Administration Finalizing Regulations as End of Term Approaches

By Nancy Hammer Oct 7, 2016
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Last week, the Obama administration issued highly anticipated rules on two key HR issues: pay data reporting and paid sick leave for federal contractors.

Pay Data Reporting

The Equal Employment Opportunity Commission (EEOC) issued its new EEO-1 form, which has been redesigned to collect pay data. The new form requires that employers with 100 or more employees (both private and federal contractors) identify and report the number of employees who fall into each of 12 "pay bands" based on W-2 earnings within each of the 10 different EEO-1 categories.

The Administration's stated purpose in collecting this information was to root out unlawful pay discrimination under Title VII and to enforce the Equal Pay Act, which prohibits certain gender-based pay discrimination. The form was developed jointly with the Office of Federal Contract Compliance Programs (OFCCP) for purposes of enforcement by both agencies.

In written comments to both the EEOC and the Office of Management and Budget, as well as oral testimony before the Commission, SHRM supported efforts to root out instances of pay discrimination but pointed out that collecting pay data in the highly aggregated manner of the new form will not help identify unlawful pay discrimination. The deadline for the 2017 EEO-1 report is now March 31, 2018; the date was delayed in response to SHRM and other groups' comments highlighting employers' need to update their HR information systems and to align with the W-2 reporting cycle to minimize burden on employers.

Additional information on the form is available on the EEOC website.

Paid Sick Leave for Federal Contractors

On September 30, the Department of Labor (DOL) published a final rule implementing Executive Order 13706, Establishing Paid Sick Leave for Federal Contractors. According to the executive order and final rule, federal contractors and subcontractors are required to provide employees with up to seven days of paid sick leave per year. The rule not only governs the amount of leave that must be offered but also enumerates a broad number of authorized uses, requires employers to notify employees of leave balances and specifies how unused leave should roll over from year to year.

SHRM's comments included concerns about the rule's definition of "covered family member," which is more expansive than the definition in the Family and Medical Leave Act. SHRM's comments also urged the DOL to make sure that the rule, by mandating a certain number of paid sick leave days, does not require employers to unwind their paid-time-off (PTO) programs and once again bucket leave for specific purposes.

The final rule clarifies that employers can continue to offer PTO programs so long as they meet requirements of leave enumerated in the executive order. Importantly, however, the DOL clarified that if an employee exhausts all PTO leave for whatever reason the employee chooses, the employer is under no obligation to offer additional leave even if the employee requests leave for purposes enumerated in the executive order. The final rule unfortunately made no change to the vaguely worded and expansive definition of "covered family member," requiring that employees be allowed to take sick leave to care for individuals "whose close association with the employee is the equivalent of a family relationship" or "any other person related by blood."

Text of the final rule and additional information is available on the DOL's Wage & Hour Division website.

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