Where Do We Stand?

The current picture in regard to what’s happening at OFCCP seems to grow murkier all the time.　During 2012, we noticed multiple changes in approach and behavior from the agency.　We also noticed multiple changes in emphasis during affirmative action compliance reviews.　We’d like to use this article to share what we believe is happening at OFCCP, and provide you with an update on the status of several of the agency’s major initiatives.

During 2011, OFCCP released a number of proposals that would have fundamentally changed the agency’s expectations for federal contractors and subcontractors.　These proposals included the following:

Proposed Revisions to Regulations Regarding Veterans - OFCCP has proposed a number of dramatic changes to their regulations regarding veterans.　 Among these proposed changes are requirements to:

• survey applicants for veteran status
• establish "linkage agreements" with multiple veterans recruitment sources
• establish some form of placement goals for veterans, and
• collect five (5) years of data regarding the recruitment of veterans.　

One of our least favorite items in these proposed regulations is a requirement to train all employees on the value of veterans.　 While the commentary period on these proposals is long closed, OFCCP still has not issued revised veterans regulations in final form.　OFCCP’s latest regulatory agenda from December of 2012 suggests that the agency will finalize these regulations in April of 2013, but we’re not convinced this will occur.

Proposed Revisions to Regulations Regarding Persons with Disabilities - OFCCP has also proposed a number of dramatic changes to their regulations regarding persons with disabilities, some of which paralleled the proposed revisions to the veterans regulations.　 Among the proposed changes for persons with disabilities are requirements to:

• ensure that at least 7% of all employees in each affirmative action job group are persons with disabilities
• survey applicants for status as a person with a disability, annually re-survey the entire employee population regarding status as a person with a disability
• keep extensive records about accommodations made, and
• collect five (5) years of data regarding the recruitment of persons with disabilities.　

As with the veterans regulations, the commentary period on these proposals is long closed, OFCCP has not issued revised regulations regarding persons with disabilities in final form, and OFCCP’s latest regulatory agenda suggests that the agency will finalize these regulations in April of 2013.

Proposed Revisions to "Scheduling Letter" and Itemized Listing - OFCCP has proposed major changes to the itemized listing that accompanies the letter sent to companies at the start of an affirmative action compliance review.　(This letter is referred to as a "scheduling letter.") Among the proposed changes are requirements to provide:

• extensive and individualized compensation-related data on employees at the start of a review
• personnel activity data by both job group AND job title
• statistical analyses of the pools of employees considered for termination or promotion, and
• numerous policies on subjects such as FMLA leave and accommodation for religious observances.　

These proposed revisions are in the same limbo as the proposals regarding veterans and persons with disabilities described above.　OFCCP has been extending the current version of its scheduling letter and itemized listing every month since September of 2011 with the expectation that the Office of Management and Budget (OMB) will approve the proposed revisions at any time.　However, OMB has not yet acquiesced to OFCCP’s proposals.

Along with these formal proposals, OFCCP has indicated for the last several years that it intends to revise its regulations regarding construction contractors and sex discrimination, and that it intends to issue new guidance in regard to the manner in which federal contractors and subcontractors should evaluate compensation.　In fact, the latest regulatory agenda suggests that in June of 2013 OFCCP will be releasing a proposed version of a tool that it intends to use to evaluate compensation.　 While OFCCP first issued a notice in January of 2011 of its intent to withdraw its 2006 compensation guidance, that guidance has not yet been formally withdrawn.

So, what’s going on with all these proposals?　While no one has a definitive answer to this question, we have some thoughts.

• OFCCP has been unable to demonstrate to the Office of Management and Budget that its proposals from 2011 are reasonable and appropriate.
• OFCCP was unable to move any of its major initiatives forward during a contentious election year.
• OFCCP has too many initiatives and hasn’t been able to focus on moving any particular initiative forward.

This will all be further complicated for OFCCP during 2013 by two facts.  First, the agency will face increasing pressure on its budget as Congress and the White House continue to struggle with federal deficits and spending.  Second, the resignation of Secretary of Labor Hilda Solis means uncertainty for OFCCP head Patricia Shiu and for the agency’s ability to move forward with any major new actions.

This does NOT mean that OFCCP will be dormant during 2013.  In fact, we expect the agency to actively pursue a number of the focus areas that have been important to OFCCP during the last few years.　Even without new regulations or official guidance, OFCCP will continue to focus on issues concerning compensation, veterans, and persons with disabilities.　OFCCP will also continue to look for situations where statistics suggest there appears to have been discrimination in regard to the hire of some class of applicants.　 OFCCP will continue to request documentation regarding outreach efforts made to find qualified minorities, females, veterans, and persons with disabilities.

The real question is "HOW will OFCCP pursue its various focus areas?"  2012 started off with the agency conducting intensive reviews of companies.  These reviews frequently included on-site visits, lengthy questionnaires about employment practices and decisions, and requests for extensive documentation of outreach.  However, as the year continued, we saw the agency retreat from these intensive reviews into a mode that much more resembled what was occurring in the middle of the last decade.  OFCCP still asked questions about subjects of more recent interest such as outreach, veterans, and persons with disabilities, but there were far fewer on-sites and far fewer laundry lists of requested information.  More importantly, OFCCP began to shift back to reviewing issues involving hiring, especially where there was statistical evidence of possible discrimination.

Today, we’re not sure what an OFCCP review will bring.  There may or may not be an on-site.　There may or may not be requests for information about compensation.  There may or may not be demands for documentation of outreach and accommodation for veterans and persons with disabilities.  There may or may not be interest in promotions or terminations.  There probably will be questions about hiring when statistical reports suggest discrimination against a particular race or gender, but there may or may not be in-depth analysis of these issues.

The best thing that we can do is stay prepared.  2013 will certainly bring more change.  We simply need to accept the idea that there will be uncertainty connected to any OFCCP review and make sure that we are as ready as possible for questions that may come.

Did You Know…that the number of conciliation agreements issued by OFCCP rose dramatically in the last few years?　 Many federal contractors and subcontractors were unprepared for the new types of questions OFCCP asked, and they are now locked into agreements that require them to report for one or more years on outreach efforts, changes to record-keeping, and other matters.　We’re pleased to report that during 2012, none of our clients were required to enter into a conciliation agreement.　Understanding OFCCP and the many changes going on at the agency has been critical in helping our clients prepare effectively for reviews.

For more information on where we think OFCCP is going and where their various proposals stand, feel free to contact us.

Please note: Nothing in this article is intended as legal advice or as a substitute for any professional advice about your organization's particular circumstances. All original materials copyright HR Analytical Services Inc. 2013