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Posts from October 2013.

The Office of Federal Contract Compliance Programs (OFCCP) enforces regulations aimed at federal government contractors, with a specific eye towards preventing both intentional and unintentional employment discrimination based on any protected class (e.g. race, sex, or disability).  Many employers think that the OFCCP has no interest in them because they do no business with the federal government.  If only it were that easy.  Many clients have called after receiving notice that they now are considered a federal contractor because of a service that was purchased by a previously unknown federal government group.

It is important to be aware of your status as a federal contractor because you may need to comply with complex affirmative action practices, including for hiring, and you may need to keep detailed records of your efforts to comply.  In addition, OFCCP rules have been changing lately.  The new rules expand the affirmative action, non-discrimination, and related record keeping obligations for contractors regarding covered veterans and individuals with disabilities.  So, even if you thought you were doing it right – you may need to make changes.

Do the OFCCP rules apply to hoteliers and restaurateurs?

As a general rule, if your business does any work pursuant to a federal or federally-assisted contract, you could be subject to regulatory requirements under one or more of the laws enforced by OFCCP. The work that triggers OFCCP compliance obligations could include providing guest rooms, hosting a meeting or event, or providing catering for a federal government group.

Hotels have been subject to OFCCP compliance actions in the past.  Although we are aware of no compliance action directed at a restaurant, that likely stems from the relatively large dollar amounts required to trigger enforcement.  Contracts of less than $10,000 do not generally trigger OFCCP enforcement. Contracts of $50,000 or more generally require that each contractor/subcontractor with 50 or more employees develop a written Affirmative Action Program or Plan (AAP). Specific requirements will vary depending on the industry and services involved under the contract (for instance, construction contractors are subject to separate requirements from other service providers).  The OFCCP’s website is a good starting point for determining whether your business qualifies as a federal contractor, and includes tests and other resources.

If you suspect that you may be a federal contractor, you should become familiar with OFCCP requirements.  The most recently issued rules regard two laws enforced by OFCCP: Section 503 of the Rehabilitation Act (Section 503), which prohibits discrimination against qualified individuals with disabilities, and the Vietnam Era Veterans’ Readjustment Act (VEVRA), which prohibits discrimination against protected veterans. Both laws are administered and enforced by the OFCCP as they apply to federal contractors and subcontractors, and the new rules clarify and expand contractors’ obligations.

What do the new rules require?

Noteworthy provisions found in the new rules include the following:

Opportunity for Self-Identification. Contractors must invite all employee applicants to self-identify protected status at the pre-offer and post-offer stages of the hiring process, on a form to be published by the OFCCP. For disabilities, contractors can identify disabilities (visually or based on applicant disclosures) if the applicant does not self-identify as disabled, and the contractor must offer employees the opportunity to self-identify every five years.

Records Collection and Retention. Contractors must evaluate the effectiveness of their outreach and recruitment efforts to reach affirmative action goals.  The new rules require specific steps including measuring effectiveness of affirmative action efforts (e.g., comparing number of individuals with disabilities who apply to number hired) and determining necessary remedial actions. Contractors must retain certain documents for three years, including outreach and recruiting information, data collection analysis, and records regarding utilization and hiring benchmarks. OFCCP must be permitted to review documents either on-site or off-site, at OFCCP’s option.  (Also known as an audit.)

Specific Equal Opportunity (EO) Clause Reference. The new rules provide specific language to be used when the EO clause is incorporated into a subcontract so that subcontractors will be on-notice about their responsibilities as federal contractors.

Utilization Goals under Section 503 set at Seven Percent. Contractors must analyze the percentage of disabled individuals employed in each job group and compare their figure to the 7% goal. For contractors with 100 or fewer total workers, the analysis can be workforce-wide rather than by job group. If a contractor does not reach the 7% goal, the contractor must assess impediments to equal employment, and execute an appropriate program to reduce those impediments.

Hiring Benchmarks under VEVRA. Contractors can either use the national percentage of veterans in the civilian work force (currently 8%), or develop their own custom benchmark by considering factors including average percentages in the civilian work force over the previous three years, veteran participation in the state’s employment service delivery system over the previous four quarters, and the contractor’s assessment of its external outreach and recruiting efforts.

The final rules were published in the Federal Register on September 24, 2013, and become effective on March 24, 2014.  The rules are available at the following links:

If you have any questions about this development or how OFCCP-enforced laws impact your business, please contact Nancy Cooper or Lucy Bisognano.


National travel and technology industry experts explored technology trends, challenges and opportunities in the travel industry at the second annual TNT Conference last Tuesday, October 1 in Seattle. The TNT Conference featured industry leaders sharing thoughts and ideas about the future of how emerging technologies will impact and shape the hospitality landscape. The Conference featured two expert panels of users and suppliers that focused on big data and the distribution of content.  Following the panels, a Pundits Panel, consisting of consultants and investors, shared reactions and insights on the content that is summarized below. Culminating the Conference was a competition that featured Northwest companies that have developed cutting edge technologies focused on the travel and tourism sector.  The Conference judges heard presentations from buuteeq, dwellable, Poached, MovingWorlds, dealScoopr, and Appetas, all competing for the evening’s awards for Best Overall Pitch and Best Investment Opportunity.

 Below are highlights from the panel discussions. 

Big Data – The Power of Content 

Moderator, Scott Warner of Garvey Schubert Barer, focused the panel on an overarching question - What’s important and how do you use the data that’s being collected?

  • Mike Blake, of Commune Hotels, addressed the challenge of using data to make an organization more efficient by developing the big picture view of how to manage the vast amounts of available information at our fingertips. He used the analogy of the “two car accident”…if you’re above the traffic in a helicopter, you could probably predict when the accident was going to happen.
  • Other challenges posed by the panel included knowing what data to collect, what informative questions to ask and who are the right people to ask.  

Challenges of big data?

  • Privacy. Where do you draw the line between intimate and creepy?
  • Distribution. How do we take the data and share it to make it relevant to the hotel, front desk, and the staff?  
  • Maturity. We have the infrastructure but not the maturity to handle big data.
  • Utilization. We have the power of big data but we’re only using “medium data.”

How do you make it relevant to people that need to consume this data?

  • Storage is relatively inexpensive these days so collect and save everything and come back to it when you need it.
  • Figure out what questions are rising to the top and start looking for trends, which then opens up the ability to start asking the right questions.
  • Arm your staff with information so they can treat VIP guests appropriately.
  • Take advantage of the “click through” information on websites. Every website should have browser and IP address information. Leverage this information to create a good customer experience.

Structured v. unstructured data?

  • Data co-ops need to look outside their own industry and start sharing information much like the retail industry. It’s for the betterment of the company and customer experience.
  • Understand the market from the entire industry and not just from your specific market.
  • ALL of your information is currently being collected such as credit cards, shopping habits and spending.
  • Walk before you run – first get structured data in order, then think about adding more data.


John Burns, of Hospitality Technology Consulting, moderated this panel focused on distribution including the challenges and disruptions.

What are the latest generational technologies?

  • “Pop unders” are similar to pop ups and occurs when a customer hits the “leave button” on a website and directs you to another related site. The goal is to turn shoppers into buyers.
  • User interface can now change and adapt to the varying screen sizes (from phone to tablet to laptop to desktop), which is a very simple concept to wrap your head around, but difficult to implement.

Distribution challenges?

  • Mobile. 50% of business is now coming from mobile devices and tablets and it’s growing exponentially, especially in other countries like Japan and Asia Pacific. Your mobile phone is now your credit card, room key, and plane ticket. Apps are now primarily being designed for mobile.
  • Keeping up! This technology will not slow down; it will only get more complicated. Those working in the field probably need to become experts on this new way of doing business.
  • The new iPhone 5 has more computer power than when NASA landed on the moon in 1969. Now we are carrying this thing in our pocket and thinking nothing of it.

The idea of globalization?

  • You must think globally.
  • Think about IP issues, antitrust, pricing, and maintenance.
  • Hire teams on the ground in other regions.
  • Understand what customers in other regions are looking for.
  • Wherever you are in the world, there’s data that can help you in any market. The power of big data allows you to leverage information and respond centrally.

What to expect looking forward?

  • Distribution. We’re going to see more programmatic marketing solutions enabling industries or corporations to take advantage of new technology.
  • Volumetrics and more biometrics.
  • Increase in coding skills. Expect to see 200 more hotel apps in the next two years
  • Continued industry consolidation (think William Shatner of Priceline, Booking, Kayak, and Travelocity).

The Pundits' Reaction

This panel was moderated by Rich Siegel, of Hospitality Upgrade. 

  • For a long, time data wasn't in a hoteliers’ job description, it was centered on accommodation. Now it’s becoming part of the job.
  • Make the data easily accessible to your employees for better customer service. Know your clients. Connect the data and implementation.
  • Aggregate. Normalize. Then make the information visible.
  • Privacy is dead. The younger generation doesn't understand the idea of privacy.
  • Draw the line between creepy and courteous. Don’t scare your customers. Just because you can, doesn't mean you should.

The Pundits' reaction was followed up by the awarding of Best Overall Pitch and Best Investment Opportunity.  Drum role please…MovingWorlds, a company that helps customers donate their professional skills worldwide, won Best Overall Pitch and Appetas, a company that designs affordable websites for the restaurant industry, won Best Investment Opportunity. Congratulations to both companies. Conference attendees agreed that we will see great innovation from both of these companies in the future!

On behalf of Zino Society and Garvey Schubert Barer, I would like to thank all of the participating companies: Appetas, Clairvoyix, Commune Hotels, Digital Alchemy, Benchmark, Hipmunk, Thayer Ventures, Google, Roomkey, Tnooz, Concur, Jon Inge & Associates, Expedia Media Solutions, Voyager Capital, Hospitality Technology Consulting, nSight, Travelport, buuteeq, dwellable, Poached, MovingWorlds and dealScoopr. A special thank you to our 2013 sponsors: Clark Nuber, GeekWire, Guestware, and Hospitality Upgrade.

If you have interest in participating in next year’s TNT Conference (or want more information about this year’s Conference), please email me, Scott Warner, or Ruth Walters.

To view pictures from the 2013 TNT event, click here.

To read about 2012’s Conference, click here

As fast food workers across the country stage walkouts in a push for a $15 hourly wage and the Obama administration renews its call to boost the federal minimum wage, states on the left coast have already embraced employee-friendly increases.

Oregon, the state with the second-highest minimum wage in the country, announced last week that it will raise its minimum wage to $9.10 in 2014.  It’s in good company: Oregon’s neighbor to the north just announced that Washington will raise its state minimum wage to $9.32 (the highest in the nation), and Oregon’s neighbor to the south just enacted a law that will hike California’s minimum wage to $10 per hour over the next three years in one dollar increments – from $8 to $9 on July 1, 2014, then to $10 on January 1, 2016.

American Flag Piggy Bank

The current federal minimum wage is just $7.25 per hour, but at least 19 states and the District have set a higher wage for workers.  Nine of these states (Oregon and Washington among them) have indexed their rates to inflation, such that the rate is revisited every year to keep pace with changes to the economy.

Certain cities have set minimum wage even higher than the state minimum wage.  San Francisco, for example, currently has the nation’s highest minimum wage of $10.50 per hour.  Meanwhile, the City of SeaTac, Washington will have a unique $15 minimum wage initiative on its ballot this November.  Known as Proposition 1, this union-sponsored initiative singles out hospitality and transportation employers within the City of SeaTac (home of Sea-Tac Airport).

Numerous state legislatures across the country have also been introducing bills to raise their minimum wages.  These wage hikes come amid a national debate over whether minimum wage workers should be paid more – what advocates have called a “living wage.”  There’s little consensus: economists disagree on the effects of raising a minimum wage and the issue is politically divisive.  Some contend that increasing wages can improve the economy for everyone by increasing the demand for goods and services because those that work would spend more if they had money in their pockets.  Others argue that raising wages by government mandate leads businesses to cut jobs and reduce employees’ hours, effectively hurting the workers who were supposed to benefit from the increased wages.  As the debate continues, it is unclear what other states – or even the federal government – will do in the future. Stay tuned for updates on significant changes.

Please email me or Greg if you have any questions.

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Greg Duff
Greg Duff founded and chairs Foster Garvey’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.

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