HR Tip: Significant decisions for federal contractors and subcontractors

Federal contractors may be celebrating the recent ruling by a federal court blocking the blacklisting rule, but lamenting the Equal Employment Opportunity Commission's (EEOC) announcement that starting March 2018, it will collect summary employee pay data from private employers including federal contractors and subcontractors with 100 or more employees.

Blacklisting rule blocked

A day before the Fair Pay and Safe Workplaces rule - the "blacklisting rule" - was to take effect, a federal court blocked most of the rule on Oct. 24, determining that the regulation likely violated a host of federal labor laws as well as the First Amendment and due process rights. However, the court left in place the rule's pay transparency provisions.

The injunction means employers may enter into federal contracts, even over $50 million, without having to report all violations of 14 different labor laws, plus similar state laws, to the federal government, including violations that have not been fully litigated in court. But employers still must comply with the pay transparency provisions.

It is important to note that this is a preliminary injunction and can change so contractors should hold onto the data they've collected and wait until there is a decision on the permanent injunction before celebrating.

EEOC will collect summary pay data

Starting March 2018, the EEOC will collect summary employee pay data from private employers including federal contractors and subcontractors with 100 or more employees, which it will use to improve investigations of possible pay discrimination. The summary pay data will be added to the annual Employer Information Report or EEO-1 report that is coordinated by the EEOC and the Department of Labor's Office of Federal Contract Compliance Programs (OFCCP).

Specialist in workplace law, Jackson Lewis, notes, "Armed with the data, and intent upon identifying pay disparities causing the "wage gap" for women and minorities, the EEOC and the Office of Federal Contract Compliance Programs will monitor and test employer data and investigate in detail the pay practices of those employers whose data suggests indefensible pay disparities allowing the agencies to effectively target employers for systemic pay discrimination investigations." The firm encourages affected employers to conduct proactive EEO pay analyses to assess risk, but cautions to protect analyses under the attorney-client privilege.