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NewsBrief – February 2025

In This Issue:

Compliance Corner: Investigations Guide for HR Professionals

Each month, we highlight one of the many resources exclusively available to you as a member of Cascade.

This month, we're featuring our Investigations Guide for HR Professionals. This guide provides step-by-step support for conducting compliant workplace investigations, from initial complaint to conclusion. Designed for HR staff of all experience levels, it covers basic principles, interviewing techniques, sample notification language and more!

Significant Changes to Federal Contracting and Potential Scrutiny of Private Sector DEI Programs

Cascade Compliance Team
compliance@cascadeemployers.com

Late on January 21, 2025, President Trump signed an Executive Order “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” This Order is focused on eliminating "discriminatory" DEI programs, targeting both federal contractors and private sector entities.

Impact on Federal Contractors:

This Executive Order revokes Executive Order 11246 (EO 11246) which was originally signed in 1965 and established various Affirmative Action requirements for federal contractors and subcontractors, including written plans and reporting requirements. In revoking EO 11246, Section 3 of Trump’s new Executive Order states:

The Office of Federal Contract Compliance Programs within the Department of Labor shall immediately cease:

  1. Promoting “diversity”;
  2. Holding Federal contractors and subcontractors responsible for taking “affirmative action”; and
  3. Allowing or encouraging Federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.

It also states that covered contractors may choose to continue complying with the requirements of EO 11246 for up to 90 days from January 20, 2025. Finally, the EO requires that all federal contracts and grants include a term requiring parties to agree that “its compliance in all respects with all applicable Federal anti-discrimination laws is material to the government’s payment decisions” and a term requiring parties “to certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.”

It is worth nothing that this Executive Order does not change a covered contractor’s tracking and reporting obligations under Section 503 of the Rehabilitation Act of 1973 (protecting the disabled) and the Vietnam Era Veterans’ Readjustment Act of 1974 (VEVRAA) (protecting certain veterans).  These are protected by statute.

Impact on Private Sector DEI Programs:

Section 4 of the Executive Order requires federal agency heads along with the Attorney General to submit a report within 120 days that contains “recommendations for enforcing Federal civil-rights laws and taking other appropriate measures to encourage the private sector to end illegal discrimination and preferences, including DEI.”

“The report shall contain a proposed strategic enforcement plan identifying:

  1. Key sectors of concern within each agency’s jurisdiction;
  2. The most egregious and discriminatory DEI practitioners in each sector of concern;
  3. A plan of specific steps or measures to deter DEI programs or principles (whether specifically denominated “DEI” or otherwise) that constitute illegal discrimination or preferences. As a part of this plan, each agency shall identify up to nine potential civil compliance investigations of publicly traded corporations, large non-profit corporations or associations, foundations with assets of 500 million dollars or more, State and local bar and medical associations, and institutions of higher education with endowments over 1 billion dollars;
  4. Other strategies to encourage the private sector to end illegal DEI discrimination and preferences and comply with all Federal civil-rights laws;
  5. Litigation that would be potentially appropriate for Federal lawsuits, intervention, or statements of interest; and
  6. Potential regulatory action and sub-regulatory guidance.”

It is worth noting that the Order does not prohibit all DEI efforts, but only those that could violate federal anti-discrimination laws. In reality, most DEI efforts do not violate civil rights laws. All employers must still comply with applicable state and local anti-discrimination laws such as Title VII of the Civil Rights Act and how these laws have been applied in the court system. For example, this does not change an employer’s obligation to provide a workplace free of discrimination and harassment under Title VII and applicable state and local laws.

Interestingly, the Executive Order does not define many of the terms it uses such as “illegal discrimination.”  For example, Affirmative Action requirements prohibit the use of quotas or preferences as THAT would be and is illegal. These regulations, in fact, do not permit employers to make employment decisions based on protected classes such as race and gender. This also, has not changed.

There is still much that is unknown about how this Executive Order will be implemented and its impact on employers. Cascade will continue to monitor this issue and provide updates as we learn more about how to navigate this emerging issue.  If Cascade completes your Affirmative Action Plan, we will be reaching out to discuss the next steps.

To better understand these changes and what it means to your workplace, please register for our special session on these topics on February 13th.

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Enforcement of Executive Order 11246 to Cease

Cascade Compliance Team
compliance@cascadeemployers.com

On January 24, the Acting U.S. Department of Labor (DOL) Secretary, Vincent Micone, issued an Order to all DOL employees, including the employees of the Office of Federal Contract Compliance Programs (OFCCP), to cease all investigative and enforcement activity under the rescinded Executive Order 11246. This activity includes all pending cases, conciliation agreements, investigations, and complaints.

By January 31, Federal contractors with open audits or investigations should be notified that the EO 11246 portion of the audit or investigation is closed. Additionally, Section 503 and VEVRAA components of the audit or investigation, which cover individuals with disabilities and veterans, will be on hold until further guidance is given.

Although this order impacts OFCCP audits, it does not affect the requirements for federal contractors to prepare Section 503 and VEVRAA Affirmative Action plans. Federal contractors should continue to develop the sections of their plans that address individuals with disabilities and veterans.

Cascade will continue to monitor this issue and provide updates as the situation develops.

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DOL Clarifies Use of Employer-Provided Paid Time Off when FMLA and State PFML Programs Run Concurrently

Cascade Compliance Team
compliance@cascadeemployers.com

On January 14, 2025, the U.S. Department of Labor (DOL) issued an Opinion Letter providing guidance regarding the use of employer-provided paid time off when the Family and Medical Leave Act (FMLA) runs concurrently with state or local paid family and medical leave (PFML) programs.

Leave Laws

As a reminder, employers with 50 or more employees are subject to FMLA, which provides eligible employees with up to 12 weeks of protected, unpaid leave for qualifying family and medical reasons. Additionally, numerous states have implemented paid family and medical leave (PFML) programs, such as Paid Leave Oregon (PLO) and Washington's Paid Family Medical Leave (WA PFML).

While state PFML programs typically offer broader coverage for employees and their family members, there are instances where FMLA and PFML overlap. For example, in Oregon, an employee’s own serious health condition such as a pregnancy-related disability, is a qualifying reason under both FMLA and PLO, assuming initial employer and employee eligibility criteria is met.

The FMLA Substitution Rule

Although FMLA leave is typically unpaid, eligible employees may choose, or employers may require the use of any accrued sick leave, vacation, or other employer-provided paid time off to substitute for unpaid FMLA leave. This is known as FMLA’s Substitution Rule. The FMLA regulations explain that when an employee is taking FMLA leave and receiving short-term disability payments or workers’ compensation, FMLA’s Substitution Rule does not apply because the leave is no longer unpaid. However, the FMLA regulations do not address PFML programs.

No Substitution During Concurrent FMLA/PFML Leave

The Opinion Letter clarifies that when FMLA and PFML run concurrently, employers cannot require employees to use their accrued employer-provided paid time off. An employer and employee may agree, when permitted under state law, to use the employee’s employer-provided accrued paid time off to supplement the employee’s payments.

Required FMLA Designation During Concurrent PFML Leave

Additionally, the Opinion Letter states that if an employee takes PFML that is also covered by FMLA, the employer must designate the leave as FMLA leave and the employee must be given the designation notice.

The Opinion Letter further clarifies that if an employee’s PFML ends before their full FMLA leave entitlement is exhausted, the employee is still entitled to take the remainder of their FMLA leave.

Next Steps

Employers in states with PFML laws should review their leave policies to make sure the following is explicit:

  • When an employee’s leave is covered under PFML and FMLA, an employer cannot force an employee to take employer-provided paid time off, nor can the employee demand to use the time; mutual agreement is required.
  • Employers can allow the employee to supplement their PFML payments up to 100 percent of their wages ONLY if allowable under the specific state paid leave program.
  • When PFML leave is covered by FMLA, employers must designate the time as FMLA leave and notify the employee accordingly.

For Oregon employers:

Paid Leave Oregon (PLO) offers greater flexibility than FMLA regarding the use of employer-provided paid time off. PLO allows employees the option to supplement benefits up to 100% of their weekly wages, even without employer agreement.

For Washington employers:

Washington Paid Family and Medical Leave (WA PFML) allows employers to provide extra pay on top of WA PFML payments, known as "supplement benefits." To avoid reducing an employee's WA PFML benefits, this additional pay must be designated by the employer as "supplemental benefits." If made available, an employee may choose, but an employer cannot require, the use of such benefits. With that, employers should already have leave policies that comply with DOL’s Opinion Letter.

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Access Free Compensation Report by Participating in Payscale Peer

McKenna Arnold, Survey and Research Manager
surveys@cascadeemployers.com

Cascade is excited to announce a new resource for members: a free compensation report featuring data on the top 50 most frequently reported jobs, coming this May. This report will provide valuable insights into key compensation metrics, including median salaries and bonuses, across a wide range of roles.

By participating through Payscale Peer in our Spring survey, you'll receive a report of valuable data, empowering you to:

  • Benchmark your compensation strategies against industry standards.
  • Identify potential compensation gaps within your organization.
  • Make informed decisions about salary adjustments, bonuses, and other compensation programs.

For organizations seeking even deeper insights, we encourage you to explore full access to Payscale Peer, our online compensation platform. Payscale Peer access provides comprehensive salary data on over 5,000 job titles, enabling you to:

  • Conduct in-depth analysis of compensation trends.
  • Generate customized reports tailored to your specific needs.
  • Gain a competitive edge in attracting and retaining top talent.

The new report and full access to Payscale Peer are included at no additional cost for Small, Premium, and Pro members. All you have to do is participate and you’ll gain access.  Easy!

Essential members that participate will receive the free compensation report only.  To access the Payscale Peer platform, Essential members can either purchase access or upgrade membership to our Pro, Premium or Small package.

Non-member participants can purchase the report at a reduced fee and/or purchase access to Payscale Peer.

Ready to participate?

  • New Participants: Click here to register.
  • Returning Participants: Please send an email to surveys@cascadeemployers.com to confirm your intent to participate.

We will provide you with all the necessary participation materials on the launch date of Monday, February 10th.

Want to learn more? Visit our website for detailed information about Payscale Peer. You can also attend our free webinar on February 12th for an overview of the participation process and a demonstration of the Payscale Peer platform.

Don't miss this opportunity to enhance your compensation data strategy!

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2025 Salary Increase Predictions

Cascade Compensation Team
compensation@cascadeemployers.com

As we start 2025, employers are keeping a close eye on salary trends to determine what this year might bring in terms of pay increases. With high increases over the last few years, will this year remain elevated? Early predictions suggest that overall salary increase budgets will remain relatively flat compared to 2024, hovering around 3.7%.

Several factors are influencing these projections, and the landscape may continue to evolve throughout the year:

  • A Steady Rise in Salaries: Employers are still grappling with heightened competition for certain roles, which has driven up salary benchmarks in some areas. Retaining top talent necessitates maintaining competitive compensation.
  • High Inflation and Cost of Living Considerations: Inflation has moderated in some regions, but the cost of living continues to weigh heavily on workers and their families. Many organizations are tailoring their compensation strategies to address these challenges, particularly in high-cost areas.
  • The Impact of Remote Work Trends: Remote work continues to influence salary trends. Employers are increasingly evaluating compensation based on geographical location, often offering adjusted salaries for remote workers in lower-cost regions. This trend has also allowed organizations to tap into a broader talent pool, balancing cost savings with access to skilled professionals.
  • Government Regulations and Policies: Changes in labor laws and government policies, such as minimum wage increases, are shaping compensation strategies. Employers need to stay compliant while navigating the financial impact of these regulations on their payroll budgets.
  • Labor Union Negotiations: In industries with strong union presence, collective bargaining agreements play a significant role in determining salary increases. These negotiations often set the tone for wage trends within their respective sectors.

For employers, understanding market trends and being proactive will remain crucial. While there are predictions for 2025 salary increases, much will depend on broader economic conditions and individual organization performance. Staying ahead of these trends will be key to navigating the year ahead.  For employers navigating these trends, our Compensation Team is available to assist: compensation@cascadeemployers.com.

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I-9 Audits on the Rise: How Employers Can Prepare

Cascade Compliance Team
compliance@cascadeemployers.com

With a shift in immigration policy, many employers are facing increased scrutiny regarding their I-9 compliance. I-9 audits, conducted by Immigration and Customs Enforcement (ICE), aim to verify that employers have properly hired only authorized individuals and such audits are expected to increase with the new Administration.

What are I-9 Forms?

The I-9 form is used to verify the identity and employment authorization of all new hires in the United States. Employers are legally obligated to ensure all employees complete an accurate form.  As a reminder, employees must complete Section 1 no later than their first day of employment and the employer must complete Section 2 within three business days from the employee’s date of hire.

Why are Audits Increasing?

The change in Administration will impact immigration enforcement and lead to increased audits.  Audits can act as a deterrent for employers who may knowingly or unknowingly hire unauthorized workers.

How to Conduct an I-9 Audit:

For employers looking to conduct an internal I-9 audit, ICE has provided guidance on this process, including what to do if you find errors.  Here are some general I-9 audit tips:

  1. Review I-9 Forms:
    • Accuracy: Check for completeness, correct completion of all sections, and proper documentation.
    • Timeliness: Ensure forms are completed and submitted within the required timeframe.
    • Authenticity: Verify the authenticity of supporting documents.
  2. Document Retention:
    • Proper Storage: I-9 forms must be stored securely and separately from personnel files.
    • Retention Periods: Employers must retain I-9 forms for three years after employment begins or one year after employment ends, whichever is later.
  3. Develop an I-9 Compliance Program:
    • Create Clear Policies: Establish written policies and procedures for I-9 completion and retention.
    • Train Employees: Educate all relevant personnel, including HR staff and managers, on I-9 requirements and procedures.
    • Regular Audits: Conduct regular internal audits to identify and correct any potential issues.

Proactive I-9 audits and a robust compliance program are essential for employers to minimize risks and avoid costly civil and criminal penalties. As always, Cascade is here for you so please reach out if you need support.

If you’d like more in-depth information on I-9 and immigration compliance, please register for our upcoming session on this topic on February 26th.

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Hot Compliance Question

Cascade Compliance Team
compliance@cascadeemployers.com

Question: How long do I need to keep I-9 forms?

Answer: Once an employee has left employment, employers must retain the I-9 file for either a minimum of 3 years after the date employment begins or 1 year after the person’s employment is terminated, whichever is later.

This means that you should retain I-9 forms for all current employees for as long as they are employed and then continue to maintain them for at least a year after they are terminated if they have worked for the organization for more than 2 years.

However, if an employee leaves the organization before they have been with the employer for 2 years, you must maintain the I-9 for longer than 1 year from the date of termination.

For example, if an employee is hired on 1/1/2024, and they leave the company on 2/1/2024, the employer must maintain that employee’s I-9 for 2 years and 11 months after they are terminated, because all I-9 forms have to be maintained for a minimum of 3 years. Therefore, that I-9 can be shredded on 1/1/2027.

If the employee is hired on 2/1/2019 and leaves the company on 2/1/2024, you may shred the I-9 form on 2/1/2025 because they would have been with the organization longer than the minimum of 3 years and therefore, must be kept for only 1 year after termination.

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Member Benefit Spotlight

By Sheryl Kelsh, Membership Development Manager
skelsh@cascadeemployers.com

Unlock the Power of Your Membership: Use Cascade’s HR Helpline Today!

As a valued member of Cascade, you have access to an incredible resource that can save you time, reduce stress, and provide peace of mind: our HR Helpline. With our HR Helpline, you have direct access to highly skilled professionals who bring unparalleled experience to the table. Why waste time hunting for answers when you already have a trusted partner ready to assist you?

Whether you need guidance on a complex compliance issue or want a second opinion before making an HR decision, our experts are here to support you every step of the way.

Here’s how the HR Helpline works for you:

  • Expert Advice at Your Fingertips: With just a phone call or email, you can reach our team of HR specialists, who can provide clear, actionable insights tailored to your specific situation.
  • Quick and Reliable Answers: Don't waste time searching online for answers that may or may not apply to your business. Get the correct answers right away.
  • Compliance Confidence: Stay up-to-date and compliant with ever-changing regulations with help from our knowledgeable team.
  • Flexible and Convenient: The Helpline offers up to 15 minutes of consultation per issue, and you can use it as often as you need. Small Business, Premium, and Pro members can access limitless phone and email consultations! *

Get Started Today!

If you haven’t contacted the HR Helpline yet, now is the perfect time to try it! No question is too big or too small—we're here to help. Simply call any of our numbers or email info@cascadeemployers.com to get the support you need.

Your membership with Cascade is designed to empower you with the tools and resources you need to succeed. Take advantage of the HR Helpline today and experience the value of expert HR guidance at your fingertips!

* Certain exclusions apply, including but not limited to defined projects, investigations, onsite support, training, compensation plan support, and drafting of specific employment documents or policies.

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