Employment Rights: New Pay Disclosure Rules for Federal Contractors, Minimum Wage Debate Top the Agenda

January 03, 2014

With aggressive new disability affirmative action rules for federal contractors in place, Office of Federal Contract Compliance Programs Director Patricia Shiu is ready to move on to "close that pay gap once and for all," starting with new pay disclosure requirements.  President Obama is also pressing gender pay issues as part of his overall income inequality theme, which will drive much of the employment rights agenda, with the minimum wage debate in Congress being the initial focal point.

OFCCP Pay Disclosure Rules  According to the Department of Labor’s recently published regulatory agenda, the OFCCP plans to publish a proposed rule for a new compensation data collection tool in January 2014, despite a 2012 National Academy of Sciences (NAS) report questioning the ability of federal agencies to handle employers' pay data in a secure manner.  The OFCCP proposal is expected to require federal contractors to provide annually to the agency the total W-2 compensation paid to men and women by race and ethnicity in each of the EEO-1 job categories and subcategories.  Such data is now only required to be provided to the agency as part of an OFCCP audit.  The NAS report recommended that the agency hold off on collecting such data until more safeguards are established.  OFCCP also intends to issue proposed revisions to its 30-year-old gender discrimination guidelines in May 2014.

New Labor Compliance Standards for Federal Contractors  With former Clinton advisor John Podesta joining President Obama’s staff, one of his priorities will likely be an executive order which would require greater scrutiny of federal contractors who violate health and safety, wage-hour and other labor laws.  In December, while serving as Chair of the Center for American Progress, Podesta endorsed a Senate HELP Committee staff report proposing "a clear process through which agencies can—in consultation with the Department of Labor—put in place additional requirements to ensure contractors comply with federal labor law in order to continue doing business with the government."  Podesta played a key role in the issuance of the so-called "blacklisting" rules at the end of the Clinton administration, which entailed debarment of companies with violations of labor laws.

Minimum Wage  In December, President Obama outlined his economic policies for the remainder of his term, setting the stage for an effort by Democrats to make income inequality a major campaign issue in 2014.  A key component is a minimum wage increase, with a Senate vote likely this year on the Fair Minimum Wage Act of 2013 (S. 460), which would increase the minimum wage to $10.10 over two years and index it to inflation.

Republicans Press For Comp/Flex Time  In opposing a minimum wage increase and the President's gender equity agenda, the centerpiece of congressional Republicans' alternative will continue to be amendments to the Fair Labor Standards Act to allow more workplace scheduling flexibility.  Under S. 1626, by Senate Republican Leader Mitch McConnell (R-KY), employers could offer comp time to employees for overtime while also agreeing to a "flexible credit-hour program" in which an employee could work additional hours beyond his or her typical schedule in order to accrue hours to be taken off at a later time.

Credit and Criminal Background Checks  In December, Sen. Elizabeth Warren (D-MA) introduced legislation (S. 1837) to prohibit employers from considering the credit history of job applicants.  The only exceptions would be for positions requiring a security clearance or where a credit check is required by law.  Thus, most employers would be prohibited from considering the credit histories of chief financial officers and others dealing with sensitive financial matters for the company.  Meanwhile, the Equal Employment Opportunity Commission will continue to seek to narrow the use of criminal background checks because of a disparate impact on minorities, though the agency has met resistance by the courts.

Leave and Reasonable Accommodation  With the recent reconfirmation of Commissioner Chai Feldblum, the Equal Employment Opportunity Commission may proceed with developing guidance or rules on the requirement to provide leave as a reasonable accommodation under the Americans with Disabilities Act.  The EEOC may also move forward on unemployment discrimination guidance should long-term unemployment remain high this year.

New Wage and Hour Chief   When the Senate returns next week, one of its early actions is likely to be confirmation of Boston University Professor David Weil as DOL Wage & Hour Administrator.  Professor Weil has been an outspoken critic of big business and what he calls the “fissured workplace,” described as large corporations “shed[ding] their role as direct employers of the people responsible for their products, in favor of outsourcing work to small companies that compete fiercely with one another.”  Weil may zero in on a proposal at a recent DOL conference to create a new class of "dependent contractors" in which FLSA minimum wage and overtime requirements would apply to independent contractor and supply chain relationships.

Employment Non-Discrimination Act  Despite a strong bipartisan vote of 64 to 32 in the Senate, the Employment Non-Discrimination Act (ENDA; S. 815) faces an uphill climb in the House.  The House bill (H.R. 1755) has 193 cosponsors, including five Republicans, but House Speaker John Boehner has announced his opposition to the bill with a statement saying it "will increase frivolous litigation and cost American jobs, especially small business jobs."  In the absence of House action, advocates will continue to press President Obama to issue an executive order banning sexual orientation discrimination by federal contractors.