Federal Employment Law Update — May 2019

Federal Employment Law Update

EEO-1 and Pay Data

On May 3, 2019, the U.S. Equal Employment Opportunity Commission (EEOC) announced the collection of calendar year 2017 and 2018 pay data (EEO-1 Component 2) from EEO-1 filers by September 30, 2019.

The EEOC expects to begin collecting EEO-1 Component 2 data for calendar years 2017 and 2018 in mid-July 2019, and will notify filers of the precise date the survey will open as soon as it is available.

Read the announcement

HIPAA Penalties

On April 30, 2019, the U.S. Department of Health and Human Services issued a Notification of Enforcement Discretion Regarding HIPAA Civil Money Penalties (Document No. 2019-08530) in the Federal Register to inform the public that it will apply a different cumulative annual civil money penalties limit for each of the four penalty tiers in the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009. The HITECH Act established four categories for HIPAA violations:

  • No Knowledge (of a violation).
  • Reasonable Cause (was the reason for the violation and not willful neglect).
  • Willful Neglect — Corrected (willful neglect was the cause the violation and it was corrected within 30 days).
  • Willful Neglect — Not Corrected (willful neglect was the cause of the violation and it was not corrected within 30 days — not timely).

The amended penalties are as follows:

  • No Knowledge:
    • Minimum Penalty/Violation: $100
    • Maximum Penalty/Violation: $50,000
    • Annual Limit: $25,000
  • Reasonable Cause:
    • Minimum Penalty/Violation: $1,000
    • Maximum Penalty/Violation: $50,000
    • Annual Limit: $100,000
  • Willful Neglect — Corrected:
    • Minimum Penalty/Violation: $10,000
    • Maximum Penalty/Violation: $50,000
    • Annual Limit: $250,000
  • Willful Neglect — Not Corrected:
    • Minimum Penalty/Violation: $50,000
    • Maximum Penalty/Violation: $50,000
    • Annual Limit: $1,500,000

The penalties became effective April 30, 2019.

Read the Federal Register

DOL Opinion Letter: Service Providers and Independent Contractors Under the FLSA

On April 29, 2019, the U.S. Department of Labor (DOL) announced that it has issued a new opinion letter (FLSA2019-6) addressing compliance issues related to the Fair Labor Standards Act (FLSA). Specifically, the opinion letter addresses whether a service provider for a virtual marketplace company is an employee of the company or an independent contractor under the FLSA and responds to a request on behalf of a particular virtual marketplace company. It concludes that the workers who provide services to consumers through this specific company’s virtual platform are independent contractors, not employees of the company.

To make this determination, the DOL’s Wage and Hour Division (WHD) applied its six-factor balancing test, taking into account the following:

  1. The nature and degree of the potential employer’s control;
  2. The permanency of the worker’s relationship with the potential employer;
  3. The amount of the worker’s investment in facilities, equipment, or helpers;
  4. The amount of skill, initiative, judgment, or foresight required for the worker’s services;
  5. The worker’s opportunities for profit or loss; and
  6. The extent of integration of the worker’s services into the potential employer’s business.

An opinion letter is an official, written opinion by the WHD on how a particular law applies in specific circumstances presented by the individual person or entity that requested the letter.

Read opinion letter FLSA2019-6

Notice of Immediate Reinstatement of Revised EEO-1: Pay Data Collection

The U.S. Equal Employment Opportunity Commission (EEOC) updated it website to announce that EEO-1 filers should begin preparing to submit Component 2 data for calendar year 2018 by September 30, 2019, in light of the court’s recent decision in National Women’s Law Center, et al., v. Office of Management and Budget, et al., Civil Action No. 17-cv-2458 (D.D.C.). The EEOC expects to begin collecting EEO-1 Component 2 data for calendar year 2018 in mid-July 2019, and will notify filers of the precise date the survey will open as soon as it is available. Filers should continue to use the currently open EEO-1 portal to submit Component 1 data from 2018 by May 31, 2019.

As a result of the court vacating the Office of Management and Budget’s stay of Component 2, the EEOC will also collect Component 2 data for either calendar year 2017 or calendar year 2019, and will post an additional notice by May 3, 2019, announcing its decision.

See the website

Update on EEO-1 Pay Data Due by September 30

On April 25, 2019, Judge Tanya Chutkan issued an order in National Women’s Law Center, et al. v. Office of Management and Budget, et al., Civil Action No. 17-cv-2458 (TSC), ordering (in summary) all of the following:

  • The U.S. Equal Employment Opportunity Commission (EEOC) must collect EEO-1 Component 2 pay data from employers for calendar years 2017 and 2018.
  • In lieu of collection of Component 2 data for calendar year 2017, the EEOC may satisfy the two years of data requirement (2017 and 2018) by collecting EEO-1 Component 2 data for 2019 during the 2020 EEO-1 reporting period. If the EEOC decides to collect EEO-1 Component 2 data for 2019 instead of 2017, then it must provide notice of that decision by May 3, 2019.
  • The Office of Management and Budget’s (OMB) August 29, 2017 stay of its approval of the revised EEO-1 form tolled the three-year period of that approval for the duration of the stay, which lasted 553 days. Accordingly, the court declared that barring further interruptions of the approval or extensions, the revised EEO-1 form including Component 2 pay data will expire no later than April 5, 2021.
  • The EEOC must require collection of compensation data until April 5, 2021. The period for collection of compensation data was set to expire on September 30, 2019. However, the court ruled that, barring further interruptions of the approval or extensions, that period of collection was inapplicable while the Office of Management and Budget’s (OMB) stay was in place (The OMB’s August 29, 2017 stay of its approval of the revised EEO-1 form tolled the three-year period of that approval for the duration of the stay, which lasted 553 days.) As a result, the revised EEO-1 form including Component 2 pay data, and the collection thereof, will not expire until April 5, 2021.
  • The EEOC must immediately take all steps necessary to complete the EEO-1 Component 2 data collections for calendar years 2017 and 2018 by September 30, 2019 (the date by which employers must submit the information). If the EEOC exercises its option to collect EEO-1 Component 2 data for 2019, in lieu of 2017, then it must occur in the 2020 EEO-1 reporting period.
  • By April 29, 2019, the EEOC must issue a statement on its website and submit the same for publication in the Federal Register notifying EEO-1 filers that they should prepare to submit Component 2 data no later than September 30, 2019. The EEOC must alert filers if it has decided by April 29, 2019 whether to collect 2017 or 2019 data. If the EEOC has not decided by April 29, 2019 whether to collect 2017 or 2019 data, it must issue a statement of its decision on its website and submit the same for publication in the Federal Register by May 3, 2019. At minimum, on April 29, 2019, the EEOC must issue a statement on its website and submit the same for publication in the Federal Register notifying EEO-1 filers that they will be submitting 2018 Component 2 data collection for calendar year 2018 no later than September 30, 2019.
  • Beginning on May 3, 2019 and continuing every 21 days thereafter, the EEOC must provide the court and OMB with reports of all steps taken to implement the EEO-1 Component 2 data collections since the prior report, all steps to be taken during the ensuing three-week period, and indicating whether the EEOC is on track to complete the collection(s) by September 30, 2019. This May 3, 2019 report must include notice of all steps taken to implement the EEO-1 Component 2 data collections since March 4, 2019.
  • The EEO-1 Component 2 data collection(s) will not be complete until the percentage of EEO-1 reporters that have submitted their required EEO-1 Component 2 reports equals or exceeds the mean percentage of EEO-1 reporters that actually submitted EEO-1 reports in each of the past four reporting years.

The order took effect on April 25, 2019; however, the government may appeal the case.

Read the opinion

EEO-1 Pay Data Due by September 30

On April 25, 2019, Judge Tanya Chutkan allegedly issued a bench ruling in National Women’s Law Center, et al. v. Office of Management and Budget, et al., Civil Action No. 17-cv-2458 (TSC), ordering employers to submit Component 2 of the EEO-1 form (pay data) by September 30, 2019.

This opinion has not yet been made public and the decision is subject to the government’s right to appeal.

See the judge’s website and, Civil Action No. 17-cv-2458 (TSC), and District Court 2019 opinions webpage (where the opinion will be published).

SCOTUS, Federal Employment Discrimination Law, and LGBT Employees

On April 22, 2019, the Supreme Court of the United States (SCOTUS) granted certiorari in the following cases asking whether federal employment discrimination laws apply to LGBT employees:

  • In Bostock v. Clayton County, Georgia, consolidated with Altitude Express Inc. v. Zarda, SCOTUS will decide whether discrimination “because of . . . sex” within the meaning of Title VII of the Civil Rights Act of 1964 includes discrimination based on sexual orientation.
  • In G. & G.R. Harris Funeral Homes v. EEOC, SCOTUS will decide whether Title VII bars discrimination against transgender people based on status as transgender people or sex stereotyping under Price Waterhouse v. Hopkins.

Read Bostock and R.G. & G.R Harris Funeral Homes