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On Friday, May 28, President Biden released his request to the Congress for a budget for the Executive Branch of the federal government for Fiscal Year 2022 (beginning October 1, 2021). The OFCCP also filed a 29-page Budget Justification which compares their budget requests and budgets enacted in the prior two years. The OFCCP is seeking an approximately $35 million increase for FY 2022 with an increase of 188 FTE to 639 FTE. In addition, the OFCCP is asking to gain significant investment in staffing, modernization of its technology, reinvigorating construction enforcement and accountability, and racial equity.

The funding request clearly supports the maintenance of the Affirmative Action Program Verification Interface (AAP-VI), a request launched by the prior administration to create a portal for contractors to self-certify that they have completed their Affirmative Action Programs (AAP).

OFCCP has indicated for the past 5 years it would seek to satisfy its recommendation for a verification/certification portal.

According to the GAO Recommendation, a new contract was awarded in September 2019 to continue this work. OFCCP is anticipating obtaining approval from the Office of Management and Budget to collect annual certifications using this portal. When launched, the portal will allow all contractors to certify annually that they have developed and maintain compliant AAPs for each of their establishments or functional/business units. Those contractors who fail to certify, or who certify that they do not have compliant AAPs for each of their establishments or business/functional units, will be more likely to be scheduled for compliance evaluations. While the agency has made considerable efforts to implement this recommendation, the processes described have not been fully implemented.

The OFCCP found in 2016 that close to 85 percent of evaluated contractor establishments did not submit their AAPs within 30 days of OFCCP’s request during compliance evaluations. A central challenge to the OFCCP is the failure of contractors to provide a timely AAP during compliance reviews. If approved by OMB, OFCCP plans to utilize the certification data to more effectively build a neutral scheduling process that will enable the agency to focus its resources on compliance evaluations of contractors where there are more likely to be indicators of systemic discrimination.

Strong evidence exists that OFCCP is moving forward as the website, which was recently posted, states AAVI is coming soon. This verification would initially take the form of OFCCP review of a certification, followed by potential compliance checks, and may later take the form of annual submission of AAPs to OFCCP for review.

The message from OFCCP is that companies with federal contracts, subcontractors as well, are being nudged to be prepared for AAP verification.

 

We are just beginning to move into what we hope will be a “post-COVID” world.  At the same time, responding to race-related tragedies, companies are struggling with how to address the structural inequities infecting our society.  The two issues tie together.

Right now, there are 9.3 million unfilled jobs in the US, the highest number in history.  Earlier this year, job openings increased by 8%, hires by only 3.7%.   According to the National Federation of Independent Businesses, 44% of small businesses could not fill open jobs this April.  If your employer is having difficulty hiring, a combination of Circa’s job-finding resources and staffing policy changes such as those outlined below will go a long way towards meeting business needs – and doing good.

Theories about why it is hard to hire abound.  Some say that enhanced unemployment benefits are keeping people at home – but the largest recent increase in hires are in lower paying jobs.  Many schools and daycare centers have yet to reopen, which may keep people in caregiver roles for now.  Whatever the reason, with a forecast that the US economy will grow 6% this year, demand for employment is likely to remain high – and openings remain hard to fill.

In 2018 and 2019, when overall unemployment was under 4%, minority employment increased substantially.  The Federal Reserve concluded that this was because in a tight labor market, employers tried harder than before to hire from historically marginalized groups.  These gains were lost with COVID.  They can be reproduced, and bettered, if employers keep in mind what has impeded minority employment in the past, and adjust hiring practices accordingly.

Employers should ensure that they both reach out to and do not needlessly disqualify members of minority groups:

Of course, hire the best candidates.  The best candidate may be the minority candidate you evaluate for potential. The extra effort you put in to hiring those historically marginalized will help our society, your employer and, of course, those you help mainstream into American life.

 

On April 27, 2021, President Biden announced that the hourly minimum wage for federal contractors would be increased to $15.00. That is a substantial increase from the current $10.95. This Executive Order indicates another sign that the administration is going to be using its mandate with federal contracts to effect positive change.

“Raising the minimum wage enhances worker productivity and generates higher-quality work by boosting workers’ health, morale, and effort; reducing absenteeism and turnover; and lowering supervisory and training costs.” Says President Biden. “Accordingly, ensuring that Federal contractors pay their workers an hourly wage of at least $15.00 will bolster economy and efficiency in Federal procurement.”

To review the Executive Order in its entirety, click here.

 

Related Article: Discussing Racism in the Workplace

It’s been a tumultuous year, with violence that for some is forever embedded in our minds. Relieved our justice system efficiently and effectively brought forth a verdict in the Derek Chauvin trial. Some may say justice has been served. Judicially yes. In the context of social justice, this never would have happened, and George Floyd would still be alive.

We’re not here to debate the verdict, the character of George Floyd or Derek Chauvin. We want to use this historical moment as a turning point, to look ahead at what comes next. Where do we go from here? How best to use this information from this chapter of life to move forward and create new chapters that have meaning, to build harmony and momentum that bring us all together and prevents this from happening again.

As a company with a mission that embraces diversity, equity and inclusion, empowering organizations to attract, retain and cultivate a diverse workforce to transform business, we take a moment to reflect and understand what may be learned from this historical event.

Key Learnings

Where do we go from here?

Battles are won when people come together peacefully. Eliminating preconceived notions and assumptions. Taking time to listen to each other’s stories, to find common ground in shared experiences and build new ways, paths, methods, create ideas never before seen. This is where change interconnects and diversity thrives.


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Tips on Navigating Black Lives Matter in the Workplace

Power and Privilege in the Workplace Highlights

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You have done everything you are supposed to do in order to increase minority and female hiring. You are happy with targeted outreach done in tandem with Talent Acquisition. Circa’s job postings have returned a diverse crop of applicants. But if you still have hiring shortfalls in  your Affirmative Action Plan where you had prior-year underrepresentation – you are not alone.

In a recent survey only 13% of HR leaders believe their organizations have been effective at increasing diversity representation. Why? One reason is implicit bias. It can lead well-meaning hiring managers to base decisions on cultural assumptions. Worse, research shows that in some cases diversity training, especially ‘one-off’ training as opposed to practice-oriented workshops, can have a backlash effect that reinforces bias. Science shows us that it can be difficult for human beings to alter preconceptions.

Bias, implicit or not, has a lot to do with African-Americans facing as much discrimination in hiring today as 25 years ago. Similar barriers affect women, individuals with disabilities, older employees, members of the LGBTQ+ community, and first-generation immigrants. 

You can use a proven toolkit of evidence-based processes to mitigate bias and ensure diversity in selection:

These practices create guideposts that help ensure robust diversity in selection. Changing policies and procedures has a much more immediate effect than trying to change old habits, hearts and minds.

Once the workforce is diverse, mentoring, cross-training and other programs that spark engagement and increase contact among different groups should create a culture in which differences no longer create barriers.  Until then, use the guideposts.

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OFCCP has a new “AAVI” landing page or Affirmative Action Plan Verification Interface. This appears as an indication that the OFCCP is proceeding with AAP certification/verification.

What is the OFCCP’s AAP Verification Initiative?

OFCCP’s AAP verification initiative has been a key focus for the agency, and the annual AAP certification proposal is at the final approval stage. Federal contractors need to be ready to certify they have prepared AAPs, as well as be ready to submit AAPs when scheduled for an audit.

The web page says “Coming Soon” but should it really beg the question “Are you ready?”

Check out our previous blog post on what the AAP verification may mean for federal contractors.

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OFCCP has amended its Supply and Service Scheduling List by removing all establishments selected to receive focused reviews and compliance checks. From the original 2,250 establishments in the FY2020 CSAL, the list is now down to 500 establishments. Essentially what is remaining in the CSAL are establishment reviews, FAAPs, & CMCE reviews.

The agency published an FAQ stating that establishments who have compliance checks or focused reviews in progress from prior lists will still continue as scheduled. Construction Compliance Checks will also proceed as planned with no changes.

Related article: Circa’s Week in Review: Celebrate Black History Month, OFCCP Religious Final Rule

OFCCP Closes Contractor Portal, Customized Employment Video

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President Biden revoked former President Trump’s controversial Executive Order 13590 on “race and sex stereotyping” the day of his inauguration. Given the chilling effect that the Order had on diversity and inclusion training, this was not unexpected.

The fate of many other Trump-era changes affecting OFCCP practice, none as controversial and many enthusiastically received by federal contractors, is a lot harder to make out.

For example, the OFCCP’s scheduling letter FAQ still outlines an “automatic” extension for filing  audit support data. The OFCCP posted this in June 2020 after two years of discussion with the NILG concerning the difficulties federal contractors face in order to meet the initial 30-day deadline while multitasking other Affirmative Action program responsibilities. The extension seems to have been a real help to contractors, at little cost to the Agency. However, the OFCCP’s FAQs are “sub-regulatory” guidance that the Agency can change with the stroke of a pen. Will this and other more substantive recent changes survive? This early on, it is hard to know.

It is, however, a good time to put the OFCCP’s program changes of the last years into perspective.

For one thing, without Director Leen’s insistence on getting an automated Case Management System up and running in 2019, the OFCCP would not have been able to work remotely during the pandemic in 2020. It seems likely that OFCCP telework and virtual conferences are here to stay. The Agency has shrunk to 400, half of the Obama administration headcount, so it needs all the efficiency it can muster.

There has been so much activity around focused reviews that it is easy to forget they are very new. Little more than two years ago they were an unused, single-line reference in the regulations.[1] Now there are two focused reviews up and running (Section 503 and VEVRAA) and three more the prior administration had the works, which the new administration might see fit to implement (Promotions, Accommodations and  Affirmative Action Programs, the last of which would be a cut-down version of a supply and service audit). Overall, the idea of a simple, targeted review is a good one (see Circa’s blog on Section 503 focused reviews). We’ll have to wait and see how the new administration handles them.

The outgoing OFCCP administration’s focus on transparency in Agency operations was very welcome. Examples include posting the Corporate Scheduling Announcement Letter (CSAL) audit selection methodology, which had been shrouded in secrecy; posting a sample of the “Standard Compliance Evaluation Report” (SCER) that Compliance Officers use to rate employers’ Section 503 Focused Review results; and restoring the Ombuds function to provide employers with a means to iron out audit issues. The Omsbuds service received 128 referrals in its first year of operation, and closed 118 of them. Not a bad start.

Another point that should not be overlooked is the Agency’s recent championing of outreach to Historically Black Colleges and Universities (HBCUs) and other minority-serving institutions.  Please use the resources found on the OFCCP’s website here and here when planning your recruiting activities.

The big-ticket Agency item of recent years was the Transparency Directive (Dir. 2018-08), now incorporated into OFCCP’s regulations (see Circa’s  blog on the “PDN rule”). Long story short, the rules change gives employers an important tool for meaningful discussion about audit issues. It is also a good start for better alignment of OFCCP audit practice to important legal requirements. There is concern, however, that the new administration might change the regulation to limit the transparency and certainty in OFCCP operations that the recent PDN rule changes promise.

Bravo to the outgoing OFCCP administration for deciding not to make use of the EEO Component 2 pay data detail collected for 2018 and 2019. However, there are moves afoot for the EEOC and OFCCP to require additional pay data collection for future years. It is too early to tell, but we could well see new pay data reporting requirements.

Will the Biden administration dust off the Obama-era labor law “violation” reporting requirement (commonly referred to as “blacklisting”)? Will upcoming AAP “verification” requirements mean that federal contractors will have to file electronic versions of their AAPs with the OFCCP? I hope not.  But we’ll have to wait and see!

 


[1]  See for example 41 CFR Sec. 60-1.20(a)(4), “Focused review. An on-site review restricted to one or more components of the contractor‘s organization or one or more aspects of the contractor‘s employment practices.”

 

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