As of December 2021, President Biden has signed 75 Executive Orders. Two of them, outlined below, are of particular importance to federal contractors.
Under Director Yang the OFCCP spent 2021 rescinding several of the prior administration’s Affirmative Action initiatives. This blog details some of the effects these changes are having on contractors’ Affirmative Action programs.
Director Yang has also outlined, in very general terms, possible future changes in OFCCP practice. These could constitute the biggest update to Affirmative Action practice in years. See Circa’s upcoming blog, ‘The OFCCP in 2022 – What’s in Store?’ for what the changes might entail.
President Biden’s Executive Orders
Executive Order (EO)14026 sets the minimum wage at $15.00 per hour for the employees of federal contractors working in connection with certain federal contracts. The requirement pertains primarily for contracts entered into after January 30, 2022. See the final regulations for detail.
EO 14042 requires federal contractors – and the subcontractors who perform work necessary for the performance of a federal contract – to, among other things, impose vaccination and mask requirements and to undertake a ‘reasonable accommodation’ review for seeking exemption from the mandate. See the Safer Federal Workforce FAQ for required contract language and information on these requirements. See your daily paper for the status of litigation seeking to block them.
Clearing the Deck
Not surprisingly, when a new administration comes into place, its first actions are often to cancel or modify many of the prior administration’s initiatives. This is certainly true of the OFCCP in 2021;
- The day President Biden was sworn in he rescinded President Trump’s EO 13950, entitled ‘Combatting Race and Sex Stereotyping’. Courts had already temporarily blocked the EO on legal grounds (some argued it was overbroad and an impermissible limitation on free speech). Many saw the EO as an attempt to dampen the social equity movement arising after the 2020 death of George Floyd and others. The four-month rise and fall of EO 13950 underscores how easily Executive Orders, created with the stroke of one President’s pen, can be rescinded by the pen of the next president.
- In March 2021, the OFCCP removed the 1,750 Section 503 and VEVRAA Focused Reviews and compliance checks that had been noted on the 2020 Supply and Service program’s Corporate Scheduling Announcement List (CSAL). (The CSAL provides pre-notice of audits). The Agency stated it was doing away with these short audits to “allocate its resources on comprehensive compliance evaluations”, i.e., to focus on full, ‘scheduling letter’ compliance reviews. The jury is out on whether this means the OFCCP has given up on the shorter reviews. Information on them is still on the OFCCP’s website. Contractors have noted that audits are taking longer to close in 2021 than in 2020. Is this because the OFCCP intends to make every review a “comprehensive” exploration of possible discrimination?In addition to taking the shorter reviews off the scheduling list, the 2021 CSAL noted only 750 new establishment reviews for 2021. (The prior administration’s 2019 CSAL noted 4,000 compliance reviews.) Are audits slowing because Compliance are taking a ‘deep dive’ into the few audits in queue?
- In September 2021, the OFCCP announced that it will review whether to use information collected under the EEO-1 Component 2 pay data reporting requirement. The prior administration had said that OFCCP would not use the data because it is so ‘’aggregated” (high level) that is “too broad to provide much utility”.Using the data for enforcement, as OFCCP now says it may, would be very controversial. (See Circa’s blog on Component 2.) However, this would be far from the Agency’s only controversial stand on compensation review. As an example, in 2021 more and more contractors reported that the OFCCP was analyzing pay by comparing the compensation of all employees in an EEO-1 job category.Few if any federal contractors align employees using EEO-1 job categories when setting or reviewing pay. The categories do not commonly, as Title VII requires, group ‘similarly situated’ employees, that is, employees who share similar job tasks and responsibilities.Let’s hope that the Agency’s willingness to consider using Component 2 pay data is not an omen of trouble to come.
- Is ‘transparency’ in OFCCP practice a thing of the past? The jury is out.The promise that the OFCCP will be open and communicative during audit is the creation of Director Yang’s Republican predecessor, Director Leen. Transparency requirements are outlined in Directive 2018-08 and ‘Predetermination Notice Rule’ (PDN) changes to OFCCP’s race and gender, disability, and veterans regulations (41 CFR Parts 60-1, 60-2, 60-300 60-741). Transparency requires, among other things, that Compliance Officers stay in close contact with contractors during the course of an audit and provide justification for information requests.Employers under audit are finding that some OFCCP personnel ignore the transparency requirements. Fortunately, the OFCCP’s Regional Directors, maintain that the requirements are alive and well. However, in June 2021, the OFCCP stated that it intends to make changes to the Supply and Service regulations and the PDN rule, the latter of which codifies transparency. Does this mean that transparency will be a thing of the past?If 2021 was the year in which OFCCP ‘cleared the deck,’ what comes next? We will address this in Circa’s upcoming Blog ‘The OFCCP in 2022 – What’s in Store?.’
Paul McGovern
Managing Partner
Praxis Compliance
