · – OFCCP anticipates fewer...

© Husch Blackwell LLP

Employment Obligations of Federal Contractors

and Subcontractors

Deena Jenab Molly Kurt

Are You a Federal Contractor for OFCCP Purposes?

• Questions – Who is your contract with – What is your contract for – How much is your contract worth


Direct/Prime (Supply/Service) Contractor: • Is your contract directly with an executive agency of

the federal government: – For the purchase, sale or use of personal property or

nonpersonal services – Examples include supplies, lease arrangements, research,

insurance, transportation, and utilities

NOTES: • Construction contractors (and federally assisted construction

contractors) have different obligations from “supply and service” contractors

• What about contracts with non-executive agencies of the federal government

• Federal grants and financial assistance generally do not provide a basis for coverage


• Subcontractor (Supply and Service): – Is your contract with another person/entity that has a

direct/prime contract with the federal government, and your contract is:

• For the purchase, sale or use of personal property or nonpersonal services which, in whole or in part, is necessary to the performance of the direct government contract

• One under which any portion of the obligation under the direct government contract is performed, undertaken or assumed


Laws

Dollars E.O. 11246 Section 503 VEVRAA

0-$10,000 No No No

$10,001-$49,999 Yes – basic Yes – basic No

$50,000-$99,999 Yes – basic & AAP (50 employees)

Yes – basic & AAP (50 employees)

No

$100,000+ Yes – basic & AAP (50 employees)




• Are contracts aggregated to determine dollar amounts?

– Yes, for basic coverage under EO 11246 (no, for rehabilitation Act and VEVRAA)

– No, for AAP coverage under EO 11246, Rehabilitation Act, VEVRAA (need single contract or bills of lading within 12 months)

– Indefinite delivery vehicle, indefinite quantity and purchase order contracts are assessed based on expected total amount of all transactions, during the life of the contract

• Financial institutions are unique – Any entity that serves as a fund depository for the United States

is covered, regardless of the value of the contract – Any entity that subscribes to deposit insurance from FDIC or

NCUA is covered


• A note about healthcare – 2010 was very active

• UPMC Braddock • Florida Hospital • Directive No. 293

– National Defense Authorization Act of 2012, signed by President Obama on December 31, 2011

• legislatively overturns OFCCP view that TRICARE provides coverage over subcontractors

– Medicare Parts C and D likely still covered; legislative efforts underway

AAP Contents

Two Main Components: A. Narrative B. Statistics

1.Organizational Profile 2.Job Groups 3.Availability 4.Utilization 5.Goals

AAP Components

• Philosophy: Cover the essentials and eliminate extraneous materials – Ensure compliance with most recent revision of the

regulations – Maintain supplemental and/or confidential

documents in a separate place, not in AAP

Narrative AAP Contents: M/W

• Title Page • Program Terminology and Affirmation of

Non-Discrimination • Designation of Responsibility • Organizational Profile • Job Group and Availability Analysis • Annual Placement Goals • Problem Area Analysis • Action Oriented Programs • Internal Audit and Reporting System

Narrative AAP Contents: M/W

• Common faults: – Making confessions of discrimination – Including sections on Segregated Facilities,

Religious and National Origin Discrimination – Revealing compensation data

AAP Statistical Contents

• Two Main Components: – Workforce Analysis: vertical – Job Group Analysis with Comparison of Incumbency

to Availability: horizontal – Timing: Based on a “snapshot” of workforce on the

first day of AAP • Can be any day of the year • In other words, who is employed on that date?

AAP Statistical Contents: Workforce Analysis

• Organize by departments or organizational units

• Order by compensation • Code compensation data • Include Lines of Progression within

departments if more than one LOP

Copyright Peoplefluent 2012

AAP Statistical Components: Job Group Analysis

• Define job groups: Similar wage rate, job content, and opportunity for promotion – Begin with EEO-1 job groups: subdivide if necessary – Fuels the comparison of incumbency to availability

analysis

AAP Statistical Components: Availability Analysis

• Availability: calculates the percentages of qualified W/M available for employment in each job group – Must consider external and internal availability (two

factor availability analysis) – May break external availability into 3 subparts: 1)

local; 2) broader; 3) training institutions – Use US Census data for external availability. Match

each job title to one of approximately 500 U.S. Census Job Titles

– Still using 2000 Census; 2010 due in late 2012 – Internal availability: feeder job groups

AAP Statistical Components: Availability Analysis and Comparison of Incumbency to

Availability • Weight external and internal availability, e.g.

40% external, 60% internal; e.g. 100% external, 0% internal; 5 % external, 95% internal

• Look loosely to recent past, don’t over-analyze or comb through employee address records.

• Calculate overall availability of W/M • Then compare to current incumbency • Measure the difference: use a statistical tool,

either Two Standard Deviations or Fisher’s Exact

Goals

• Set goals when incumbency is lower than estimated availability, using either Two Standard Deviations or Fisher’s Exact test

• Use any difference measurement? No. • Goals are not quotas. Quotas are illegal

discrimination. • Consider goals as recruiting targets that over

time, will increase the flow of qualified M/F. Get more qualified M/F to apply.

AAP: V/DV/D

• Now, only narrative required • Modeled upon regulations at 41 CFR part 60-

250, 60-300 and 60-741 • Stay tuned for discussion of proposed changes • Consider whether to store in AAP for M/F or in

separate document • Employees may request to view this AAP

More Detail: Adverse Impact and Compensation Analyses

• Adverse Impact Analyses and Compensation Analyses are the two potential liability issues associated with OFCCP compliance

• OFCCP audits seek evidence of class-type discrimination in hiring and compensation

• Avoid conducting these analyses alone. Consider cloaking in privilege.

Adverse Impact Analyses

• Analysis of “personnel activity” for 12-month period preceding AAP starting date – This is a “look back,” or historical analysis

• Comparing applicants vs. hires; promotions and terminations vs. eligible pools

• Considerable flexibility exists in “architecture” of disparity analyses

Considerations for Applicant/Hire Analyses

• How to group? Ideally, at the requisition level. • Other options include by time period, manager,

geography, job title, all jobs in a job group over the course of the year, etc

• Measurement: Two Standard Deviations or Fisher’s Exact Probability test. Never use the “any difference” or “80 % Rule.”

• Accurate applicant data fuels accurate disparity analyses, and vice versa – Inaccurate disparity analyses often fuel liability

results

Who is an “Applicant”? • Individual who expresses interest in the job in question + is

considered by the employer + possesses basic qualifications for the job + didn’t otherwise withdraw from consideration = Applicant

• Not every person who submits a resume or application is an applicant

• Query: How to keep track of the facts supporting applicant/not an applicant status?

• Facts are most likely obtained at various stages of the screening and interviewing process

• Probable that more than 1 person obtains these facts. How do you ensure that the information gets to a single data collection source?

• Database system works well – Ensure that everyone from recruiters, to screeners, to hiring managers

funnel their facts into single database


Note: Yes indicates Number of Standard Deviations <= -2.00 Yes* indicates Probability <= 0.0500 1 indicates one-tail probabilities that have not been doubled

Compensation Analysis

• OFCCP withdrew Compensation Guidelines published during Bush Administration

• Promising a new compensation analysis tool in 2012 – Based on statistical regression analysis

Compensation, cont’d.

• AAP regulations require that contractors review compensation periodically and ensure it is free from discrimination

• Method is not currently defined • Leaves contractor with many options

Compensation, cont’d.

• Considerations: – Cloak with privilege – Be prepared to remedy – Likely the job of an outside expert

Key Non-AAP Obligations • Encumber subcontracts: Can incorporate by reference

– EO 11246, Rehabilitation Act, VEVRAA (basic dollar threshold) – EO 13496 ($150,000+ (prime contract); $10,000+ (subcontract))

• Record retention: 1 year (2 years if 150+ ees) (basic dollar threshold)

– EO 11246, Rehabilitation ACT, VEVRAA • EEO-1 report (50+ employees) ($50,000+)

– EO 11246 • Posters (basic dollar threshold)

– EO 11246, Rehabilitation Act, VEVRAA • Advertising (basic dollar threshold)

– EO 11246 • Invitation to self-identify

– EO 11246 ($50,000+ and 50+ employees) – Rehabilitation Act (basic dollar threshold) – VEVRAA (basic dollar threshold)

Key Non-AAP Obligations

• Access to AAP – Rehabilitation Act ($50,000+); posting – VEVRAA (basic dollar threshold); posting

• Union rights poster: EO 13496 – Prime contracts ($150,000+) – Subcontracts to prime contracts ($10,000+)

• Notification to State unemployment office – VEVRAA (basic dollar threshold)

• VETS 100A report – VEVRAA (basic dollar threshold)

Outreach • “Affirmative action” = proactive steps • Boilerplate “good faith efforts” subject to challenge by

OFCCP - - no longer sufficient • Most frequent violation in 2010: outreach and

recruitment of protected veterans • Outreach activities – develop relationships and

strategies, and document – Attract, develop and retain

– Key: Veterans and disabled • need a “bold and well-publicized program for the hiring and

advancement of veterans” (former OFCCP Midwest Regional Director)

• Linkage agreements for disabled

– Translate military skills into workforce skills

– Accessible application system

What’s On the Horizon • Enforcement Priorities

– OFCCP anticipates fewer audits, but much more detailed and costly

– Compensation disparities • Will second-guess every compensation decision by employer

– Company-wide audits and conciliation agreements

• Regulatory Activity – Proposed Disabilities Regulations: issued Dec. 2011 – Proposed Veterans Regulations: issued April 2011

• (target final rule: Spring 2012) – Upcoming “compensation data collection tool”

• (target: June 2011) – Upcoming proposed construction regulations

• (target: November 2011) – Upcoming proposed sex discrimination regulations

• (target: February 2012)

Questions?

Husch Blackwell LLP

OFCCP Compliance

Emphasizing a proactive and strategic approach to program compliance and audit defense, our employment attorneys represent federal contractors and subcontractors in a range of industries across the country. Our Office of Federal Contract Compliance Programs (OFCCP) practice is both highly specialized and practical. We begin by examining the threshold question of whether our clients are accurately classified as federal contractors or subcontractors subject to the affirmative action requirements of Executive Order (EO) 11246 and related laws. We have successfully argued against contractor status in numerous circumstances. If contractor status exists, we structure and develop a contractor’s initial affirmative action plan (AAP) and we update, monitor, and audit AAPs to assure their full compliance. We also defend our clients with OFCCP audits, and offer training and related services for clients subject to the jurisdiction of the OFCCP.

AAP Preparation and Analysis

We prepare annual affirmative action plans for numerous companies in various industries. Where our clients have multiple locations and/or entities, we apply our significant experience in plan architecture to analyze the business organization and design the AAP accordingly. As a testament to our work product and the positive relationships we have developed, the vast majority of our clients return each year for us to renew and update their affirmative action plans. Our plan format has survived the scrutiny of OFCCP on numerous occasions.

Our OFCCP practice includes identifying, refining and resolving potential problem areas at the time AAPs are developed, drafted, or updated. We encourage clients to review applicant/hire data at least semi-annually to help assess and gauge full compliance at the end of the plan year and to allow adequate time for corrective strategies where needed. Specifically, we draw attention to, and provide legal strategies to resolve, initial areas of potential adverse impact in applicant/hire data, and the race and gender salary comparison studies now emphasized by OFCCP. Attorney involvement in plan design, annual AAP preparation, and mid-year checks help to identify and resolve issues in a confidential manner, likely protecting some or all such information from disclosure under the attorney-client and/or work product privileges.

OFCCP Audit Defense

We represent and defend our clients in OFCCP desk and onsite audits throughout the year. We proactively help clients understand and highlight what their AAP and supporting data reveals, and we work diligently to avoid any suggestion of statistically significant adverse impact. On occasion we are not retained until mid-way through a client’s OFCCP audit, after the government has presented allegations of class-based discrimination and is seeking back pay. We have significant experience in negotiating Conciliation Agreements with OFCCP.

Training Services

We conduct human resource and management training specific to EO 11246 and related laws. On numerous occasions we have trained human resource or compliance representatives in advance of OFCCP onsite audits. We have also trained our clients on the mechanics of careful applicant/hire recordkeeping and effectively capturing all the information needed to prepare an annual AAP or prepare for an OFCCP audit.

Related Services

We can prepare and file the annual EEO-1 and Vets-100/Vets-100A forms for covered employers. We can also assist in proper categorization of employees for these forms, and can help resolve related issues.

Husch Blackwell LLP

Kansas City, MO Direct: 816.983.8332 Fax: 816.983.8080 [email protected]

Practices Labor & Employment OFCCP Compliance

Deena B. Jenab PARTNER

Deena assists clients with affirmative action issues and Department of Labor audits and investigations. She counsels management on diversity initiatives, day-to-day human resources matters, drafts employment agreements and policies, and conducts audits. Deena also frequently trains management and non-management employees on human resources matters, including general employment law principles, harassment, ADA/FMLA, interviewing and management skills. She represents and has successfully defended employers with agency charges and state/federal court lawsuits on matters involving discrimination, harassment, retaliation, FMLA, wage/hour, and employment contracts.

Professional Associations & Memberships

Kansas Bar Association

Kansas City Metropolitan Bar Association

The Missouri Bar

Society for Human Resources Management

Admissions

Missouri, 1998

Kansas, 2001

U.S. District Court, District of Kansas, 1999

U.S. District Court, Western District of Missouri, 1998

Education

J.D., Duke University School of Law, with high honors, 1989

B.A., Romance Languages, Dartmouth College, cum laude, with high honors, 1986

Publications & Presentations

Author, “Responding to OFCCP Document Requests Post-United Space, Law 360, November 2011

Author, “Affirmative Action Requirements Come to Hospitals: Are You in Compliance?” Journal of Health Care Compliance, January 2011

Contributing Editor, Cumulative Supplement to The Fair Labor Standards Act, 2008-2009

Author, “Employee Eligibility for FMLA Leave: When Do Twelve Months Mean Twelve Months, and Other Mysterious Issues,” Society for Human Resource Management White Paper, 2003

Co-author, “Using Compulsory Arbitration to Resolve EEO Disputes,” New York Law Journal, 1992

Husch Blackwell LLP

Speaker, “Legal Update,” American Public Transportation Association’s Risk Management Conference, June 2011

Co-speaker, “Contracting with the Federal Government: Practical Legal Guidelines for Working with the Country's Largest Customer,” L2 Federal Resources, LLC and WPL Publishers, Inc. Webinar, January 2011

Husch Blackwell LLP

Kansas City, MO Direct: 816.983.8229 Fax: 816.983.8080 [email protected]

Practices Labor & Employment Alternative Dispute Resolution OFCCP Compliance

Mary Elizabeth "Molly" Kurt OF COUNSEL

Molly’s practice is focused on labor and employment and alternative dispute resolution. She has counseled clients through numerous successful audits and compliance checks by the Office of Federal Contract Compliance Programs and helped clients avoid potential affected class findings with the agency. In addition, she has successfully litigated numerous cases alleging discrimination and retaliation under state and federal law. Molly has negotiated collective bargaining agreements for private and public sector employers, has developed successful union avoidance strategies and defeated union organizing campaigns.

Professional Associations & Memberships

The Missouri Bar, Labor Law Committee, 1993-present

Civic Involvement

The Bacchus Foundation, President, Board of Directors, 2001

Visitation Parish School of Religion, Fourth Grade Teacher

Young Friends of Children’s Center for the Visually Impaired, Secretary, Board of Directors

Admissions

Missouri, 1991

Kansas, 1992

U.S. District Court, District of Kansas, 1992

U.S. District Court, Western District of Missouri, 1991

U.S. Court of Appeals, Fifth Circuit, 1993

U.S. Court of Appeals, Eighth Circuit, 1997

Education

J.D., University of Missouri - Kansas City School of Law, 1991 University of Missouri - Kansas City Law Review, Articles Editor

B.A., University of Michigan, 1987

Publications & Presentations

Author, “Waivers Under the Age Discrimination in Employment Act,” University of Missouri - Kansas City Law Review, 1991

Employment Obligations of Federal Contractors and … · 2018-07-09 · – OFCCP anticipates fewer...

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