Employment Regulation: Perez Jump Starts DOL's Aggressive Agenda with New Disability Affirmative Action Rules

August 27, 2013

After being delayed by election year politics and the controversy over DOL Secretary Thomas Perez's nomination, the Obama workplace regulatory agenda shifted into full gear this summer with the confirmation of Perez, whose first major act was to  promulgate a sea change in workplace disability policy and practice with new OFCCP disability affirmative action rules requiring federal contractors to ask all applicants and employees whether they have a disability.

Disability and Veterans Affirmative Action Rules.
  This week, OFCCP issued the final disability affirmative action rules.  Even though on his first day in office Secretary Perez promised to work with stakeholders in a "collaborative" manner, on his second day in office he sent the rules to the Office of Management and Budget (OMB) for approval, even though HR Policy and other business groups reiterated entreaties for collaboration.  The OMB quickly scheduled meetings with us and several other business groups the following week.  The clear impression was that the rules are on a fast track and the die is cast, though several of our members joined us for the meeting and made a very compelling case against the rules as proposed.  Our members were particularly critical of the so-called "self-identification" requirement obliging contractors to invade the privacy of all applicants and employees by inquiring about their disability status, regardless of the prohibition against doing so under the Americans with Disabilities Act.  HR Policy will now review the final rules with our Board of Directors to determine whether our only recourse is to try to stop them in federal court.  On the same day as the disability rules, OFCCP also issued final affirmative action rules for veterans, which contain many of the same administrative burdens as the disability rules.

Proposed OFCCP Compensation Data Rules.  Once the disability and veterans rules are in place, OFCCP's next major initiative will be to "close that pay gap once and for all," according to OFCCP Director Patricia Shiu.  To do this, the agency will propose rules later this fall establishing a new "compensation data collection tool," which is expected to require contractors to report total aggregate W-2 compensation for men and women by race and ethnicity in each of the ten EEO-1 job categories and subcategories.

Background Checks.  The Equal Employment Opportunity Commission's crackdown on employers' use of criminal and credit background checks is getting push-back from the states and the courts.  A federal court in Maryland recently ruled that the agency failed to show that an event planning company's use of such checks resulted in a disparate impact against black and male job applicants.  The court observed: "The story of the present action has been that of a theory in search of facts to support it," and called reports EEOC relied on in its case "flawed," "skewed," "rife with analytical errors," "laughable," and "an egregious example of scientific dishonesty."  The court further noted that the EEOC itself conducts criminal background investigations as a condition of employment for all employees and credit checks for roughly 90 percent of its workforce.  Earlier this summer, nine state attorneys general sent a letter to the EEOC objecting to its lawsuits and guidelines regarding background checks as "a quintessential example of gross federal overreach."

Employment Non-Discrimination Act.
  It is increasingly likely that the next major civil rights law will be a ban on employment discrimination based on sexual orientation and gender identity.  This summer, the Senate HELP Committee passed the Employment Non-Discrimination Act (S. 815), by a vote of 15 to 7, with Sen. Orrin Hatch (R-UT) joining two other Republicans in voting for the bill.  The bill is expected to be considered by the Senate this fall where enough additional Republican support seems likely to secure passage.  The bill will still face a high hurdle in the Republican House but sentiment is shifting in its favor there as well, with 178 cosponsors of the House companion bill (H.R. 1755), including three Republicans.  Meanwhile, a ban on employment discrimination may happen sooner for federal contractors, as President Obama continues to be pressed by civil rights groups to sign an executive order imposing such a requirement.