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On April 18, 2012, I had the honor of testifying before the U.S. House of Representatives’ Subcommittee on Health, Employment, Labor and Pensions about various OFCCP-related issues. I have to say that it was one of the highlights of my career so far. It was a lot of work to prepare for the hearing, but I would gladly do it again, if invited.
The genesis for my testimony began in February 2012 when the U.S. Chamber of Commerce convened a meeting in Washington to discuss the OFCCP, what was happening on the enforcement side of the house, and what the likely impact of the series of proposed regulations might be on the government contractor community. The meeting was very notable, yet disheartening to me because what became clear was that it appears that OFCCP had really begun to deviate from its mission. No one in that room was anti-veterans, for example, but it appeared clear to everyone without exception that OFCCP’s proposed regulations were going to impose a significant and substantial amount of “check-the-box” paperwork and were not going to result in meaningful outreach to help more qualified veterans to get hired. Everyone was in favor of hiring more qualified individuals with disabilities, but no one who spoke believed that imposing a 7% across-the-board disability goal for every affirmative action plan job group was going to accomplish that purpose.
With a Republican-controlled House and a Democratic-controlled Senate, President Obama and the Democratic Party clearly are looking to advance their agenda through the rulemaking powers of the Executive Agencies, like the Department of Labor and its sub-agency, OFCCP. The take away from the Chamber meeting was to ask ourselves whether there was anything that the business community could do to raise awareness of how the agency has evolved over the past 24 months apparently to become numb to the genuine concerns of companies doing business with the federal government. These were companies that sincerely want to do the right thing, and proactively be in compliance, but there was no doubt in the room that the OFCCP’s proposals are going to hurt business, especially small business, and are not going to lead to more hiring or fair pay.
One of the possibilities of raising the visibility of the contractor community’s concerns was to involve Congress, and specifically the Republican-controlled House of Representatives’ committees or subcommittees that deal with labor and employment law issues. The problem, though, is that OFCCP is not one of the agencies that Members of Congress and their staffs are used to dealing with or reading about. By budget size, it’s a relatively little agency that wields a significant amount of unchecked authority but only over a confined segment of the population – companies that are doing business directly and indirectly with the U.S. Government. And there tends not to be a lot of sympathy towards government contractors because when Congress and its staff hear the words “government contractor,” they tend to think of the defense and aerospace industry giants that have hundreds of millions of dollars in federal contracts. Those companies ought to be able to bear “a little extra” burden. In shaping that message, the media is not focusing on the “little guy” that signed its first government contract for only $150,000, where the profits might be $20,000, and the companies don’t appreciate that the cost of compliance in the first year is far more than that. A lot of small businesses do not have access to the resources they need in advance to help them make an informed decision about the real costs of compliance.
But we know that the overwhelming percentage of contracts are awarded at amounts below $1,000,000 and that a huge percentage of companies contracting with the government have relatively small workforces. These are not companies that have layers and layers of HR overhead and the ability to keep hiring administrative assistants to maintain all the paperwork and records that current (and proposed) regulations expect.
Thus, in order for there to be a hearing in the first place, the committee members and their staffs needed to investigate who OFCCP is, how it audits, what its jurisdiction is, what the proposed regulations would involve, how are companies trying to find ways to comply, and what are the barriers to compliance (both in terms of resources and dollars).
Being physically present in Washington DC, I felt compelled to offer to help by going up to the Hill if asked to do so. I’m only a cab ride away. Following a series of meetings and conference calls, the Subcommittee approached me about testifying, and I agreed to do so. At a hearing like the one the Subcommittee envisioned, there would be only five minutes to read a prepared statement, and then each witness could be subject to questions from the members of Congress who are on the subcommittee. The opportunity to advocate for the business community would primarily come from the written statement, which could be no longer than 15 pages single spaced.
The Republicans invited three witnesses. One witness would focus on the proposed regulations; one witness would focus on audits, compliance, and enforcement; and the final witness would personalize what this meant to a particular company. Jeff Norris from EEAC was the regulations witness. I was the audit, compliance and enforcement witness, and Dana Bottenfield from St. Jude’s Children’s Hospital in Memphis was the company personification. The Democrats invited one witness, Ms. Fatima Goss Graves from the National Women’s Law Center. It was an honor to sit with all of them at the witness table.
In my testimony, I tried to raise two important points for the Subcommittee’s consideration: (1) the dollar thresholds to impose jurisdiction on a new government contractor are far too low and ought to be raised to give very small businesses with low dollar contracts a complete pass and larger businesses with larger contracts more time to come into compliance before they could be audited and (2) the current OFCCP administration is overwhelmingly not receptive to a constructive, productive dialogue about ways in which both sides can accomplish their mutual goal of ensuring nondiscrimination in the workplace.
My most interesting verbal exchange came at about 51 minutes into the hearing when Representative Tierney asked me some questions about my position, but seemed intent on delivering a message. He repeatedly asked me whether I thought there ought to be a federal agency that is enforcing the nondiscrimination laws against minorities, women, veterans, individuals with disabilities, and so forth. Of course there should be, as my written statement said. I spend practically my every waking moment trying to help companies ensure that what they are doing is providing and ensuring equal employment opportunity. Of course I believe in nondiscrimination.
Perhaps some Members were surprised by my statement that companies can get pulled into OFCCP’s jurisdiction without their knowledge or consent, believing instead that only companies that affirmatively and willingly contracted with the federal government could be hooked in by OFCCP’s jurisdiction. This notion that it is a privilege to do business with the federal government comes from the idea that a company knew or ought to have known what it was getting into at the outset, that it should have gone into its contractual arrangement with the government with “eyes wide open,” and ought not to be complaining, now, about the “price” of doing business with the federal government.
But we in the contractor community know far too well that companies get hooked into OFCCP’s jurisdiction all the time as subcontractors, vendors and suppliers without their consent. When Company A is a supplier or a vendor to Company B, and all of a sudden company B decides to become a federal contractor, if what Company A is supplying is “necessary to the performance” of Company B’s new federal contract, and is more than $50,000, then Company A is a covered subcontractor, and all of OFCCP’s written affirmative action plan obligations and regulatory burdens are imposed on Company A. At $100,000, the veterans’ regulatory obligations commence.
Representative Tierney also remarked that having the hearing on April 18, before OFCCP had a chance to digest the contractor community’s comments on the proposed regulations, was premature. His point was that the Republicans ought to give OFCCP a chance to finalize the proposed rules and then hold a hearing.
In my opinion, OFCCP needs to hear from the contractor community before it finalizes a rule, not after, but we will have to wait and see when OFCCP publishes any of the final rules, whether it has listened. OFCCP’s Director, Patricia Shiu, shortened her remarks to the South West and Rocky Mountain ILG regional conference on April 11 to allow contractor representatives in the audience to ask unscripted questions from the floor, and one of her remarks to the audience was that she wanted us to know that OFCCP hears the business community.
I don’t think it’s enough for OFCCP’s Director to tell the business community that OFCCP “hears” us. The proof that OFCCP hears us will be whether OFCCP compromises in significant, substantial, and meaningful ways when it publishes those final regulations. If the regulations are just pushed through without modification on the parts that are important to the business community, then we will know that OFCCP has not really listened.
If you have not read my submitted written testimony or the testimony of the other witnesses, you may find it here. http://edworkforce.house.gov/Calendar/EventSingle.aspx?EventID=289630
There is also a link to the video on the Subcommittee’s website, if you are interested in viewing it. http://edworkforcehouse.granicus.com/MediaPlayer.php?view_id=2&clip_id=83