As we stand back and examine what happened during 2018, it is natural to simply catalogue the numerous changes that occurred at the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP). There were multiple new directives, new initiatives, and new personnel at the agency. There were actions taken that we had never seen before from the agency, including the public release of information on how the agency chooses organizations for compliance review. Programs to recognize voluntary efforts by federal contractors and subcontractors were reintroduced, and issues that were troubling to the federal contractor community were addressed.
A common theme unifying OFCCP’s current approach to enforcing its regulatory mandates might be summed up with the label “A New Partnership.” OFCCP is changing the way it interacts with federal contractors and subcontractors. In return, federal contractors and subcontractors are being asked to change the way they approach their regulatory obligations.
OFCCP’s Role in The New Partnership
During the Obama administration, OFCCP saw its role as that of an advocate for workers. Federal contractors and subcontractors were held in suspicion, with the agency believing there was extensive discrimination occurring in the private sector. This assumption of discrimination was most explicitly recognized in OFCCP’s various compensation initiatives. The agency routinely released statistics proclaiming that women and minority employees were paid less than male and white employees, and formulated policies and programs that attempted to correct this stated imbalance. Compliance reviews became a lengthy slog where OFCCP would do a “deep dive” into an organization’s policies and decisions in order to root out employment discrimination.
In 2018, OFCCP decided that it would reach out to employers and attempt to establish a more positive relationship with the regulated community. OFCCP’s desire to establish a new partnership with federal contractors and subcontractors was clearly evidenced by the presentations given by Acting OFCCP Director Craig Leen at the Industry Liaison Group (ILG) National Conference this summer. Acting Director Leen stressed that the agency would incorporate four principles into its decision-making. These principles are transparency, certainty, efficiency, and recognition.
The new partnership between OFCCP and the federal contractor community as well as OFCCP’s commitment to the four principles noted above is well illustrated by three documents produced by the agency.
- Scheduling Methodology – In April of 2018, OFCCP released a document explaining how organizations were selected to receive notices informing them they would be undergoing affirmative action compliance reviews. While the public knew that OFCCP had a system called the Federal Contractor Selection System (FCSS) that was used to select the organization to undergo a review, OFCCP had traditionally been unwilling to release information on the particular factors used in FCSS. In April, OFCCP discussed those factors in some detail, providing information on why certain organizations were more likely to be chosen and how many compliance reviews any given organization could expect. This was an important example of OFCCP’s decision to be more transparent with the federal contractor community.
- “What Contractors Can Expect” – In August of 2018, OFCCP released a document entitled “What Federal Contractors Can Expect.” This document is often referred to by OFCCP as a “bill of rights” for federal contractors and subcontractors. The document states that organizations should be able to expect that OFCCP will provide compliance assistance to the contractor community and that OFCCP will attempt to conduct compliance reviews in a timely, efficient, and reasonable manner.
- “Transparency in OFCCP Compliance Activities” – In September of 2018, OFCCP released Directive 2018-08, which is entitled “Transparency in OFCCP Compliance Activities.” The Directive provides information on the ways in which OFCCP expects to work with federal contractors and subcontractors in a transparent and collaborative manner during a compliance review. The directive reviews additional guidance OFCCP has published, including the two documents noted above. It then discusses actions the agency expects to take during all phases of the compliance review process to work effectively with federal contractors and subcontractors.
These documents, along with various other publications and pronouncements from OFCCP, establish that OFCCP intends to treat federal contractors and subcontractors as meaningful partners in providing equal opportunity to applicants and employees.
The Federal Contractor’s Role in the New Partnership
In any good partnership, both partners are expected to bring something to the table. Such is the case with the new partnership between OFCCP and the federal contracting community. OFCCP has indicated that there are expectations federal contractors and subcontractors should have of the agency; OFCCP has also indicated that there are expectations that the agency has of federal contractors and subcontractors.
The role of federal contractors and subcontractors in the new partnership is well illustrated by three documents OFCCP has released.
- “Affirmative Action Program Verification Initiative” – In August of 2018, OFCCP released Directive 2018-07, which is entitled “Affirmative Action Program Verification Initiative.” The directive makes it clear that OFCCP expects federal contractors and subcontractors covered by the agency’s affirmative action program regulations are completing their affirmative action plans (AAPs) on an annual basis. Acting Director Leen has stated that 100% of the organizations required to complete AAPs should be doing so. Directive 2018-07 announces that there will be some type of verification process to ensure that this is occurring. While the specific form that the verification process will take was not announced, Directive 2018-07 gives federal contractors and subcontractors fair warning that some form of certification of completing AAPs is on the horizon.
- “Analysis of Contractor Compensation Practices During a Compliance Evaluation” – In August of 2018, OFCCP also released Directive 2018-05, which is entitled “Analysis of Contractor Compensation Practices During a Compliance Evaluation.” Directive 2018-05 rescinds OFCCP’s previous compensation directive and provides greater transparency regarding OFCCP’s approach to evaluating compensation policies, practices, and decisions. Directive 2018-05 also re-establishes the fact that OFCCP expects federal contractors and subcontractors are making direct and concerted efforts to prevent compensation discrimination within their organizations.
- “Transparency in OFCCP Compliance Activities” – Most of Directive 2018-08 is devoted to providing information on how OFCCP intends to be an effective partner with federal contractors and subcontractors. However, Directive 2018-08 clearly states that the federal contracting community has responsibilities in this partnership. Along with completing affirmative action plans, federal contractors and subcontractors are expected to (1) prevent discrimination against the classes covered by the federal affirmative action laws, (2) submit AAPs and other information in a timely way during a compliance review, and (3) allow OFCCP access to their establishments and records during a compliance review.
Outgrowths of the New Partnership
In the coming year, federal contractors and subcontractors can expect a number of important outgrowths of this new partnership with OFCCP, including the following:
- OFCCP will help federal contractors and subcontractors meet their federal affirmative action obligations. OFCCP will be providing compliance assistance prior to the time organizations undergo a compliance review, and OFCCP will provide information on what organizations can expect during a compliance review so that federal contractors and subcontractors can prepare accordingly.
- OFCCP will provide more insight to organizations on what the agency is finding during the course of compliance reviews so that organizations can respond to questions and take any necessary corrective actions.
- OFCCP leadership will respond to concerns that federal contractors and subcontractors raise about the manner in which compliance reviews are being conducted if OFCCP compliance officers are not acting in a manner consistent with OFCCP’s new approach.
While these positive developments should benefit federal contractors and subcontractors, employers should also understand their role in the new partnership.
- OFCCP will expect federal contractors and subcontractors that have obligations to complete affirmative action plans are, in fact, preparing AAPs on an annual basis.
- OFCCP will expect that efforts are being made to prevent discrimination in all facets of employment, including recruitment, selection, promotion, retention, and compensation.
- OFCCP will expect that increased knowledge of affirmative action obligations leads to more effective implementation of all parts of the affirmative action regulations.
Acting Director Leen has commended the federal contractor community for their efforts to provide opportunities to all employees, noting that most OFCCP compliance reviews end with a notice of compliance. However, he has also stated that there can be no “free riders” in the contractor community, and that OFCCP will aggressively enforce the rules that have been established. The new partnership established in 2018 is likely to bear interesting fruit during 2019.
Please note: Nothing in this article is intended as legal advice or as a substitute for any professional advice about your organization’s particular circumstances. All original materials copyright © HR Analytical Services Inc.