Update: Comment Period Extended for Proposed Rule for Federal Contractor Paid Sick Leave

By: Alexandra (Sasha) Thaler

The Department of Labor has extended the public comment period on its Proposed Rule for Federal Contractor Paid Sick Leave, based on public comments received and the interest that has been expressed in this matter.  The comment period was due to close on March 28; comments may now be submitted through April 12, 2016.

See our earlier post for more detail on the Proposed Rule.

Proposed Rule Issued for Federal Contractor Paid Sick Leave

By Alexandra (Sasha) Thaler

The Department of Labor (DOL) announced last Thursday that it has posted for comment its Proposed Rule implementing President Obama’s September 7, 2015 Executive Order (EO 13706), which requires certain federal contractors and their subcontractors to provide employees with up to 7 days (56 hours) of paid sick leave annually.  The rule affects contractors entering into new contracts on or after January 1, 2017 that are covered by the Service Contract Act, the Davis-Bacon Act, or the Fair Labor Standards Act, concessions contracts, and service contracts in connection with federal property or lands. These contractors will need to include a new contract clause in applicable solicitations and government contracts, included as Appendix A to the Proposed Rule.

Under the new rule, employees must be allowed to earn paid sick time at a rate of 1 hour for every 30 hours worked. This mirrors many recently enacted state and municipal sick time laws across the country. However, accruals may not be capped at less than 56 hours, an amount that is higher than required by some jurisdictions, including Massachusetts and California.

The Proposed Rule provides that sick time must be made available for absences due to the employee’s own physical or mental illness, injury or medical condition, and for obtaining diagnosis, care or preventative treatment for the employee, as well as for caring for family members for the same reasons, and for absences relating to domestic violence, sexual assault or stalking (including for medical, legal and other needs that may arise in those circumstances). In a departure from some existing state and local laws, however, the definition of a family member is quite broad, and includes not only children, parents, spouses and domestic partners, but also “any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.”

The new federal contractor requirement also has some of the same aspects of other sick time laws that are most likely to cause problems in administration, such as allowing employees to use sick time in 1-hour increments, requiring carryover of unused hours from year to year, requiring reinstatement of unused time following interruptions in service of up to 12 months, and requiring sick time to be granted even if the employee provides little or no prior notice.

Due to the rash of activity in this area in recent years, many employers have already implemented paid sick time policies, while others have had comprehensive PTO policies for some time. The Proposed Rule permits existing sick time, PTO or other time off policies to substitute for the new paid sick time requirement so long as those policies meet the minimum standards of the new rule. Employers that plan to rely on existing policies to meet the new requirements should consult with experienced employment counsel to assess whether they fully meet the new requirements. The good news is that employers will have until January 1, 2017 to implement compliant policies. The Wage and Hour division invites comments on the proposed rule until March 28, 2016.

EEOC Proposes Changes to EEO-1 Reporting to Include Pay Data

By Martha J. Zackin

Today, the U.S. Equal Employment Opportunity Commission (EEOC) issued a proposed revision to the Employer Information Report (EEO-1) to include the annual collection and reporting of pay data.  Currently, federal law requires federal contractors with 50 or more employees, and all other employers with 100 or more employees, to file an annual EEO-1 report, which reports employees’ ethnicity, race, and sex by job category.  The revised EEO-1 would require all employers with 100 or more employees to continue to collect and report this demographic data and, in addition, pay data.  Federal contractors with between 50 and 99 employees would not be required to report pay data, but would continue to report ethnicity, race, and sex.

According to the press release published announcing this new requirement, the data collected will be used by both the EEOC and the Office of Federal Contract Compliance Programs (OFCCP) “to assess complaints of discrimination, focus agency investigations, and identify existing pay disparities that may warrant further examination.”  In addition, as described in an EEOC- published “Questions and Answer” document, the data will be aggregated and published, to “help employers evaluate their own pay practices to prevent pay discrimination in their workplaces.”

A “Small Business Fact Sheet” provides a detailed description of the data that would be collected if the proposal becomes law.  In summary, using W-2 wage data employers would tally and report the number of employees within each EEO-1 job category whose W-2 pay for twelve months was in one of twelve “pay bands.”  These pay bands, which would track the twelve pay bands used by the Bureau of Labor Statistics in the Occupation Employment Statistics survey, are:

    1. $19,239 and under;
    2. $19,240 – $24,439;
    3. $24,440 – $30,679;
    4. $30,680 – $38,999;
    5. $39,000 – $49,919;
    6. $49,920 – $62,919;
    7. $62,920 – $80,079;
    8. $80,080 – $101,919;
    9. $101,920 – $128,959;
    10. $128,960 – $163,799;
    11. $163,800 – $207,999; and
    12. $208,000 and over.

In addition to reporting (by ethnicity, race and sex) the number of employees whose total W-2 pay fell into each pay band, employers would also tally and report the total number of hours worked by the employees counted in each pay band over the prior twelve months. This would accounts for part-time or partial-year employment.

Members of the public may submit comments through April 1, 2016.  Barring revision or withdrawal of the proposal, employers will be required to comply with the new EEO-1 obligations by submit ting pay data as of the September 30, 2017 EEO-1 filing deadline.

The EEOC also The proposed revised EEO-1 may be viewed here.

Federal Contractors and Subcontractors Must Comply with New Pay Transparency Rules

By Martha J. Zackin

As is often reported, there is a pay gap in many of today’s workplaces between men and women, and between wages earned amongst various racial groups.   Many commentators believe that employer policies forbidding employees from discussing pay with co-workers perpetuate these wage gaps, by preventing workers from finding out if they are being discriminated against in time to act.

To narrow and, ultimately eliminate that gap, in April 2014, President Obama issued Executive Order 13665, which prohibits federal contractors and subcontractors from firing, failing to hire, or otherwise disciplining employees or job applicants who inquire about, discuss, or disclose their compensation or the compensation of other employees or applicants.   Read more

OFCCP Issues Notice of Proposed Rulemaking, Seeking to Update its Sex Discrimination Guidelines

By Martha J. Zackin

On January 28, 2015, the Office of Federal Contract Compliance Programs announced a Notice of Proposed Rulemaking, seeking to update its sex discrimination guidelines applicable to federal contractors and subcontractors covered by Executive Order 11246.

According to the press release published to announce its proposal, OFCCP’s “sex discrimination guidelines are woefully out of date and don’t reflect established law or the reality of modern workplaces.”  The proposed rule would rescind existing guidance, and align OFCCP’s regulations with those regulations applicable to Title VII of the Civil Rights Act of 1964. Read more