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With summer coming to an end, activity at the Office of Federal Contract Compliance Programs (OFCCP) seems to still be heating up as the agency begins to wrap up its final full fiscal year of the Obama Administration—which closes September 30.

In a surprise move, the agency has not yet issued a new scheduling list during this fiscal year. Instead, OFCCP continues to schedule compliance reviews from previously issued scheduling lists, meaning that contractors who received advance notices of a potential compliance review in 2014 and 2015 may still be scheduled. Part of the delay seems to be the agency is slowly working its way through its current inventory of open compliance reviews with more in-depth follow-up questions being the new normal—resulting in longer audits that are more difficult and expensive to defend.

With OFCCP receiving more detailed personnel and compensation data up-front thanks to its 2014 revisions to the Scheduling Letter and Itemized Listing, the opportunity to find “indicators” requiring further investigation has grown. Compliance Officers are digging in, running many different analyses on the summary personnel data that contractors provide. They look at the impact of selection practices on whites, minorities, particular races compared to all others, and sub-racial issues—(such as a preference for Hispanic workers that negatively impacts blacks or whites). While the drill is the same, requests for more detailed applicant, promotion, and termination data are common place—with a continued focus on potential steering issues. Requests for interviews with compensation managers, and then detailed pay factor information for large portions of the workforce, remain popular as the agency attempts to wrap its arms around the complex pay systems of many contractors.

bq lquo…consistently asking for more detailed information about a contractor’s review of its personnel processes, physical and mental job requirements, and the results of its audit and reporting rquo

More detailed questions about contractor’s compliance with the revised Section 503 and VEVRAA regulations are also par for the course. At this point, all contractors should be in “full compliance” with these new requirements. As a result, the agency’s expectations have grown. It is particularly focused on whether contractors have completed—and documented in writing—an adequate evaluation of the effectiveness of their outreach efforts for Individuals with Disabilities and Protected Veterans. Compliance Officers are also consistently asking for more detailed information about a contractor’s review of its personnel processes, physical and mental job requirements, and the results of its audit and reporting process. We expect these questions to continue to intensify as the agency and contractors implement these new requirements in the annual affirmative action plan process.

In terms of enforcement, recent OFCCP press releases show the agency is no longer content to resolve cases through conciliation for pennies on the dollar—as the agency has filed several administrative enforcement actions after conciliation failed to yield a satisfactory resolution. The agency continues to focus heavily on steering practices, which according to OFCCP often result in reduced compensation on the basis of race or sex. OFCCP also entered into several conciliation agreements based on a contractor’s use of a test that had an adverse impact on protected groups without a proper validation study. However, the agency’s “bread and butter” enforcement continues to be hiring discrimination claims—consistently “following the numbers” to seek relief when a contractor’s selection practices have an impact on a protected group, including men and whites.

What can contractors expect in the next couple months? We expect OFCCP to continue its focus on:

  • contractor compliance with the new Section 503 and VEVRAA requirements;
  • compensation;
  • and potential steering issues.

Most audits will involve follow-up questions of some sort, and contractors should continue to expect a detailed vetting of their affirmative action compliance, selection decisions, and compensation practices during reviews. On the policy side, the Department of Labor’s proposed guidance regarding the so-called “Blacklisting” Executive Order may still be finalized this year. Also, OFCCP recently issued its revised sex discrimination guidelines, and while no new data collection or analyses are required, contractors would be wise to review their pregnancy, leave, and benefit programs to ensure they are in line with the newly announced requirements. Finally, the Equal Employment Opportunity Commission submitted a proposal to the Office of Management and Budget that will revise the EEO-1 Report to require all employers with 100 or more employees to provide pay data to the federal government on an annual basis. The public comment period for this proposal closed on August 15, 2016.

For more information on any of these updates, or for support managing your affirmative action compliance needs, please contact a Berkshire expert at 800.882.8904.


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