Martha Zackin

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

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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.

Martha Zackin

Joint Employment: DOL Issues Adminstrator’s Interpretation

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By Martha J. Zackin

The legal concept of joint employment has been around for many years, first gaining national prominence in 1996, after a federal appeals court found Microsoft to be a co-employer of thousands of workers classified either as “contractors” or “temporary employees” retained through a staffing company.  The case, Vizcaino v. Microsoft,, 97 F.3d 1187 (9th Cir. 1996), ultimately settled for $97 million dollars.

In 2015 the National Labor Relations Board weighed in, with Browning-Ferris Industries of California, Inc., 362 NLRB No. 186.  As described in a press release describing the BFI decision, the NLRB will now find two or more entities to be joint employers of a single workforce if “(1) they are both employers within the meaning of the common law;  and (2) they share or codetermine those matters governing the essential terms and conditions of employment.”  In evaluating joint employment status, the NLRB considers whether an employer has exercised control over terms and conditions of employment indirectly through an intermediary, such as a staffing company.  Remarkably, with BFI, the NLRB will find joint employment even where a company has not actually exercised control, but has merely “reserved the authority to do so.”

 

Multiple federal courts also joined the discussion in during 2015, with both the Third and the Fourth Circuit Courts of Appeals finding staffing buyers to be joint employers with the staffing companies whose workers performed the services.   Although the tests applied by the courts were slightly different, the courts in both Butler v. Drive Automotive, 793 F.3d 404 (4th Circuit 2015) and Faush v. Tuesday Morning, Inc., (3rd Circuit 2015) focused on the staffing buyers’ right to control the manner and means by which the work was performed.

Today, the Department of Labor offered its view on joint employment, issuing Administrator’s Interpretation No.  2016-1.  Not surprisingly, the DOL advocates an expansive definition of joint employment “to ensure that workers receive the protections to which they are entitled.”  Within the Administrator’s Interpretation, the DOL introduces the concepts of “horizontal joint employment” and “vertical joint employment.”  According to the DOL, both “horizontal” and “vertical” joint employment exist when “an employee is employed by two (or more) employers and the employers are responsible, both individually and jointly, for that employee under the law.”  With “horizontal” joint employment, an employee may be employed by two companies that share operations.  The “vertical” joint employment relationship is akin to the traditional staffing relationship, where a business obtains workers through an arrangement with an intermediary employee.

With the Administrator’s Interpretation, the DOL also published a blog entry, along with FAQ’s graphic illustrations of “horizontal joint employment” and “vertical joint employment.”

A broad standard of joint employment will have a significant impact on many businesses.   For example, entities deemed to be joint employers may find themselves liable for actions taken by their contractors and suppliers, if those contractors and suppliers are deemed to be joint employers.  Moreover, under the expansive definition described above, non-unionized employers found to be joint employers of unionized entities may find themselves subject to collective bargaining obligations.  Small businesses and franchise owners may be responsible for medical care under the Affordable Care Act, among other laws, if their employees are grouped together and counted with the employees of their co-employers.

Stay tuned for further developments.

Martha Zackin

Form I-9 Compliance: New Guidance Issued

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By Martha J. Zackin

The Immigration and Nationality Act (INA) requires employers to verify the work authorization of employees using the Form I-9.   Some employers choose to conduct periodic internal audits of their Forms I-9, to ensure compliance.  Concerned that improperly conducted internal audits could “create barriers to employment for work-authorized individuals,” the Department of Homeland Security’s U.S. Immigration and Customs Enforcement (ICE) and the Department of Justice’s Civil Rights Division together published new Guidance for Employers Conducting Internal Employment Eligibility Verification Form I-9 Audits.

The guidance, developed by DOJ and ICE with input from the Department of Homeland Security’s Office of Civil Rights and Civil Liberties, the U.S. Citizenship and Immigration Services, the Department of Labor, the National Labor Relations Board, and the Equal Employment Opportunity Commission, seeks to provide employers with, among other things:

  •  information regarding the scope and  purpose of audits;
  • considerations before conducting internal audits;
  • details regarding how to correct errors, omissions or other deficiencies found on Forms I-9 and how to cure deficiencies related to E-Verify queries; and
  • guidance regarding the anti-discrimination mandate.

For further information, the DOJ’s press release announcing the guidance may be found here.

Nothing in the law or this guidance requires employers to self-audit I-9 compliance.  Those employers who choose to do so, however, should look to the guidance to help structure and implement self-audits in a manner consistent with the employer sanctions and anti-discrimination provisions of the INA.

Martha Zackin

Federal Contractors and Subcontractors Must Comply with New Pay Transparency Rules

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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 →