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New Rules Prohibit Discrimination On The Basis of Sexual Orientation and Gender Identity

The Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) published a Final Rule on December 9, 2014, implementing Executive Order 13672, which prohibits federal contractors and subcontractors from discriminating against individuals on the basis of sexual orientation and gender identity. In accordance with the treatment of depository institutions under Executive Order 11246, the mere existence of federal deposit insurance is sufficient for a bank to be deemed a federal contractor under Executive Order 13672, without regard to the number of employees or other contractual relationships with the federal government. The new rule will take effect April 8, 2015.

Although the new rule does NOT include new reporting and information gathering mandates or require contractors to set hiring goals, it does require federal contractors and subcontractors (and thus all insured banks) to:

  • Update Contracts.  Contractors must update the equal opportunity clause in new or modified subcontracts and purchase orders to include sexual orientation and gender identity as protected characteristics.
  • Update Job Solicitations.  Contractors must update the equal opportunity language included in all job solicitations to notify applicants that they will not be discriminated against on the basis of their sexual orientation or gender identity.
  • Ensure No Discrimination. Contractors must take steps to ensure that job applicants and employees are not discriminated against because of their sexual orientation or gender identity.
  • Post Updated Notices.  Contractors must post the new supplement to the EEO is the Law poster as soon as it is available on the OFCCP’s website.
  • Ensure No Segregation.  Contractors must ensure that facilities provided for use by their employees are not segregated on the basis of sexual orientation or gender identity.
  • Notify OFCCP/State Department.  Contractors must immediately notify the OFCCP and the State Department if they believe they cannot obtain a visa for an employee to a country in which, or with which, they do business because of the employee’s sexual orientation or gender identity.
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Legal Risks Associated with Mortgage Loan Officer Compensation

How a bank compensates mortgage loan officers can present legal risk for the bank.  Banks need to make sure their compensation practices comply with the federal Fair Labor Standards Act and related state laws, as well as Regulation Z.

Threshold Question: Are Loan Officers Exempt or Non-Exempt?

The exempt / non-exempt status of mortgage loan officers has been heavily-litigated in recent years and has been the subject of several Department of Labor opinion letters.  The inquiry remains very fact-specific and depends on what the loan officers actually do not just on their job descriptions. Relevant questions include:

  • How the mortgage loan officers are compensated (salary basis, hourly basis, commissions, etc.)
  • How much time (hours/week) the loan officers spend in the office (including a home office)
  • What the loan officers do while in the office.
  • What they do while working outside of the office.
  • How involved the loan officers are in generating sales. (e.g., meeting with prospective borrowers at their homes or other locations, meeting with referral sources such as real estate agents, developers, etc.)
  • How much time (hours/week) the loan officers spend generating sales.
  • Others duties and responsibilities of the loan officers.
  • How much time (hours/week) loan officers spend on those other duties and responsibilities (e.g., completing loan applications, gathering credit information and other documentation for the loan application process, etc.)
  • How much judgment and discretion the mortgage loan officers exercise.
  • How much flexibility the mortgage loan officers have in setting work hours and schedules.
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Regulators Propose Statement on Diversity Policies

Throughout 2012 a series of roundtable discussions were held in order to assess the current diversity programs and polices in place within the financial industry. As a result of these talks, six financial agencies: the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Consumer Financial Protection Bureau, and the Securities and Exchange Commission (the “Agencies”), proposed a set of diversity and inclusion standards. These standards, titled the “Proposed Interagency Policy Statement Establishing Joint Standards for Assessing the Diversity Policies and Practices of Entities Regulated by the Agencies and Request for Comment” (the “Policy Statement”), were published on October 25, 2013, with the 60-day comment period to end on December 24, 2013.  This Policy Statement helps to implement a part of the Dodd-Frank Act, which requires each financial agency to establish an Office of Minority and Women Inclusion, and assign a director who is responsible for all agency matters relating to diversity in management, employment, and business activities.

What the Proposed Standards Will Do

The proposed Policy Statement sets out uniform standards for regulated entities in four key areas: (1) organizational commitment to diversity and inclusion; (2) workforce profile and employment practices; (3) procurement and business practices and supplier diversity; and (4) practices to promote transparency of organizational diversity and inclusion.  The Agencies advise that each standard will be tailored to the regulated entity’s size and other relevant characteristics such as total assets, number of employees, geographic location, and community characteristics. Entities that are affected by the Policy Statement include financial institutions, investment banking firms, mortgage banking firms, asset management firms, brokers, dealers, financial services entities, underwriters, accountants, investment consultants, and providers of legal services.

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April 2011 Client Alerts

W-2 Reporting of Employer-Provided Health Care Costs

The 2010 health care reform legislation included an obligation for employers to inform employees of the cost of their health coverage.   The IRS has now issued Notice 2011-28, which provides interim guidance for employers on W-2 reporting  of the cost of coverage.  For more information, please click here to read the Alert regarding the Notice published by the Employee Benefits & Executive Compensation Client Service Group on April 5, 2011.

Form I-9:  Changes to Accepted Documentation

As of May 16, 2011, the documents employees present to employers for I-9 verification are subject to new regulations.  The U.S. Citizenship and Immigration Services of the Department of Homeland Security has issued a final rule concerning the list of acceptable documentation.  To learn more about the changes in acceptable documentation, please click here to read the Alert published by the Labor & Employment Client Service Group on April 27, 2011. 

Reminder for Plan Administrators to Review Confidentiality Procedures for Qualified Retirement Plans 

Plan administrators of plans that offer employer stock as an investment alternative should review the disclosures provided to plan participants.  Investment in employer stock represents a significant litigation threat for plan fiduciaries.  However, the plan fiduciary may be relieved of liability for participant losses resulting from the decision to invest in employer stock if certain disclosures are provided under ERISA Section 404(c).  To learn more, please click here to read the Alert published by the Employee Benefits & Executive Compensation Client Service Group on April 12, 2011.

Pension Plan Reporting of Foreign Bank and Financial Accounts

Representatives of pension plans with interests in foreign financial accounts may be required to report those accounts to the Internal Revenue Service.  On February 24, 2011 the Treasury Department issued final regulations greatly expanding the reporting requirements for individuals and entities that hold interests in foreign accounts.   To learn more about the regulations, please click here to read the Alert published April 12, 2011 by the Employee Benefits & Executive Compensation Client Service Group.

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