2016 Year to Date Review

2016 has been inundated with numerous regulatory changes and repeated press releases of OFCCP’s increased enforcement activity. Which will most likely make 2016 a record-setting year for financial settlements levied against federal contractors.

To help our clients and readers grasp the volumes of new burdensome regulations and their impact on the federal contractor community, we have summarized and organized the events by month.


Executive Order 13658 – Increase of Minimum Wage to $10.15 Effective as of January 1, 2016, federal contractors and subcontractors’ minimum wage has increased by $.05 per hour. The minimum wage increased from $10.10 in 2015 to $10.15 in 2016. The minimum wage for tipped employees working under federal contracts has increased by $.95 per hour, from $4.90 in 2015 to $5.85 in 2016. Executive Order 13665 – Pay Transparency went into effect on January 11, 2016Executive Order 13665 prohibits federal contractors and subcontractors from discriminating against or terminating employees to discuss their pay or the pay of their coworkers also prohibits discriminating against applicants for discussing pay. Contractors are required to post “EEO is the Law” Poster Supplement and the OFCCP’s Pay Transparency Policy Statement.

Proposed Equal Pay Report (EPR) –Revised EEO-1 Report

January 29, 2016, the Equal Employment Opportunity Commission (EEOC) made an announcement proposing a revision to the EEO-1 Report that would require employers to report to the federal government the number of hours worked and summary pay (grouped in pay bands) broken down by gender, ethnicity, and race.

The EEOC intends to address pay discrimination and pay gap issues. Still, immediately serious concerns have were raised that needed to be addressed, including security concerns and the hours of the burden on employers. (Click to read more)


California DFEH Issues Employer Guidelines for Transgender Employees *a must-read for all states, not just CaliforniaThe topic of transgender rights in the workplace has long been at the forefront of the employment community. Again, the topic gained interest on February 17, 2016, when the California Department of Fair Employment and Housing (DFEH) issued guidelines for transgender employees’ employers on complying with the Fair Employment and Housing Act (FEHA). (Click to read more and download guidelines) 

Executive Order 13706 – DOL Publishes Proposed Rule Establishing Paid Sick Leave for Federal Contractors

Thursday, February 25, 2016, the U.S. Department of Labor (DOL) published a Notice of Proposed Rulemaking (NPRM) in the Federal Register, proposing procedures and standards for enforcing and implementing Executive Order (E.O.) 13706. The E.O. would be an amendment to Title 29 of the Code of Federal Regulations (CFR), adding part 13, establishing paid sick leave for federal contractors. The comment period was open from February 25, 2016, to March 28, 2016. (Click to read more)

B&H Foto gets sued by the OFCCP & Stands to lose $46 million in Contracts

B&H Foto & Electronics Corporation is being sued by the Office of Federal Contract Compliance Programs (OFCCP) for allegations of systemic hiring discrimination towards Asian job seekers, black, female, and Hispanic employees.

If B&H fails to comply, the OFCCP will request the company be debarred from future federal contracts, and all current government contracts are canceled, a result that could lead to a loss of over $46 million. (Click to read more)


EEO-1 Report- Public hearing March 16, 2016, the U.S. Equal Employment Opportunity Commission (EEOC) held a public hearing regarding the revised EEO-1 Report. The hearing comprises 15 witnesses representing the broad range of stakeholders who will be impacted, offering employees, employers, and academics perspective. The common theme among the speakers presenting was the need to understand better the burden the new Report will pose on employers.

Update on Proposed Overtime Rule ChangesThe Department of Labor’s (DOL) controversial proposed rule to significantly increase the number of employees who qualify for overtime pay has been submitted for review to the Office of Management and Budget (OMB).

The last step can take between 30-60 days. In response to the DOL fast-tracking of the final rule, the House and Senate Republicans, having severe concerns regarding the overtime pay rule’s unintended repercussions, have stepped in and introduced legislation to stop it. (Click to read more)


New Development Regarding the 2016 Filing of VETS 4212 Reports

Per the Federal Acquisition Regulation (FAR), the threshold for the VEVRAA filing has increased from $100,000 to $150,000 and will go into effect beginning August 1, 2016.

Administrative Review Board Reverses Discrimination Charges Sought by OFCCP Against Bank of America. 

The ongoing case against Bank of America has lasted nearly 20 years. Two time periods have been the case’s focus, with the first being 1993 and the second from 2002 to 2005, where the OFCCP has claimed to uncover discrimination towards African American applicants. Over the years, the case had taken several turns and presumed resolved when BOA was forced to pay over $2 million to affected class members. That is until the case reached the Administrative Review Board, where part of that decision was reversed. (Click to read more)


Gordon Food Service will pay $1.85 Million to Settle Charges of Gender Discrimination

Gordon Food Service, Inc., for the second time, will settle discrimination charges with the OFCCP. However, this time around, the federal contractor faces a much steeper settlement at $1.85 million. (Click to read more)

President Obama Announces the Publication of Revised Overtime Regulations

President Barack Obama and Secretary Thomas Perez announced today, May 18, 2016, the Department of Labor’s (DOL) final rule on overtime regulations. The much-anticipated revision is set to go into effect December 1, 2016, and the new salary threshold for overtime pay will be $913 per week and $47,476 annually. (Click to read more)


Aqualon Company, to Pay 660 African-American Applicants

During an OFCCP audit of the company’s Richmond facility, the agency found the company discriminated against African American applicants from October 1, 2011, through September 30, 2012. To resolve these allegations, Aqualon will pay $175,000 to 660 affected class members. (Click to read more)

Enterprise Rent-A-Car Sued by OFCCP for Racial Discrimination

The OFCCP has filed a lawsuit against Enterprise Rent-A-Car Company of Baltimore, LLC, for race-based hiring discrimination. The OFCCP seeks to order Enterprise Rent-A-Car of Baltimore to comply with Executive Order 11246 and relief for the affected African American applicants. (Click to read more)

OFCCP Updated Old-school Sex Discrimination guidelines on

June 14, 2016, the OFCCP officially announced a Final Rule updating Sex Discrimination Guidelines. The Sex Discrimination Guidelines address sexual harassment, workplace accommodations for pregnant employees, compensation discrimination, protections for transgender workers, and more. The most crucial thing for contractors to remember is that the Final Rule will affect August 15, 2016. (Click to read more)

VEVRAA Annual Hiring Benchmark has been lowered to 6.9%OFCCP announced the annual Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) benchmark for hiring protected veterans reduced to 6.9%. The decreased benchmark is down just slightly from the prior year’s benchmark of 7%. It also clarified that “Contractors who implemented the previous year’s national benchmark of 7 percent after March 4, 2016, but before this announcement may keep their benchmark at 7 percent.” (Click to read more)

Jennie-O Turkey Will Pay $492K to Settle Allegations of Hiring Discrimination Towards Women

Jennie-O Turkey Store, Inc., a subsidiary of Hormel Foods Corporation, will pay nearly $492K and extend 53 employment offers to resolve hiring discrimination allegations. An audit at the company’s Willmar, Minnesota facility by the OFCCP found that Jennie-O Turkey had used discriminatory hiring practices that adversely impacted 339 female applicants applying for laborer positions. The company has denied the allegations but has agreed to the terms set in a consent decree. (Click to read more)

“Discrimination can be prevented when employers have non-discriminatory selection procedures in place and make certain that they are followed,” said OFCCP Director Patricia A. Shiu.


Norfolk Southern will pay Nearly $500K for Race-based Hiring Discrimination

Maintenance of Way #34, a business unit in the engineering department of Norfolk Southern Corporation, which has entered into a conciliation agreement with the OFCCP for alleged racial hiring discrimination. In an investigation conducted by OFCCP, the resulting evidence found the company had discriminated against 2,086 African-American job applicants. To resolve discrimination allegations, the company agreed to pay $492,000 to the affected class members in addition to making seven employment offers to qualified, non-selected African-American applicants. (Click to read more)

OMB Renews OFCCP’s Scheduling Letter for Three Years

The Office of Management and Budget (OMB) renewed the OFCCP’s Scheduling Letter for three years. On July 1, OFCCP will commence using the renewed Scheduling Letter to inform non-construction supply and service government contractors of upcoming compliance evaluations.

What’s Coming?

Executive Order 13706– Paid Sick Leave for Federal Contractors Comment

The Executive Order directs the Secretary of Labor to issue regulations by September 30, 2016, to implement its requirements.

Prepare for Proposed Overtime Rule to go into Effect

If legislation to stop the overtime rule does not pass once the Office of Management and Budget has approved it. The law will go into effect on December 1, 2016.

Expect the Revised EEO-1 Report to be submitted to the Office of Management and Budget.

The Revised EEO-1 Report’s comment period has now closed, and the EEOC must review all comments and address concerns raised in comments submitted. The EEOC will then do one of the following 1. Continue moving forward with the proposal without making any changes, 2. Make substantial modifications to the request based on comments received, or 3. Drop the proposed rule altogether. The next step would then be for the EEOC to submit the rule for approval from the Office of Management and Budget (OMB) before being released for implementation.

The threshold for the VEVRAA Filing has Increased

Federal Acquisition Regulation (FAR) the threshold for the VEVRAA filing has increased from $100,000 to $150,000 and will go into effect beginning August 1, 2016.

Sex Discrimination Guidelines the Final Rule will go into effect on August 15, 2016.

Training and Best Practices

Here are a few resources to assist you in achieving and maintaining compliance:


Infographics and White Papers

Posters, Policy Statements & Guidelines


Companies of all sizes struggle to remain compliant with increasingly complex affirmative action regulations. Federal contractors need to stay informed and seek advice from an affirmative action expert to ensure their companies and plans comply with E.O. 11246.

Career Resources, Inc. will continue to bring you the latest affirmative action news.

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