OFCCP released its directive (2018-04) to conduct compliance evaluations focused on the laws and regulations relating to individuals with disabilities on August 10, 2018. As federal contractors are aware, the OFCCP enforces three laws, Executive Order 11246, as amended, Section 503 of the Rehabilitation Act, as amended, and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended, which collectively, in short, prohibit discrimination and require affirmative action based on specific, enumerated characteristics. The agency and its procedures have evolved quite a bit in the last 10-15 years. However, while the OFCCP became much more effective in enforcing the Executive Order, little was done to have a significant impact on the rights of veterans and individuals with disabilities.
Recognizing this, the agency introduced new requirements for contractors several years ago. Each company that is required to have an affirmative action plan for individuals with disabilities must work towards an “aspirational goal” of 7.0 percent of its workforce to identify as having a disability. It is OFCCP’s perspective that, especially given the broad definition of an individual with a disability under the Americans with Disabilities Act (ADA), this goal should be relatively easy to meet. Many contractors, however, seem to consistently have a difficult time meeting the annual goal. The OFCCP requires that federal contractors assess their efforts every year and determine what else they can do to improve their efforts. It does take a good deal of work in order to meet the goal and, of course, be successful in an OFCCP focused review, so it is important to understand how to prepare.
In an effort to be more transparent, the agency has outlined what to expect during a focused review in the directive, the sample scheduling letter, and the FAQs, all available on its website. Further, it has published its scheduling list, so no company should be unprepared to receive a scheduling letter. (Therefore extensions are not likely to be granted.) Human resources and other relevant personnel should be familiar with these resources. The 503 Focused Review is new, so until we see a few of these completed, we will not know practical details. Further, it will be interesting to see how the different regions handle these reviews. However, at a minimum, expect that the agency will come on site.
The OFCCP will request policies and information on practices relating to individuals with disabilities and “conduct a comprehensive review” of these policies and practices. This includes speaking with management and human resources personnel responsible for implementing these policies and practices, as well as employees affected by these policies and practices, which of course is arguably any employee. OFCCP will “evaluate hiring and compensation data, as well as the handling of accommodation requests.” Perhaps most important is what is not in the directive. While OFCCP published in its FAQs that it will “not conduct a review of the Executive Order Affirmative Action Program (AAP) during a Section 503 focused review,” it has left its options open that it can request additional information beyond the scheduling letter. The directive is silent on investigating other matters. While the OFCCP personnel may not be actively looking for noncompliance outside of the 503 Focused Review, it cannot ignore other potential indicators that arise, so it is absolutely critical to a successful audit that company personnel are aware of any areas of concern.
So what are the best practices to prepare for a Section 503 Focused Review? In short, everything that a company should do to prepare for any other OFCCP audit. This includes, but is not limited to, establishing compliant AAPs, reviewing adverse impact, investigating complaints promptly, not deviating from policies and practices, properly training all relevant employees with EEO compliance practices, deciding how data will be submitted in a desk audit and any “extra” factors that will be provided, reviewing compensation outliers and determining explanations, establishing and documenting defensible pay practices, and of course, thorough 503 and VEVRAA assessments.
Some important information to keep in mind is that the agency is very interested in accommodations and how these are handled and recorded. Ensure that the company maintains proper records. The company will need to show evidence of its outreach efforts. It is a good idea to take a look at your policies and ensure they are being followed. Take a look at patterns of self-identification of disabilities. Can the company increase responses? What impact does company culture have on self-identification, if any? Finally, the OFCCP has a list of resources to assist the federal contracting community. While this is by no means a comprehensive list, it is wise to at least reach out to organizations provided by the agency. (See https://www.dol.gov/ofccp/Section503-FocusedReviews/files/Section503BestPracticesUpdated-3-6-19FINAL-030819FEDQA508c.pdf)
Remember that contractors must conduct regular assessments of personnel processes, as required by 41 CFR § 60- 741.44(b), and regular assessments of physical and mental qualifications, as required by 41 CFR § 60-741.44(c). Documentation of these assessments is required data in the 503 focused review scheduling letter.
Now is the time to ensure your company is prepared for an audit. There are no shortcuts, so ensure that you understand all the rules and can document decisions.
This article is intended for information only. It is not legal advice and should not be relied upon as such. For more information, please contact Lisa Kaiser at Lisa.Kaiser@Kaiser-Law-Group.com