SunCoke will relocate its headquarters from Knoxville, Tn to Chicago early next year.
Friday, September 24, 2010
Thursday, September 23, 2010
Wednesday, September 22, 2010
Implications for the Workplace
We have witnessed several incidents over the past several weeks of violence taking place in our palces to work.This get followed by a father going ballistic on a school bus because the students riding the bus were bullying his 13 year old disabled daughter. In my spare time ( as if I have any) I substitute teach in the local schools and the last time I did so I had a student who came to the decision that she needed to talk to a friend who was out in the school yard, and despite being told to take her seat she got up and walked out the door. When I discussed the situation with an administrator the answer I received was that it is not the same environment as when we went to school. Now the students can practicaly do what ever they want.
The implication was that we no longer have the ability to control the quality of the educational environment that we are using to train the talnet we need to fulfill the coming talent shortage in our conversations. Growing up we never heard of employees reporting to work with a loaded weapon. Growing up we never heard of employees taking other actions that are detrimental to the workplace.
If we want a safe workplace it is time we take back the environment in which we train the future leaders. We need to create educational environments where the students are there to learn the skills and tools that they will need to survive when they enter the workplace. We need to convince them that there is a better way then bullying fellow students because they are different. We need to convince them that the only way our society and business organizations will survive is if we recognize, appreciate and relish the diversity of thoughts and knowledge in the global workplace.
While I am not condoning the censorship of our employees, I am suggesting that we need to create a better work environment where we respect each others presence.
Saturday, September 18, 2010
Reflections on society, organizations and the global workplace
As I am writing this it is 9:00 PM and our Jewish clients and my family have just finished celebrating the High Holy Days and today we are asked to reflect on our lives. This brings me to the content of this post. We have also heard or read about the Rev Jones in Gainesville, who felt it was his calling to burn the Quaran, because it did not agree with his teachings. I have previously talked about the presentor at a recent conference who suggested we should do a multi-facted background check to determine whether an applicant "fit our corporate culture." We see and hear fairly regularly lately that the US is losing its competitiveness in the global market. You open the newspaper or turn on the news and you hear about "political purity."
Competitiveness comes from the introduction of innovation and collaboration. One of the tools of a high performance team is the art of brainstorming. This only works if you consider all views on a particular issue. Not only those views that you agree with but those that might be totally different then yours. When business enterprises operate from the perspective of ruling out all those who do not think the way they do, dress the way they do, talk the way they do and fit a sterotype of the perfect organizational employee, in the long run you diminish not only your own organization but the global workplace as well.
If we go back in history we can find many examples of individuals who made great contributions to our lives, our society and our futures, who if they had been in the mainstream would have been lost in the shuiffle. If we are going to talk about diversity of backgrounds within our organizations we need to walk the ealk and talk the talk. There is a real possibility that your current corporate culture may be contributing to the root cause of your problems.
Strategy: Recognize that different life experiences enrich the workplace by introducing new ideas and viewpoints. These experiences may open doors that you never dreamed of that can take your organization to new plateaus of performance. So in return value the diveristy of opnions with your organizations. If you talk the talk that you have an open door policy, be sure that you really do. Refrain from making judgements about the value brought to the table by someone who does not exactly look and act like you do. We don't all like the same kind of music but that does not diminish the contributions we all can make to our organizations. If you disagree with my thoughts or have responses of your own, feel free to let me know your thoughts.
Friday, September 17, 2010
Site Expansion Magazine reports results of MAPI survey
While the pace of recovery in the general economy has clearly slowed, the deceleration is less visible in the manufacturing sector, according to the Manufacturers Alliance/MAPI.
"Despite less consumer spending growth in the second quarter, there was nevertheless some employment growth and modest wage increases. Also, the prolonged downturn and sluggish recovery have created pent-up demand for some durable goods, including sales of motor vehicles and appliances," said Daniel J. Meckstroth, Chief Economist for the MAPI. "The inventory swing is greatest in manufacturing; exports are predominantly manufactured and benefitted from the fast global trade bounce back; and business investment in equipment rebounded much faster than consumer spending, thus making the pace of the industrial recovery stronger than that in the general economy.”
Manufacturing industrial production, measured on a quarter-to-quarter basis, grew at an 8% annual rate in the three months ending July 2010, after expanding at a 5% annual rate in the three months ending April 2010.
MAPI predicts the superior growth trend for manufacturing will continue, but decelerate, increasing 6% overall in 2010 and advancing 5% in 2011. At this pace it will be late 2012 before manufacturing production exceeds the December 2007 pre-recession level.
Production in non-high-tech manufacturing expanded at an 8% annual rate during the May-July 2010 period. According to the MAPI report, non-high-tech manufacturing production is expected to increase approximately 5% in 2010 and 4% in 2011. High-tech industrial production rose at a 10% annual rate in the May-July 2010 time frame. The group anticipates that it will post strong 15% growth in 2010 and 13% growth in 2011.
Iron and steel production grew by 68% in the three months ending in July 2010 compared to the previous three months, while industrial machinery production improved by 58% in the same window. MAPI forecasts that iron and steel production will grow 56% and industrial machinery will increase 36%.
Wednesday, September 15, 2010
Click herThe Center for Corporate Equality (CCE) has released its expert Technical Advisory Report on Adverse Impact Analysis
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WASHINGTON D.C. - The Center for Corporate Equality (CCE) has released its expert Technical Advisory Report on Adverse Impact Analysis. Overview Although determining whether selection, promotion, and termination decisions result in adverse impact is an important topic for organizations, there is little guidance about the proper way in which these analyses should be conducted. This lack of guidance is problematic in that it is not unusual for professionals in the same organization to disagree about how these analyses should be conducted, and it is certainly not unusual for plaintiffs and defendants to disagree. To help determine if there are "best practices" in conducting adverse impact analyses, the Center for Corporate Equality (CCE) created a Technical Advisory Committee (TAC) consisting of 70 of the nation's top experts in adverse impact analyses. TAC members consisted of a wide variety of EEO experts including industrial-organizational psychologists, labor economists, plaintiff and defense attorneys, HR practitioners, and former OFCCP and EEOC officials. The first step in the process was to administer a detailed questionnaire that asked TAC members to indicate how they would handle a variety of data, statistical, and legal interpretation issues commonly encountered in conducting adverse impact analyses. The survey results were used to identify topics where there was strong agreement as well as topics where there was strong disagreement. Results of this survey were used to structure the agenda for an in-person onsite meeting. Forty-five of the TAC members then gathered at Georgetown University for a two-day face-to-face meeting to discuss responses to the survey and make general recommendations. These recommendations were combined with the survey results to create a best practice document that will be distributed without cost to members of the EEO community on September 15, 2010. As a courtesy to federal enforcement agencies, one week prior to the public release of the best practices document, members of CCE briefed representatives from the OFCCP, EEOC, and Department of Justice on the TAC findings. The report is featured in today's BNA Daily Labor Report®. To view the full report click on the following links: TAC Adverse Impact Report TAC Report Appendix A: Survey Questions and Responses TAC Report Appendix B: Committee Member Biographies
| Contact: Harold Busch Executive Director email: harold.busch@cceq.org phone: 202-293-2220 |
Center For Corporate Equality releases Technocal Guide to Adverse Impact
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| Washington, DC September 15, 2010 THE CENTER FOR CORPORATE EQUALITY RELEASES TAC REPORT ON ADVERSE IMPACT ANALYSIS WASHINGTON D.C. - The Center for Corporate Equality (CCE) has released its expert Technical Advisory Report on Adverse Impact Analysis. Overview Although determining whether selection, promotion, and termination decisions result in adverse impact is an important topic for organizations, there is little guidance about the proper way in which these analyses should be conducted. This lack of guidance is problematic in that it is not unusual for professionals in the same organization to disagree about how these analyses should be conducted, and it is certainly not unusual for plaintiffs and defendants to disagree. To help determine if there are "best practices" in conducting adverse impact analyses, the Center for Corporate Equality (CCE) created a Technical Advisory Committee (TAC) consisting of 70 of the nation's top experts in adverse impact analyses. TAC members consisted of a wide variety of EEO experts including industrial-organizational psychologists, labor economists, plaintiff and defense attorneys, HR practitioners, and former OFCCP and EEOC officials. The first step in the process was to administer a detailed questionnaire that asked TAC members to indicate how they would handle a variety of data, statistical, and legal interpretation issues commonly encountered in conducting adverse impact analyses. The survey results were used to identify topics where there was strong agreement as well as topics where there was strong disagreement. Results of this survey were used to structure the agenda for an in-person onsite meeting. Forty-five of the TAC members then gathered at Georgetown University for a two-day face-to-face meeting to discuss responses to the survey and make general recommendations. These recommendations were combined with the survey results to create a best practice document that will be distributed without cost to members of the EEO community on September 15, 2010. As a courtesy to federal enforcement agencies, one week prior to the public release of the best practices document, members of CCE briefed representatives from the OFCCP, EEOC, and Department of Justice on the TAC findings. The report is featured in today's BNA Daily Labor Report®. To view the full report click on the following links: TAC Adverse Impact Report TAC Report Appendix A: Survey Questions and Responses TAC Report Appendix B: Committee Member Biographies
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Saturday, September 11, 2010
A week of contrast
This has been a short work week for many brought on by two different events. The first was Labor Day. While not celebrated in exactly the same way it was originally intended for, it gave us time off from work to enjoy the end of summer and understand the role of the worker within our organizations. The second event for the Jewish population was the beginning of a new year according to their calendar. This contrast gave me a pause for thought and I would like to share those thoughts with you. I am open to your commnets back if you disagree with them.
Since 1882 Labor Day was created to emphasize "the strength and esprit de corps of the trade and labor organizations" within this country. But it was created at another time and place within our economic workplace. Many of the presenters I talked with at the recent HR Florida conference, expect an increase in the amount of unionization withinthis country similar to other developed countries around the world. While this might be true, we also have recognize that the requirements of the workplace have changed since 1882. The talent needs of our organizations have changed as the demands on our organizations has changed.
On Thursday and Friday, we celebrated the advent of the Jewish New Year (Rosh Hashanah). With that is an opportunity to begin once again our lives for the next year. Part of that entrance into a new year is the realization that we are NEVER going to go back to the normal before 2007-2008. To those who decry the high unemployment rate, many still operate from the belief that we are going to return to that day of yesterday. Outsourcing was not necessarily the only reason we saw rising numbers of individuals losing their jobs. We have moved on and some have been left by the wayside. Not on purpose but because the need they filled was gone. We are not in an age of industrial growth any longer. We have moved on to a world where the employee contributes not what they can produce on a machine but rather what is in their minds. Critical thinking replaces manipulative skills. The employee has moved to a position of leasing out their services to a particular organization based on the technical or creative skils the individual brings to the table. If you want to get a further understanding of this dilemma, I suggest you get a copy of Charles Handy's "Age of UnReason" and the "Age of Paradox." Charles Handy suggests that there will be no more unemployment but rather we will ALL become self-employed working for organizations in a project basis.
Russ Moen of the Employment Pros recruiting firm makes the analogy that as we moved from the industrial to the knowledge age, employees became non-owned corporate assets. Our ability to compete in this global marketplace is based on the level of innovation and collaboration that our organizations can create for their clients. What is required of our organizations is to find strategies that will more fully engage our creative assets. It will help the employee. It will help the organization. It will help the global workplace.
Thursday, September 09, 2010
Best wishes to our Jewish Friends
As we begin the high holidays for the Jewish community we wish you all a blessed new year
Legal Alert from Ford and Harrison
On September 3, 2010, the IRS issued Notice 2010-59 addressing changes made by the Patient Protection and Affordable Care Act (Affordable Care Act), to the definition of "medical expenses" as it relates to over-the-counter drugs.
Section 105(b) of the Internal Revenue Code generally provides that the gross income of an employee does not include amounts paid as reimbursements of expenses incurred for medical care under an employer-provided accident or health plan. New §106(f) of the Code, as added by the Affordable Care Act, provides that, after December 31, 2010, expenses incurred for a medicine or a drug can be treated as medical expenses eligible for tax-free reimbursement only if such medicine or drug is a prescribed drug or is insulin. Therefore, after December 31, 2010, payments or reimbursements for medicines or drugs from an employer-provided accident and health plan, including a health FSA or an HRA, are restricted to prescribed drugs (including over-the-counter drugs that are actually prescribed) and insulin. This effective date applies regardless of the plan year and regardless of any applicable grace period under a health FSA. Expenses incurred for over-the-counter medicines or drugs that are purchased without a prescription before January 1, 2011 may still be reimbursed tax-free at any time, subject to the terms of the employer's plan.
The rules in §106(f) do not apply to items that are not medicines or drugs; this would include (i) equipment such as wheelchairs, crutches, etc., (ii) supplies such as bandages, syringes, etc., and (iii) diagnostic devices such as blood sugar test kits. Expenses for such items will continue to qualify as medical care expenses if they otherwise meet the definition of §213(d)(1), which includes "expenses for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body."
With limited exceptions, debit cards issues under health FSAs and HRAs may not be used to purchase over-the-counter medicines or drugs after December 31, 2010. However, because of the need for systems changes, the Notice provides that the IRS will not challenge the use of health FSA and HRA debit cards for expenses incurred through January 15, 2011 if the use of the debit cards complies with current rules. However, on and after January 16, 2011, over-the-counter medicine or drug purchases at all providers and merchants (whether they have an inventory information approval system (IIAS), or they meet the "90% test" under Notice 2007-2) must be substantiated before they may be reimbursed. For this purpose, substantiation is accomplished by submitting a copy of the prescription for the over-the-counter medicine or drug (or other documentation that a prescription has been issued), along with other required information from an independent third party. For example, a pharmacy receipt that identifies the name of the purchaser (or the name of the person for whom the prescription applies), the date and amount of the purchase and an Rx number will satisfy the substantiation requirements, as does a receipt without an Rx number but which is accompanied by a copy of the related prescription. Debit cards may continue to be used as they have been for medical expenses other than over-the-counter medicines or drugs.
Most cafeteria plans will probably need to be amended to conform to the new over-the-counter drug requirements. Normally, cafeteria plan amendments may be effective only prospectively. However, the Notice explicitly provides that an amendment to conform a cafeteria plan to the requirements of the Notice may be adopted by June 30, 2011 and may be made effective retroactively to apply to expenses incurred after December 31, 2010 (or after January 15, 2011 for health FSA and HRA debit card purchases).
The change in reimbursement procedures will also apply to health savings accounts (HSAs) and Archer medical savings accounts (MSAs). Expenses incurred after December 31, 2010 for over-the-counter drugs and medicines (other than those that are actually prescribed) will not constitute qualified medical expenses, and so may not be reimbursed tax-free; any such reimbursements will be both includible in income and subject to the additional tax on distributions that are not used for qualified medical expenses (which increases to 20%, effective January 1, 2011).
Relocation Announcement
Gardner Denver will be moving its corporate headquarters from Qunicy, IL to the Philadephia metro area. No schedule for the move has been announced. They will be leaving 365 employees in Quincy.
Tuesday, September 07, 2010
Notes from Littler Mendelsohn
Recent Developments Relevant to Federal Government Contractors: August 2010
August 2010
OFCCP Initiates Regulatory Revisions for Affirmative Action Obligations Toward Individuals with Disabilities and Covered Veterans
Advanced Notice of Proposed Rulemaking ("ANPRM") Regarding Section 503 of the Rehabilitation Act Relating to Meaningful Outreach for Individuals with Disabilities
In anticipation of strengthening the regulations requiring government contractors to engage in meaningful outreach for qualified individuals with disabilities and before issuing actual proposed regulations, the Office of Federal Contractor Compliance Programs (OFCCP) is asking government contractors to respond by September 21, 2010, to 18 questions.
The questions can be categorized into several categories: (1) how can affirmative action requirements for individuals with disabilities be made more effective; (2) what affirmative action efforts for individuals with disabilities have proved effective for federal contractors; (3) whether the establishment of placement goals for individuals with disabilities would be feasible and effective and how placement goals for individuals with disabilities could be established; (4) whether soliciting self-identification of disability status of all applicants would be effective in opening more opportunities to individuals with disabilities; and (5) what special considerations should OFCCP account for in revising its affirmative action obligations for individuals with disabilities with regard to small entities and businesses.
Below are the specific questions from OFCCP's July 23, 2010 ANPRM:
- How can the affirmative action requirements of Section 503 be strengthened to measurably increase employment opportunities of covered contractors for individuals with disabilities? If available, include examples or information illustrating the effectiveness of the suggested new requirements.
- What measures have contractors and subcontractors taken to fulfill the current affirmative action requirements of Section 503? How much did these measures cost?
- What barriers currently impede Federal contractors from hiring people with disabilities?
- Are there changes that could be made to the existing language on permissible qualifications standards that would better ensure equal employment opportunities for individuals with disabilities?
- If OFCCP were to require Federal contractors to conduct utilization analyses and to establish hiring goals for individuals with disabilities, comparable to the analyses and establishment of goals required under the regulations implementing Executive Order 11246, what data should be examined in order to identify the appropriate availability pool of such individuals for employment?
- Would the establishment of placement goals for individuals with disabilities measurably increase their employment opportunities in the Federal contractor sector? Explain why or why not.
- What experience have Federal contractors had with respect to disability employment goals programs voluntarily undertaken or required by state, local or foreign governments?
- What specific employment practices have been verifiably effective in recruiting, hiring, advancing, and retaining individuals with disabilities?
- To what extent does workplace flexibility, including flexibility in work schedules, as well as job-protected leave, impact recruitment and retention of individuals with disabilities?
- Has training of employees and/or managers been effective in increasing advancement and/or retention of individuals with disabilities? If so, how?
- Federal contractors are required to invite all job applicants to voluntarily and confidentially identify their race and gender pre-offer. The collection of this information allows contractors to monitor the impact of their employment practices by race and gender and to assess progress in meeting their affirmative action goals. Existing Section 503 regulations require contractors to invite applicants to voluntarily and confidentially self-identify as a person with a disability after making an offer of employment but before the applicant begins employment. (See 41 CFR § 60-741.42(a).) Would amending the Section 503 regulations to require contractors to invite all applicants to voluntarily and confidentially self-identify if they have a disability prior to an offer of employment enhance a federal contractor's ability to more effectively monitor their hiring practices with respect to applicants with disabilities? Note that a Section 503 regulation requiring contractors to invite voluntary and confidential self-identification as an applicant with a disability pre-offer for affirmative action purposes would not violate the Americans with Disabilities Act. 29 CFR § 1630.15(e); Enforcement Guidance: Preemployment Disability-Related Questions and Medical Examinations (EEOC Notice Number 915.002, October 10, 1995).
- How can linkage agreements between Federal contractors and organizations that focus on the employment of individuals with disabilities be strengthened to increase effectiveness? Do linkage agreements have better outcomes when higher level company officials are responsible for their implementation/execution? Include examples of cooperative agreements between employers and disability or community recruitment organizations that have been helpful in hiring persons with disabilities.
- What impact would result from requiring that Federal contractors and subcontractors make information and communication technology used by job applicants in the job application process, and by employees in connection with their employment fully accessible and usable by individuals with disabilities? What are the specific costs and/or benefits that might result from this requirement?
- What other specific changes to the Section 503 regulations might improve the recruitment, hiring, retention, and advancement of individuals with disabilities by Federal contractors?
- Regulatory Flexibility Act–Consistent with the Regulatory Flexibility Act, the Department must consider the impacts of any proposed rule on small entities, including small businesses, small nonprofit organizations and small governmental jurisdictions with populations under 50,000. In response to this ANPRM, the Department encourages small entities to provide data on how additional requirements under Section 503 may impact them.
- OFCCP seeks public comment on the types of small entities and any estimates of the numbers of small entities that may be impacted by this rule.
- OFCCP seeks public comment on the potential costs of additional 503 requirements on small entities.
- OFCCP seeks public comment on any possible alternatives to the proposed measures that would allow the agency to achieve their regulatory objectives while minimizing any adverse impact to small businesses.
In our opinion, it seems that the two greatest obstacles to meaningful change in the regulations are: (1) the concern that if contractors that solicit this information at the pre-offer stage, they will be exposed to a greater proportion of failure to hire claims based on disability; and (2) there already are substantial record keeping obligations for federal contractors that place extraordinary burdens on strained human resource and recruiting departments, and adding yet another layer of bureaucracy will dissuade companies from agreeing to contract with the government.
Littler's OFCCP Practice Group intends to submit comments to the Agency and would welcome client and contractor input. Please contact Alissa Horvitz, ahorvitz@littler.com, or Joshua Roffman, jroffman@littler.com, if you would like us to relay your anonymous answers to the OFCCP.
Proposed Regulations for Improved Outreach and Reporting Regarding Affirmative Action Obligations for Covered Veterans Submitted to the White House by OFCCP
On July 2, 2010, OFCCP sent to the Office of Management and Budget ("OMB") its proposed rule relating to "Affirmative Action and Nondiscrimination Obligations of Contractors, Subcontractors, Evaluation of Recruitment and Placement Results under the VEVRAA of 1974, As Amended."
OFCCP has previously announced that it wants to strengthen the extent to which government contractors are engaging in meaningful outreach for covered veterans, and this was a topic that Director Patricia Shiu covered extensively in her town hall meetings last year and this year.
Once OMB approves the proposed regulation, OFCCP will submit it for publication in The Federal Register, and will afford contractors an opportunity to submit comments.
The White House's National Equal Pay Enforcement Task Force Calls for Re-Establishment of the Equal Opportunity Survey and for Rescission of OFCCP's Compensation Standards Among Other Recommendations
On July 20, 2010, the White House's National Equal Pay Enforcement Task Force issued recommendations to address pay inequities in the work place, especially those negatively impacting women. The National Equal Pay Enforcement Task Force is comprised of officials from the Equal Employment Opportunity Commission, the Department of Justice, the Department of Labor (including officials from the Office of Federal Contract Compliance Programs), and the Office of Personnel Management. Several of the Task Force's recommendations are of interest to federal contractor community:
- Reinstate the Equal Opportunity Survey or Establish a Similar Survey
The Task Force calls for OFCCP to issue an Advanced Notice of Proposed Rulemaking to seek input from stakeholders on what data should be collected and ways to diminish the burdens of the survey in reestablishing the EO Survey or a similar survey of federal government contractors. The pending Paycheck Fairness Act, which has passed the U.S. House of Representatives but not the Senate, would require the reinstatement of the EO Survey. It now seems likely that OFCCP will develop a new EO Survey, whether or not Congress passes the Paycheck Fairness Act.
The previous EO Survey was established late in the Clinton administration and then abandoned by the Bush administration based on its finding that the survey did not effectively serve OFCCP's mission. When the EO Survey was used, it was sent each year to almost 50,000 federal government contractor locations. It sought information on the location's affirmative action plan, job listings, as well as summary data of the location's employment activity and compensation by EEO-1 category, broken out by both gender and race/ethnicity.
- Rescind OFCCP's 2006 Compensation Standards
In a move that has been expected, the Task Force calls for OFCCP to publish a Notice of Proposed Rescission of the Agency's 2006 Compensation Standards. The Standards established that OFCCP would focus its investigative resources vis-à-vis compensation exclusively on systemic cases. Under the Standards, OFCCP established a three-step approach to evaluate contractors' compensation practices. The final step of analysis, which OFCCP imposed on itself before it would issue a Notice of Violations asserting systemic compensation discrimination, involved the development of similarly situated employee groups ("SSEGs") and an analysis using multiple regression analysis to assess whether any pay disparities by gender or race/ethnicity were unexplained.
The Standards had a troubled history. First among many was the fact that the development of SSEGs of sufficient size to allow the development of meaningful statistical models proved incredibly difficult in the context of a typical single establishment affirmative action plan, which more times than not did not have enough employees or too diverse a workforce to allow the development of statistically sound groupings and models. Another problem was the fact that U.S. Supreme Court seemed to reject the very legal principle upon which the Standards were based in its Ledbetter v. Goodyear Tire decision, which held that pay discrimination claims under Title VII must be based on decisions, not disparities. As OFCCP's Standards focused only on pay disparities, the Ledbetter decision proved problematic, despite OFCCP's assertion that the decision did not apply to the Agency. Even after passage of the Lilly Ledbetter Fair Pay Act in 2009, OFCCP's Standards remained out of step with Title VII law on compensation discrimination, as the new law still required that a claimant point to a discriminatory decision., while OFCCP continued to focus on disparities.
It is unclear whether OFCCP will abandon its Compensation Guidelines, which accompanied the Standards and provided contractors with an approach that they could follow if they wanted to develop SSEGs and multiple regression analyses of their compensation practices. It seems likely that the Guidelines will be rescinded along with the Standards, creating even greater reason for contractors to refrain from developing regression models for the purpose of evaluating their compensation within the context of its affirmative action plans—something that Littler has advised clients against doing for some time now.
Even without the formal rescission of the Standards, we have seen OFCCP move away from statistical analyses of compensation, allowing its compliance officers to analyze compensation using cohort analyses by job title or within a job group. It seemed to be only a question of time before OFCCP formally abandoned its Standards.
It is unknown what approaches to evaluating compensation OFCCP will develop as it replaces the Standards. At a minimum, we would expect the Agency to give itself more flexibility in how it evaluates contractors' compensation practices. At the same time, we are fearful that OFCCP may return to some previously-used and much maligned pay grade-based methodologies to evaluate compensation, such as the infamous DuBray method.
- Rescind OFCCP's Active Case Management Directive
The Task Force called for rescission of OFCCP's Active Case Administration ("ACM") directive. Established under the Bush administration, ACM called for the Agency to focus its investigatory resources almost exclusively on cases with indicators of systemic discrimination. Under ACM, OFCCP did no more than a cursory review of a contractor's desk audit submission if the data did not show any indicators of systemic discrimination in hiring, promotion, termination, or compensation. ACM also called for "focused" reviews in those instances and areas where indicators were found. Very few OFCCP compliance reviews were subject to a full desk audit and even fewer to an on-site compliance evaluation if the desk audit submission did not show statistical evidence of systemic discrimination.
This approach seemed to enable OFCCP to conduct more compliance reviews and recover larger financial remedies in those that it pursued. At the same time, OFCCP all but ignored other aspects of contractors' affirmative action plans, such as the contractor's action-oriented programs and good faith efforts to address placement goals. Over the last year, there has been a decided movement away from focusing almost exclusively on systemic cases, and OFCCP has begun to emphasize "full compliance." The rescission of ACM would simply formalize this change. Indeed, OFCCP had given us a preview of this development when it called for compliance reviews conducted under its September 2009 American Recovery and Reinvestment Act ("ARRA") directive to not follow ACM.
- Increased Coordination Between the Department of Labor, the Department of Justice, and the Equal Employment Opportunity Commission
- Abolish Limits on the Number of Full Compliance Reviews that OFCCP Can Conduct at One Time
Executive Agencies Issue Interim Final Rule Requiring Contractors to Identify Their Subcontractors and to Disclose Executive Compensation Information
As of July 8, 2010, a new interim rule has been added to the Federal Acquisition Regulations increasing the reporting burden on federal contractors. The rule requires that, by the end of the month following the month a contract is awarded, and annually thereafter, the contractor must report all first-tier subcontract awards expected to amount to $25,000 or more, as well as the names and total compensation of the contractor's five highest paid executives for the contractor's preceding completed fiscal year. The same data must be provided for each qualifying subcontractor. The contractor is responsible for reporting each qualifying subcontractor's data, and notifying such subcontractors that the required information will be made public. This reporting requirement will be inserted as a clause in most solicitations and contracts with a value of $25,000 or more, including commercially available off-the-shelf (COTS) item contracts, as well as actions under the simplified acquisition threshold (currently $100,000) but meeting the $25,000 threshold. Existing indefinite-delivery indefinite-quantity contracts are to be amended accordingly. Federal contractors now have to answer three questions:
- Do I have to report our executive compensation?
- Do I have to report this particular subcontract?
- Do I have to report the executive compensation of this particular subcontractor?
A "yes" to any of those questions imposes a reporting burden, but the answers will depend on several provisions and exemptions sprinkled throughout the new rule.
Exemptions and Exclusions from the New Interim Rule
- Classified solicitations and contracts, and contracts with individuals are exempt from the new reporting requirements.
- The definition of first-tier subcontract specifically excludes "supplier agreements with vendors, such as long-term arrangements for materials or supplies that would normally be applied to a contractor's general and administrative expenses or indirect cost."
- Any contractors whose gross income in the previous tax year is less than $300,000 are exempted entirely from the requirement to report subcontractor awards (but not necessarily the requirement to report the contractor's own executive compensation).
- Similarly, if a subcontractor's gross income in the previous tax year is less than $300,000, the contractor does not need to report awards to that subcontractor.
- Finally, a contractor (prime or sub) is only required to report executive compensation data if, in the previous fiscal year such contractor received 80 percent or more of its annual gross revenues from Federal contracts, loans, grants and cooperative agreements, and $25,000,000 or more in annual gross revenues from the same, and the public does not already have access to the executive compensation information through public filings as required under the Securities and Exchange Act of 1934 or section 6104 of the Internal Revenue Code of 1986. It is presumed that 80-85 percent of contractors and subcontractors will fall into at least one exemption.
Phase-in Schedule for 2010 and 2011
Even if a contractor and subcontractor are not exempted, whether a particular subcontract must be reported is subject to the following phase-in schedule. Until September 30, 2010, the new rule applies only to newly awarded subcontracts if the prime contract award amount is $20,000,000 or more. Beginning October 1, 2010, subcontractor reporting applies if the prime contract is for $550,000 or more. Finally, beginning March 1, 2011, the rule will apply to all prime contracts of $25,000 or more.
Comments on this interim rule need to be submitted by September 7, 2010, and may be submitted on-line, by fax, or mail. The agencies are particularly interested in comments as to whether this collection of information is necessary and ways in which the burden of collecting the information can be minimized.
Wall Street Financial and Regulatory Reform Act Creates New Internal Diversity Obligations for Companies Wishing to Contract with Federal Financial Agencies
The Wall Street Financial and Regulatory Reform Act contains provisions requiring the following federal agencies to develop new Offices of Minority and Women Inclusion and standards for ensuring that companies that wish to contract with these agencies themselves have a sufficiently diverse workforce:1
- The Departmental Offices of the Department of the Treasury
- The Federal Deposit Insurance Corporation
- The Federal Housing Finance Agency
- Each of the Federal Reserve Banks
- The Board of Governors of the Federal Reserve System
- The National Credit Union Administration
- The Office of the Comptroller of the Currency
- The Securities and Exchange Commission
- The (new) Bureau of Consumer Financial Protection
Each agency's Office of Minority and Women Inclusion will be required to develop standards for:
- Equal employment opportunity, and the racial, ethnic, and gender diversity of the workforce and senior management of the agency;
- Increased participation of minority-owned and women-owned businesses in the programs and contracts of the agency, including standards for coordinating technical assistance to such businesses; and
- Assessing the diversity policies and practices of entities regulated by the federal agencies listed above.
The Director of these new offices will be promulgating regulations at some point in the future in an effort to develop and implement standards and procedures to ensure "the fair inclusion and utilization of minorities, women, and minority-owned and women-owned businesses in all business and activities of the agency at all levels, including in procurement, insurance, and all types of contracts."
The types of contracts that will be affected by these new standards include:
all contracts of an agency for services of any kind, including the services of financial institutions, investment banking firms, mortgage banking firms, asset management firms, brokers, dealers, financial services entities, underwriters, accountants, investment consultants, and providers of legal services.
Moreover, these contracts include "all contracts for all business and activities of an agency, at all levels, including contracts for the issuance or guarantee of any debt, equity, or security, the sale of assets, the management of the assets of the agency, the making of equity investments by the agency, and the implementation by the agency of programs to address economic recovery."
The agencies identified above will be required to report annually to Congress the following five information points:
- A statement of the total amount paid by the agency to contractors since the previous report;
- The percentage of amounts described above that were paid to minority-owned and women-owned businesses;
- The successes achieved and challenges faced by the agency in operating minority and women outreach programs;
- The challenges the agency may face in hiring qualified minority and women employees and contracting with qualified minority-owned and women-owned businesses; and
- Any other information, findings, conclusions, and recommendations for legislative or agency action, as the Director (of each Office) determines appropriate.
Finally, the Director of each Office of Minority and Women Inclusion will include a procedure for the Director to make a determination whether a contractor, and, as applicable, a subcontractor, has failed to make a good faith effort to include minorities and women in its workforce. Upon receipt of a recommendation from the Director, the agency's administrator may (1) terminate the contract or (2) make a referral to the Office of Federal Contract Compliance Programs, or take other appropriate action.
In short, companies that want to do business with any of these federal agencies in the future can expect a significant increase in the extent to which these agencies probe the racial and gender composition of the contractor's workforce as part of the contract award process.
Department of Labor Administrative Law Judge Rejects OFCCP's Assertion that It Can Extend the Period of Review for a Compliance Review Forward After the Date that the Compliance Review Was Initiated by OFCCP
On July 23, 2010, a Department of Labor Administrative Law Judge ("ALJ") found that OFCCP impermissibly sought to extend the desk audit phase of a compliance review to cover employment activity that occurred after the date that the compliance review was initiated by OFCCP. The case involved a compliance evaluation that OFCCP initiated in July 2007 of a Frito-Lay facility in Dallas, TX. Frito-Lay's desk audit submission covered the period from January 1, 2006 through June 30, 2007. In response to subsequent information requests, Frito-Lay provided hire and applicant data going back to July 2005—two years before the date that OFCCP initiated the compliance review—and forward to December 31, 2007, which was the end of Frito-Lay's current affirmative action plan year at the time the compliance review was initiated.
In November 2009, as the compliance review remained at the desk audit phase, OFCCP requested applicant and hire data for one job group where OFCCP's initial analysis of the 2005-2007 data showed a disparity in hiring between female and male applicants. Frito-Lay declined to provide the data, asserting that hire and applicant data for 2008 and 2009 was not relevant to a compliance review that was initiated in 2007.
On April 28, 2010, OFCCP filed an Administrative Complaint asserting that Frito-Lay had refused to provide data it was required to submit to OFCCP. OFCCP's based its position on the notion that agencies have broad authority to gain access to records and documents and that, by implication, there was no temporal limit to the relevancy of documents to a compliance review. In support of its position, OFCCP relied heavily on administrative case law that allowed broad discovery to OFCCP in the enforcement context, sometimes covering several years.
Frito-Lay countered that none of the cases relied upon by OFCCP took place in the context of a compliance review and that the underlying compliance review in each of the cases cited by OFCCP in fact covered a period of between one to two years, implicitly supporting Frito-Lay's contention that a compliance review is limited to the period of time (up to two years in cases where the Agency is investigating potential discrimination) preceding the date that the compliance review was initiated.
Frito-Lay pointed to consistent language in the regulations promulgated in 1997 by the Clinton administration that OFCCP's initial regulatory intent was to have a compliance review assess activity prior to the date that the compliance review began, and potentially going backwards up to two years. Comments to the 1997 regulations stated so much and also stated that OFCCP would define the parameters of a compliance review in its Federal Contract Compliance Manual ("FCCM").
OFCCP argued that the FCCM was not binding on the Agency and conferred no rights on a private party such as Frito-Lay. Frito-Lay countered that OFCCP's 1997 regulations specifically established the Agency's intent to define the timeframe and other relevant parameters of a compliance review in the FCCM.
The ALJ agreed with Frito-Lay, holding that the "EO, regulations, case law and the FCCM contemplate that the temporal scope of the desk audit phase of a compliance review cannot be extended beyond the date that the contractor received its Scheduling Letter."
The ALJ's decision is an important victory for the contractor community, as in the last year or two, both in presentations and in some compliance reviews, OFCCP has asserted that it has the authority to extend an audit going forward as the Agency saw fit. In its presentations on this issue, OFCCP consistently cited cases that addressed the temporal scope of discovery in an enforcement proceeding. None of these cases addressed the issue of the temporal scope of the compliance review itself. Indeed, the actual compliance reviews within those enforcement cases consistently were limited to a period of two years or less.
In advocating for this authority, OFCCP downplayed the legal significance of language within its own regulatory framework and the FCCM, which consistently state that compliance reviews look at activity that occurred prior to the initiation of the audit. Moreover, and paradoxically for the contractor community, at the same time that OFCCP began asserting that it had the authority to extend the timeframe for a compliance review forward, individual OFCCP officials continued to refuse to allow government contractors to introduce information about their employment practices after the date that the compliance review began, arguing, among other things, that the information could be "tainted." In deemphasizing the legal importance of the regulatory framework promulgated by the Clinton administration and the FCCM, it appears that OFCCP may be less concerned with what were likely the primary policy reasons that the compliance review framework was set up the way it was under the Clinton administration—specifically, a desire and intent to conduct compliance reviews quickly and worry that contractors might "taint" data for periods that occurred after they received their scheduling letters.
Despite this important victory for the contractor community, the ALJ's decision revealed the limitations of litigation as a way to establish and clarify existing law and regulations. As the matter at hand was still at the desk audit phase, the ALJ's decision addressed the temporal scope of only the desk audit phase of a compliance review. Nonetheless, the regulatory guidance relied upon by Frito-Lay applies to the entirety of a compliance review; not just the desk audit phase. That being said and importantly, the ALJ did not hold that a different temporal scope applied to other phases of a compliance review. But because the case was still at the desk audit phase, his decision was narrowly focused on that phase of the audit.
It is expected that OFCCP will file exceptions to the ALJ's decision with the Department of Labor's Administrative Review Board. Frito-Lay was represented in the matter by Littler Mendelson Shareholder Joshua Roffman.
1 Although the label "Office of Minority and Women Inclusion" is the same label that legislators gave to the oversight office that the Federal Housing Finance Agency was ordered to create in legislation passed in 2008, (Housing and Economic Recovery Act of 2008, 122 Stat. 2654), these new Offices of Minority and Women Inclusion in the Wall Street Financial Regulatory and Reform act are substantially broader. Proposed regulations implementing the Offices of Minority and Women Inclusion for the FHFA, Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, were published on January 11, 2010, 75 Fed. Reg. 1289. Proposed regulations specifically dealing with equal opportunity in contracting appear in 12 CFR § 1207.11 (FHFA itself) and 1207.21 (Office of Finance and the regulated entities), but other than requiring contractors to commit to principles of EEO and nondiscrimination, there are no requirements that the agencies themselves assess the diversity of the contractors' workforces or face contract termination.
Manpower Survey
U.S. employers anticipate a slight gain in employment levels for Quarter 4 2010, the fourth successive quarter of modest to favorable hiring plans, according to the seasonally adjusted results of the latest Manpower Employment Outlook Survey, conducted quarterly by Manpower Inc.
Sunday, September 05, 2010
Survey: More Employers Use Facebook To Vet New Hires Than LinkedIn
PaidContent.org reports that
Facebook may be the stickiest social network here in the U.S.—but LinkedIn is thought to be the default network for a “professional” profile and job history. So why are more employers using Facebook to do background checks on potential new hires than LinkedIn?
Almost 30 percent of hiring managers said they were using Facebook to research new hires, according to new survey data from CareerBuilder—edging out the 26 percent that said they were using LinkedIn.
That doesn’t surprise eMarketer Senior Analyst Debra Aho Williamson, who said that while LinkedIn was very good at being an “online resume,” it was also increasingly important for employers to see how a potential new hire would act outside of work. “Facebook is where people spend their personal time, and until the network finds a better way for people to segment what info outsiders can see, it’s all fair game for employers,” Williamson said.
That lends more credence to Facebook members’ requests for less complex, more transparent privacy controls—but also points to a potentially untapped revenue stream: if employers are using the network to check up on candidates, maybe they’d want to pay to post job listings on Facebook as well.
The CareerBuilder survey also shows how quickly social network searches have become an integral part of the recruitment process: overall, nearly half (45 percent) of survey respondents said they were checking new hires’ social media profiles, up from just 22 percent last year. (Which is likely why the company launched its own career-centric social net, BrightFuse.com, per SAI). CareerBuilder polled over 2,600 hiring managers in June for the data.
Friday, September 03, 2010
Health Care Reform Update From Franczek Law Firm
As mentioned in a previous alert, group health plans will be subject to new claims and appeals requirements under the Patient Protection and Affordable Care Act (PPACA), signed into law on March 23, 2010, as modified by the Health Care and Education Affordability Act of 2010 (“Reconciliation Bill” and combined, “Health Care Act”). In July and August, the Departments of Treasury, Labor, and Health and Human Services issued interim final regulations and other guidance regarding these new requirements.
The new claims and appeals procedures apply to all non-grandfathered group health plans and are effective on the first day of the first plan year beginning on or after September 23, 2010. These changes will require all sponsors of non-grandfathered plans to revise their plan documents, summary plan descriptions and other communications to participants and beneficiaries.
The claims and appeals procedures under Section 503 of ERISA (as amended by the Health Care Act) will now apply to all non-grandfathered group health plans, regardless of whether a plan is subject to ERISA. The ERISA claims and appeals procedures are, however, modified as follows:
Definition of “Adverse Benefit Determination”: The definition of “adverse benefit determination” for purposes of claims and appeals now includes any rescission of coverage that has a retroactive effect, regardless of whether there is an adverse effect on any particular benefit.
Notification of Urgent Care Determinations: The deadline for providing notice in the case of an urgent care claim has been shortened from 72 hours to 24 hours.
Additional Criteria for “Full and Fair Review” on Appeal: Claimants must be allowed to present “evidence and testimony” during the initial claim and internal appeal process. This new standard may require a plan to hear testimony as part of the claims process.
Avoiding Conflicts of Interest: Decisions regarding compensation and other similar matters for individuals who decide internal claims and appeals cannot be based on the likelihood that the individual will support a denial of benefits.
Additional Content for Benefit Denial Notices: Benefit denial notices must contain additional information, including, for example, diagnosis, treatment and denial codes. The DOL has issued model notices that incorporate the new content requirements.
Foreign Language Requirements: Group health plans with a certain threshold of participants who are literate only in a common non-English language are required to provide foreign language benefit denial notices.
Deemed Exhaustion of Internal Process for Less than Strict Compliance: If a plan fails to strictly follow all of the claims and appeals requirements, a claimant is permitted to sue the plan in court or initiate an external appeal as if the claimant had exhausted all internal claims procedures. If the claimant sues in court, the claim or appeal will be deemed to have been denied without the exercise of fiduciary discretion, meaning the court will review the claim or appeal de novo (without deference to the claims administrator’s decision).
External Review Process: Plans must now have an external review process for claimants who have exhausted internal review procedures. The external review process must meet certain requirements as outlined in the regulations and in other recent guidance issued by the DOL (Technical Release 2010-01).
The specific requirements for state and federal external review processes are detailed and require coordination with independent review organizations. We therefore strongly recommend that plan sponsors work with counsel to ensure that plans are in compliance with these requirements.
Thursday, September 02, 2010
Visions from Orlando Part II
I am sitting in a session at HR Florida tate Conference and the session facilitator( who is an attorney by the way) states he sees nothing wrng with doing credit and background checks, including looking at social media, because it is an excellent tool to find out whether the candidate fits within the corporate culture. He added the caveat that you can not use it to discriminate against someone, but it increases the rate of quality of hires. Think about your own views and your organization's policies. Do you agree with his statements and if so why is it a best practices?
Visions from Orlando
Let me start with confession time - I have been a member of SHRM since 1992 and I always seemed to have had some excuse why I would not commit to attending a SHRM conference whether it was at the state or national level. Well I bit the bullet and just got back from the HR Florida 2010 Conference attended by 1420 fellow HR professionals from around the southeast and internationally. The field director from SHRM says it was one of the largest regional conferences she has attended. Having said that I came away from the meetings with some observations that are worth presenting here:
- We are waiting for everything to return to normal - Fairly often we hear this phrase in talking to corporate America. The common theme from the sessions I attended was that we are not going to return to that normal. In its place will be a new normal consisting of a changed work environment. We can expect more government intervention and a greater push to unionization. There will be a changed focus on working local rather then sending expats all over the world.
- What the C- Suites Want - If we are going to be active in our organizations we have to become part of the organization. I know you are saying but I have been, but are you? Can you talk the talk and walk the walk with the C-Suite? Do you know how to speak the language of business? Do you know how to use analytics to demonstrate what role HR plays within the organization. It was stressed in several sessions that the road to success in the future is through HR, C-Suite just does not know what it is we do.
- Social Media World - I heard many of my peers who are unsure about the social or new media world. One HR professional suggested that he was concerned that the employees were not collaborating with each other because they were using social media rather than face to face meetings. In this day and age it is critical that HR comes into the 21st century. The new media is colaboration at its perfection. It is albout the conversation.
- Did he really say that? - There were several interesting comments passed in sessions over the several days of the conference. The first was from a well respected outplacement consultant who categorically stated that the reason corporations look for passive candidates was ebcause the unemployed did not have the up to date skill sets required by the business world. I would suggest that the view is out of touch with reality of today's job market. In another session ( held ironically at 7am in the morning when all good HR people are wide awake and alert) the presenter made two observations which were different but interesting. The first is that in spite of the rhetoric from the Tea Party and the GOP, the government debt level in the US us lower than most other countries in the world. The second was that he was working with an information systems organization which was looking for a lower cost location for call centers and had decided to move the centers from India to Ireland and Wisconsin because it was less expensive. Yes, I did say Wisconsin. Based on living in sunny Florida I would not move to Wisconsin but that was where they weremoving.
- Healthcare Reform - I attended a session on workplace advocacy and it was mentioned that some corporations were taking a wait and see view towards the health care reform movement. The Advocacy staff from SHRM said this was the wrong approach. Even if the GOP won big in November there are not enough votes in Congress to overturn the law, So the advice is start now to make the necessary adjustments in your healthcare plans so you are ready as the new requirements come on line.
Wednesday, August 25, 2010
Hey I have a great idea to solve HR shortages. Hire an Intern.
From the Jackson Lewis Law Firm
Employers may have their pick of applicants to fill paid and unpaid internship positions this fall. Internships traditionally are sought by college students to gain work experience, but the recession and the resulting loss of jobs have prompted people of all experience levels to apply for internships with companies in order to get their feet in the door. Employers, however, must be aware of the wage-hour laws' impact on such arrangements.
A survey conducted for CareerBuilder between May 18, 2010, and June 3, 2010, of more than 2,500 employers shows more than one-half (52%) of them saying they are likely to hire interns as full-time, permanent employees. The survey, released August 11, 2010, shows that almost one-quarter (23%) of employers are seeing experienced workers (defined as having more than 10 years of experience) and mature workers (defined as those age 50 or older) applying for internships at their organizations. Additionally, more than one-quarter (27%) of employers say they plan to hire interns during the rest of 2010.
Often, either inadvertently or by design, employers do not treat interns as employees. Instead, interns are frequently labeled trainees, assistants, or learners and receive little or no pay for the work they perform. Unless a job meets certain conditions, interns are considered employees and for-profit companies must pay them at least the minimum wage under federal and state laws.
Federal Criteria
The federal Fair Labor Standards Act (FLSA) defines an employee as "any individual employed by an employer." 29 U.S.C. § 203(e)(1). The FLSA definition of employ includes "to suffer or permit to work." In 1947, the U.S. Supreme Court held that the FLSA definition of employ does not make all persons employees who, without any express or implied compensation agreement, may work for their own advantage on the premises of another. Walling v. Portland Terminal Co., 330 U.S. 148. The Court pointed to six criteria that characterize interns or trainees who need not be paid:
- The training, even though it includes actual operation of the employer's facilities, is similar to that which would be given in a vocational school;
- The training is for the benefit of the trainees;
- Trainees do not displace regular employees, but work under close observation;
- The employer that provides the training derives no immediate advantage from the activities of the trainees and, on occasion, the employer's operations may actually be impeded;
- The trainees are not necessarily entitled to a job at the completion of the training period; and
- The employer and the trainee understand that trainees are not entitled to wages for the time spent in training.
The U.S. Department of Labor consistently has applied these criteria in answering inquiries about the employment status of interns. Accordingly, whether or not interns at your organization are employees under the FLSA will depend upon all the circumstances of their activities. Provided the six criteria listed above are met, the Department of Labor says workers will not be considered employees if...
- Educational or training programs are designed to provide them with professional experience in the furtherance of their education; and
- The training is academically oriented for the benefit of the students.
Generally, employers must comply with all FLSA provisions and with state laws that are more restrictive in favor of the employee or require higher pay.
State Laws
State rules relating to the employee/unpaid-intern distinction vary. For example, to determine whether an intern is or is not an employee, the California Division of Labor Standards Enforcement (DLSE) applies the six Walling criteria (the DLSE uses "student" synonymously with "trainee").
The Colorado Department of Labor and Employment Minimum Wage Order No. 26 provides that students employed in a work experience study program are exempt from all of the Order's provisions, including the requirement to pay minimum wage. Consequently, the provisions of the FLSA apply to determinations whether a Colorado worker is an employee.
In Alaska, the Alaska Administrative Code allows for the employment of "student learners" (undefined in the law) at subminimum wages for fixed periods, subject to certain restrictions. An exemption from minimum wage is available when a student learner is enrolled in a course of study and training in a cooperative vocational training program under a recognized state or local educational authority or in a substantially similar program conducted by a private school. The employer and the student learner's school coordinator or principal must apply for the exemption from the Alaska Department of Labor and Workforce Development. Such a subminimum wage rate cannot be less than 75% of the state minimum wage. 8 AAC §15.125.
* * *
Employers who are planning to take on unpaid interns should become familiar with federal and state criteria for deciding whether a worker is an employee and take a hard look at how much productive work will be performed by their interns.
Whether labeled an intern, learner or employee, if a worker should have been paid but was not, the employer may find itself liable not only for wages, but also for overtime pay, employee benefits, meal and rest periods, and penalties.
Tuesday, August 24, 2010
And the Beat Goes On
First we had Illinois passing legislation that prohibits the use of credit checks in most hiring decisions, now Massachusetts has passed and the Governor has signed into law an amendment to the Massachusetts Personnel Records Statute that requires employers to notify an employee within ten days of placing in the employee's personnel file any information that "is, has been used or may be used" to negatively affect an employee.
Ford and Harrison Legal Alert
On August 13, 2010, President Obama signed into law H.R. 6080 known as the Emergency Supplemental Appropriation for Border Security Act. This law became effective immediately and includes an increase of certain H-1B and L-1 application fees. The U.S. Citizenship and Immigration Service ("USCIS") will review H-1B and L-1 applications filed on or after August 14, 2010 for compliance with the new fees. If a company filed qualifying H-1B or L-1 applications after August 14, 2010 without the new fees, USCIS will hold the applications and issue a Request for Evidence ("RFE") to provide the employer an opportunity to submit the new fee or evidence that the employer is not obligated to pay it. If an employer believes it is not subject to the fee, it can provide USCIS evidence supporting that fact. Acceptable evidence would include a written attestation from the employer explaining why it is not subject to the new fee and any other additional information that supports the company's position. Further information is forthcoming, and USCIS is currently working on revising Form I-129 to conform to the law.
Who Must Pay the Additional Fee?
Affected employers are those who (1) employ 50 or more employees in the U.S.; and (2) 50% or more of the U.S. employees are H-1B or L-1 nonimmigrant workers. This is referred to as the "50-50 Rule."
Which Immigration Applications are Affected?
If you are a covered employer, you must pay the additional filing fee for initial and change of employer H-1B or L-1 applications. On the other hand, the additional fee does not apply to an H-1B or L-1 extension application filed by the same employer on behalf of an H-1B or L-1 employee for whom it previously filed an initial application.
How Does an Employer Calculate Whether it has 50% or More H-1B or L-1 Workers in the U.S?
For purposes of evaluating whether a company has a U.S. workforce that is comprised of 50% or more H-1B and L-1 workers, a company must include all part-time and full-time H-1B and L-1 workers (including workers authorized to work under an L-2 dependent Employment Authorization Document). This calculation must be done based on a company's numbers at the time of filing a qualifying initial or change of employer application.
How Much is the Additional Fee?
The additional fee for initial and change of employer H-1B applications is $2000. This fee must be paid on top of existing fees (i.e. USCIS processing fee, Fraud Prevention and Detection Fee, ACWIA fee, and optional Premium Processing fee).
The additional fee for initial and change of employer L-1 applications is $2250. This fee must be paid on top of existing fees (i.e. USCIS processing fee, Fraud Prevention and Detection Fee, and optional Premium Processing fee).
If a company is subject to the new fee, it should issue a check in the appropriate amount made payable to the Department of Homeland Security and submit it with the application and other required fees.
If you have any questions regarding this issue or other business immigration issues, please contact the author of this Alert, Geetha Nadiminti, gnadiminti@fordharrison.com, any member of Ford & Harrison's Business Immigration practice group or the Ford & Harrison attorney with whom you usually work.
Monday, August 23, 2010
The clock is ticking
If you are required to complete them due to FTE base of more than 50 employees your 2010 VETS 100 and VETS 100A reports are due Spetember 30, Normal 0 false false false EN-US X-NONE X-NONE
The clock is ticking
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DOL issues guidance on clothes under FLSA
| DOL Addresses Meaning Of "Clothes" Under FLSA 08/18/2010 |
| The U.S. Department of Labor (DOL) recently clarified the definition of "clothes" under Section 203(o) of the Fair Labor Standards Act (FLSA). Section 3(o) provides that time spent "changing clothes or washing at the beginning or end of each workday" is excluded from compensable time under the FLSA if the time is excluded from compensable time pursuant to "the express terms or by custom or practice" under a collective bargaining agreement. The DOL now has concluded that this exemption "does not extend to protective equipment worn by employees that is required by law, by the employer, or due to the nature of the job." Note: This article was published in the July/August 2010 issue of The Employment Law Authority.Information received from Ogletree Deakins Law Firm |
Thursday, August 19, 2010
Is a Credit Check a Test for Employment Purposes?
by Eric Dunleavy, Ph.D., Senior Consultant, DCI Consulting Group
Earlier this month, OFCCP staff presented on a variety of EEO topics of interest to federal contractors at the National Industry Liaison Group (NILG) Conference. DCI staff attended an informative session from Dr. Richard Fischer, OFCCP Director of Testing Operations. The presentation was entitled ‘Enforcing Test Discrimination: Lessons Learned’, and there were a number of useful suggestions for navigating the landscape of employee selection in legally defensible ways.One topic that caused some confusion concerned what types of employment processes fall into the category of ‘a test’ that can be challenged under an adverse impact theory of discrimination. Dr. Fischer’s handout defined a test as ‘any practice, method, procedure, process, device, etc. in any format (online, written, performance, etc.), used to assess candidates for a high stakes decision.’ This definition is generally consistent with the Uniform Guidelines on Employee Selection Procures (UGESP), which are the federal regulations on adverse impact measurement and methods for demonstrating that a selection procedure is job-related and legally defensible.However, another handout noted that ‘Selection steps such as an employer reference check, medical or drug screening, criminal background check, credit check, verifying work history or investigation for a security clearance are not tests and need not be assessed for adverse impact.’This language caused some confusion about what steps in a selection process could be challenged by the agency under an adverse impact theory. Although in many situations the processes listed above are implemented post job offer, they could still produce substantial adverse impact against protected groups and affect overall applicant-to-hire adverse impact results. Some companies may implement similar steps pre-offer.Regardless, the status of credit checks and similar tools has important implications for federal contractor compliance. Obviously, if the selection steps above are not of interest to OFCCP, there would be no need to conduct step analyses on the consequences of these tools. Further, if the selection steps above are not of interest to OFCCP, it would be reasonable to remove applicants that are eliminated at those steps from the overall applicant-to-hire adverse impact analysis, as opposed to considering those applicants as rejected. Interestingly, the status of applicants who failed credit checks was an issue of contention in the recent Administrative Law Judge ruling in favor of OFCCP against Bank of America. That ALJ ruled that those applicants who failed a credit check should be included in the adverse impact analyses.This decision to not assess the adverse impact or job-relatedness of credit checks and similar tools was a surprise to DCI staff, because it was our understanding that courts and enforcement agencies have treated these types of tools as selection procedures that can be challenged under the UGESP. In fact, EEOC released an informal letter on credit checks in March 2010, reiterating that credit checks can be challenged under adverse impact theory, often have adverse impact against minority applicants, and may not be job-related for many jobs. The adverse impact and job-relatedness of credit checks and other screening tools were also an agenda topic at a commission meeting in 2007.To clarify the status of credit checks and similar tools in EEO analyses, DCI staff communicated with senior officials at DOL. DOL officials stated that this was a typo on the handout and confirmed that credit checks, drug screens, background investigations, and the other tools listed above may be considered selection procedures under UGESP, and may be challenged by OFCCP if they produce adverse impact against a protected group. Thus, it may be reasonable to include applicants who failed a credit check in the adverse impact analyses, and a step analysis is in the realm of possibility.There were a number of useful takeaways from Dr. Fischer’s presentation, including the following:- In the last 2 fiscal years, 44% of the tests reviewed by OFCCP experts were deemed discriminatory by the agency, either because there was no validity research, inadequate validity research, or because reasonable alternatives were available.- The percentage of discriminatory tests has dropped since 2005- In Fiscal Year 2009, 8% of OFCCP’s financial remedies collected in systemic discrimination cases came from testing cases.- If an OFCCP audit focuses on a test that produces adverse impact, the agency does not need a copy of the test. Dr. Fischer was clear that the actual test is not useful for evaluating the validity of a test, and that the research showing the job-relatedness of the test is of primary interest to the agency.- Interestingly, Dr. Fischer noted that there is no formal need for a bottom line adverse impact analysis to be statistically significant for the agency to focus on steps. Compliance officers may ask about steps in the selection process, and for selection step data, regardless of whether applicant-to-hire analyses show a statistically significant disparity. If any of those steps have impact, the contractor would be burdened with demonstrating job-relatedness.- OFCCP experts have seen too much emphasis on face validity (i.e., that the test content looks like it is job related without any actual research) and not enough emphasis on actual validity research (evidence supporting that employers can make good inferences and decisions from tests).- The Supreme Court ruling in Ricci v. Destefano has no direct implications for OFCCP enforcement, adverse impact analyses, the UGESP, or employment testing.
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