Federal contractors may see a number of regulations finalized in 2016, which could have an impact on both federal contractors and subcontractors. Employers who provide contracted and subcontracted services to the Federal Government need to be familiar with the proposed regulations to proactively plan for the impact these changes will have on budgeting, policy & procedure and necessary training to be in compliance with the changes.

 

OFCCP’s Pay Transparency Final Rule

 

This final rule was issued by OFCCP mandates that federal contractors are not permitted to discharge or discriminate against an employee or applicant because the individual inquired, discussed or disclosed compensation information of their own or of another employee or applicant.  Employers who enter into a new federal contract or modify an existing contract, on or after January 11, 2016 are subject to this final rule. The rule applies to any employer that:

 

1. Holds a single federal contract, subcontract, or federally assisted construction contract in excess of $10,000;

2. has federal contracts or subcontracts that have a combined total in excess of $10,000 in any 12-month period; or

3. holds government bills of lading, serves as a depository of federal funds, or is an issuing and paying agency for U.S. savings bonds and notes in any amount.

 

Employers can view detailed information about the Pay Transparency Final Rule in a Q&A format provided by the DOL at: http://www.dol.gov/ofccp/regs/compliance/faqs/PayTransparencyFAQs.html#Q10

 

Federal Contractor Paid Sick Leave

 

President Obama issued an executive order in 2015 that will enable employees under federal contracts to earn up to 7 days or more of paid sick leave annually; beginning in 2017. Regulations on this new paid sick leave will be issued by the DOL by September 30, 2016.

 

EEOC Proposal to Collect Pay Data

 

On January 29, 2016, the Equal Employment Opportunity Commission (EEOC) announced plans to revise the annual EEO-1 report; which will include pay data by gender, race and ethnicity. The EEOC and the Office of Federal Contract Compliance Programs (OFCCP) at the DOL are working jointly to improve enforcement and compliance with federal pay discrimination laws. This EEOC proposal is an expansion and replacement of a prior proposal under Executive Order 11246 to collect similar pay data from federal contractors; this expanded proposal will also apply to non-contractors.

 

This proposed revision to the Employer Information Report (EEO-1) will require employers will 100 or more employees, including federal contractors to collect and report pay data annually.

 

It is anticipated that employers will first be required to submit collected Pay Data for the 2017 reporting cycle, which must be reported by September 30, 2017.  However, employers would be required to collect pay data in 2016, because the data would be required to be collected from a prior 12 month period that begins between July 1 and September 30.

 

The Current EEO-1 Report requires some employers to annually report, by September 30th, the number of individuals they employ by job category as well as by race, ethnicity and sex. The employers that must report currently are:

 

– Certain federal contractors with 50-99 employees

– Private employers with 100 or more employees

 

Under the revised EEO-1 Report, some employers would also have additional reporting requirements and would be required to collect and submit pay data in their annual report. Employers who would be required to submit pay data are:

 

– Employers with 100 or more employees would submit data about pay

– Federal contractors with 100 or more employees would submit data about pay

 

Employers that will not be required to submit pay data included:

 

– Federal contractors with 50-99 employees, but these employers would continue to report ethnicity, race, and sex by job category

– Non-contractor employers with 1-99 employees and federal contractors with 1-49 employees would not be required to file the EEO-1 report

 

Employers who would be required to report this new data, should become familiar will the revisions now; to view a sample of the proposed EEO-1 form at: http://www.eeoc.gov/employers/eeo1survey/2016_new_survey.cfm.

 

The EEOC has also prepared Q&A page to address common questions about the proposed revisions and are available for viewing at: http://www.eeoc.gov/employers/eeo1survey/2016_eeo-1_proposed_changes_qa.cfm.

 

OFCCP’s Sex Discrimination Guidelines

OFCCP plans to update rules governing how federal contractors and subcontractors prohibit sex discrimination. The proposed rule contains several clarifications addressing a number of sex discrimination issues related to:

– Pay discrimination

– Sexual harassment

– Hostile work environments

– Pregnancy accommodations

– Gender identity discrimination

– Family caregiving discrimination

 

The rule intends to change the “Sex Discrimination Guidelines” to “Discrimination on the Basis of Sex” regulations to send a clear and powerful message that they have the force and effect of law. For more information, please see DOL News Release at: http://www.dol.gov/newsroom/releases/ofccp/ofccp20142186

 

Fair Pay & Safe Workplaces

Also known as the “blacklisting” rule; may or may not move forward in 2016. The webinar states that the Administration may proceed in issuing the final rule in 2016, however Congress has denied the DOL’s 2016 budget request to initiate the Office of Labor Compliance to help implement the rule.

 

This rule would require contractors to disclose “administrative merit determination, arbitral award or decision or civil judgment” in past three years for violations of 14 federal employment and labor laws or state equivalents before becoming eligible for a federal contract. These federal laws include:

– Fair Labor Standards Act (FLSA)

– Occupational Safety and Health Act (OSHA)

– Migrant and Seasonal Agricultural Worker Protection Act (MSPA)

– National Labor Relations Act (NLRA)

– Davis-Bacon Act (DBA)

– Service Contract Act

– Executive Order 11246

– Rehabilitation Act of 1973

– Vietnam Era Veterans’ Readjustment Assistance Acts

– Family and Medical Leave Act (FMLA)

– Title VII of the Civils Rights Act

– American Disabilities Act (ADA)

– Age Discrimination in Employment Act (ADEA)

– Executive Order 13658 of February 12, 2014

 

For more information about Fair Pay and Safe Workplaces, please see DOL News Release at: http://www.dol.gov/newsroom/releases/oasp/oasp20151046.

 

Thank you for choosing Paylocity as your Payroll Tax partner. Should you have any questions please contact your Paylocity Account Manager.

 

This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.