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  • Kasper & Frank LLP

Workplace Alert: New Federal Agency Actions Impact Employers

Happy New Year! 2016 is off to a busy start, and there are already several notable developments of which employers should be aware. Following is a brief summary of select developments. If you have any questions, please do not hesitate to contact us. Brenda Kasper can be reached at (760) 676-9452 or, and Lisa Frank can be reached at (760) 676-9451 or New Pay Transparency Rule for Federal Contractors Now Effective and Requires Immediate Action In April 2014, President Obama issued Executive Order 13665 to promote pay transparency and encourage employees and applicants to share compensation information without fear of discrimination or retaliation. The Executive Order is premised on the belief that sharing compensation data will expose otherwise hidden pay inequity, which will “level the playing field” for women and other protected groups. The Office of Federal Contract Compliance Programs issued its final rule implementing the Executive Order on September 11, 2015, which took effect on January 11, 2016. The final rule reaffirms employees’ broad rights to discuss compensation information. Notably, federal contractors are now prohibited from discriminating or retaliating against employees or applicants who (i) share their own compensation information, (ii) share their co-workers’ compensation information, or (iii) inquire about co-worker pay. The final rule, however, does not require federal contractors to disclose compensation information. Additionally, absent limited exceptions, employees who have access to compensation information as part of carrying out their essential job functions, such as human resources professionals, will not be protected by this final rule. Federal contractors must also include new non-discrimination statements in their employee handbooks or manuals, disseminate them to applicants and employees, and include them in covered federal contracts and subcontracts. The new non-discrimination language is provided below: PAY TRANSPARENCY NONDISCRIMINATION PROVISION The contractor will not discharge or in any other manner discriminate against employees or applicants because they have inquired about, discussed, or disclosed their own pay or the pay of another employee or applicant. However, employees who have access to the compensation information of other employees or applicants as a part of their essential job functions cannot disclose the pay of other employees or applicants to individuals who do not otherwise have access to compensation information, unless the disclosure is (a) in response to a formal complaint or charge, (b) in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or (c) consistent with the contractor’s legal duty to furnish information. DOL Issues Joint Employer Guidance On January 20, 2016, the Wage and Hour Division of the U.S. Department of Labor (“DOL”) released guidance for when separate organizations are considered joint employers under the Fair Labor Standards Act (“FLSA”). This guidance is important because joint employers share liability for FLSA overtime pay, among other wage and hour obligations. The guidance identifies two types of employment relationships that give rise to joint employer status. The first is “vertical joint employment,” where an employee has an employment relationship with one employer, typically a staffing agency, but the worker is assigned to another employer. According to the DOL, the worker is economically dependent on and “essentially employed by” the second employer to which the employee is assigned. The second is “horizontal joint employment,” where an employee has employment relationships with two or more employers that are only technically separate, such as affiliates. In this case, the degree of association between two organizations (such as common owners, common control over operations and shared employees) determine whether joint employer status exists. Based on this guidance and recent National Labor Relations Board rulings, organizations need to be careful in the selection of and ongoing relationships with entities who may be joint employers. Careful prescreening of employment practices and the compliance history of potential joint employers, along with carefully drafted services agreements are essential. EEOC Announces Proposed Addition of Pay Data to Annual EEO-1 Reports On January 29, 2016, the U.S. Equal Employment Opportunity Commission (“EEOC”) announced a proposed revision to the Employer Information Report (“EEO-1”) to include collecting pay data from federal contractors and employers with more than 100 employees. According to the EEOC, the proposal is designed to assist the agency in identifying possible pay discrimination and assist employers in promoting equal pay in their workplaces. If finalized, the EEO-1 will add data on pay ranges and hours worked, beginning with the September 2017 report. The EEOC’s proposed changes will be published in the Federal Register on February 1, 2016, and the public comment period will run until April 1, 2016. EEOC Announces Proposed Changes to Its Guidance on Workplace Retaliation On January 21, 2016, the EEOC issued a 76-page proposal to update its workplace retaliation guidance. This is the EEOC’s first retaliation-related guidance in nearly 20 years. The lengthy document contains 30 hypothetical retaliation scenarios. If finalized, the guidance potentially expands the concepts of causation and adverse action. Although EEOC enforcement guidance does not carry the weight of a rule or administrative decision, it is often referenced by the EEOC during its investigations and by employees to establish legal violations. The proposed guidance is open for public input through February 24, 2016. H-1B Visa Filing Window Opening Soon For companies hiring foreign national employees, now is the time to start preparing H-1B petitions. We expect that the H-1B quota will once again be surpassed on the first day that H-1B petitions are accepted on April 1, 2016, so it is crucial that anyone planning to hire foreign professional workers this year or hoping to change the status of foreign workers employed under another visa should get ready now. Please contact us if you have any questions regarding hiring foreign national employees or would like to discuss how Kasper & Frank can assist you with H-1B or other types of work visas.

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