OFCCP Sends Out Pre-Scheduling Notices

It appears that OFCCP is gearing up for the next set of compliance reviews. We have several clients who have received pre-scheduling notices advising them that they will be undergoing review soon. The pre-scheduling notices we've seen were directed to the specific facility that will be undergoing a review and not to a corporate headquarters location. Federal contractors and subcontractors should be on the lookout for these letters.

This will be an unusual cycle of reviews because of the level of uncertainty at OFCCP over various initiatives (including the proposed veterans and disability regulations) and because of OFCCP's desire to look more extensively into compensation issues.  As noted in a previous post, OFCCP is scheduled to unveil the final version of its revised regulations for veterans and persons with disabilities in April (though we do not believe this is likely to happen).  More importantly, this round of reviews will be the first round under OFCCP's new compensation directive.

It's interesting that OFCCP is sending out pre-scheduling notices to individual facilities.  For several years, OFCCP had issued letters to certain multi-facility employers advising them that one or more facilities would be undergoing an affirmative action compliance review. These letters, called Corporate Scheduling Announcement Letters (CSALs), were generally sent twice a year. While their use had been somewhat unpredictable, CSALs were very helpful to large organizations that could use the CSAL list to plan for compliance reviews.  We'll have to watch to see if OFCCP uses only the single facility pre-scheduling notices during this round of reviews or if there will be traditional CSALs sent to corporate headquarters that provide a list of facilities that will undergo review.

It is worth noting that the current round of pre-scheduling notices, like the CSALs OFCCP had been using, are NOT formal letters opening compliance reviews (i.e. "scheduling letters"). These pre-scheduling notices are just a notification of a likely review. In past years, we've had the following scenarios occur:

• Clients have received a formal scheduling letter within days of receiving a pre-scheduling notice
• Clients have received a formal scheduling letter months after receiving a pre-scheduling notice
• Clients failed to receive a scheduling letter even though they were on a CSAL list suggesting there would be a compliance review

Thus, while the pre-scheduling notice is a useful warning, it doesn't necessarily provide a specific timeline for review.  What the pre-scheduling notice does is put a company on notice that a review is likely to occur.  We encourage any company that receives a pre-scheduling notice to begin preparations for an OFCCP compliance review as soon as possible.  If you need assistance in preparing for a review, please contact us.

When Will We See New Regulations for Veterans and Persons with Disabilities?

In April of 2011, OFCCP released proposed changes to its regulations regarding veterans.  Later that year, in December, OFCCP released proposed changes to its regulations regarding persons with disabilities.  Each set of proposed changes has significant revisions to the current affirmative action regulations for these groups.  OFCCP had hoped to publish these regulations in final form during 2012, but this did not occur.

The Department of Labor (DoL) in its regulatory agenda published in December of 2012 stated that OFCCP's new regulations regarding veterans and persons with disabilities would be released in final form in April of 2013.  We believe that DoL is not going to meet this timeframe.  Among the reasons we believe these regulations will be further delayed are the following:

• The Department of Labor is going to be hesitant to publish extensive new regulations while a new Secretary of Labor is being confirmed and is starting in the position.  Hearings have not yet begun for the Obama administration's nominee for Secretary of Labor, Thomas Perez, and these hearings may be contentious because of positions Mr. Perez took while at the Department of Justice.
• OFCCP already has too many regulatory initiatives on its plate.  Most notably, the agency just released a new directive regarding compensation that will require extensive training for OFCCP compliance officers and extensive oversight from OFCCP officials.
• The Office of Management and Budget (OMB) may have concerns over the costs and burdens that would be imposed under OFCCP's proposed changes to its regulations.  Federal contractors and their representatives have made it very clear to OMB that OFCCP grossly underestimated the cost both in terms of dollars and time that would be required to implement the proposed changes.

At this point, any guess on when revised regulations regarding veterans and persons with disabilities will appear is simply speculation.  Revised regulations may appear later in the year, sometime in 2014, or never.  Even if revised regulations do appear, they may take a significantly different form than the regulations proposed by OFCCP in 2011.

The proposed regulations and the DoL's December 2012 regulatory agenda can be found on the documents page on our website.  Our thoughts on the proposed regulations can also be found on our website as part of our "older news" page.

Thoughts on OFCCP's New Compensation Directive

We’ve now had some time to digest the compensation directive that OFCCP released on February 28, 2013. We’re going to use this blog post to provide some background and analysis regarding the new directive.

Background

On February 28, OFCCP released its Directive 307, entitled “Procedures for Reviewing Contractor Compensation Systems and Practices.” At the same time, OFCCP finalized the rescission of the compensation guidelines that had been issued in 2006. (All of these documents are available on our website at http://www.hranalytical.com/documents.html.) OFCCP decided to rescind its previous compensation guidelines and introduce Directive 307 in order to give itself additional flexibility to assess compensation issues. Under Directive 307, OFCCP compliance officers are instructed to give scrutiny to any potential disparities in employee pay. The directive makes it clear that there is no single way that compliance officers are required to investigate possible compensation discrimination. This is a departure from OFCCP’s previous compensation guidelines, which suggested that the agency and federal contractors should use multiple regression analyses and other statistical tools to identify compensation disparities.

Contractors Likely to Be Required to Use New EEO Census Data Starting in January 2014

While OFCCP has so far issued no formal announcement, agency representatives have begun to suggest that federal contractors and subcontractors will be required to use the new EEO census data now available from the Census Bureau in affirmative action plans completed after December of 2013.  This new EEO data will take the place of the 2000 census data that has been used in affirmative action plans for the last ten years.

The new EEO data is significantly different from the 2000 EEO data in a number of ways. Following the 2000 census survey, the Census Bureau released an EEO file that contained demographic data by race, ethnicity, and gender on the jobs held by American workers. The EEO data released in January of 2013 also contains demographic data by race, ethnicity, and gender on jobs. However, the new EEO data is NOT based on the 2010 census survey.  Instead, it is a composite of surveys conducted as part of the on-going American Community Survey (ACS). The ACS is a survey conducted every year that samples a certain percentage of the population about a variety of factors including education, employment, income, language, and race.

Another change from the past involves the manner in which the EEO data has been made available to the public.  Data from the 2000 census were made available on the web with a data tool to help users easily access information for various geographical areas and populations. The new EEO data is available on the web and there is extensive additional information beyond that provided with the 2000 census files. However, there is no data tool similar to that made available for the 2000 EEO data. While the new EEO data is also available for download from an FTP site, the FTP site will typically be used by organizations that have extensive experience using database tools to manipulate very large data files. The files available from the FTP site cannot be read by common business applications such as Excel.

As we noted in a previous blog post, federal contractors and subcontractors attempting to use the new EEO data themselves may experience a number of logistical and other problems.  OFCCP may have recognized the issues concerning the new EEO data by moving the target date for using this new EEO data to January of 2014.

Obama Administration Announces Nominee for Secretary of Labor

On March 18, 2013, the Obama administration announced that Thomas Perez will be nominated for the vacant Secretary of Labor post.  Mr. Perez is currently the head of the Civil Rights Division at the Justice Department.  If confirmed, he will replace Hilda Solis, who left the Department of Labor in January of 2013.

Mr. Perez must go through a confirmation process in the Senate before assuming the Secretary of Labor position.  Various news reports suggest that there may be opposition to his nomination because of his strong positions on a number of civil rights issues while at the Department of Justice.  Mr. Perez has pursued various discrimination actions throughout his career, first as a federal prosector and later as a leader in the civil rights sections of several different cabinet level departments.

There is currently no timing on when Mr. Perez's confirmation hearings will take place.  It is also currently unknown how Mr. Perez's appointment will affect various agencies within the Department of Labor (DoL) such as the Office of Federal Contract Compliance Programs (OFCCP).  OFCCP head Patricia Shiu has made no announcements concerning her future plans, but her continuing tenure in the agency will depend in part on decisions the new Secretary of Labor makes about the direction of OFCCP and other DoL agencies. 

EEOC Publishes Notice of Intent to Survey Applicants Interested in Federal Jobs for Disability Status

On February 15, 2013, the Equal Employment Opportunity Commission (EEOC) published a notice of its intent to change the survey form used to collect demographic information from persons expressing interest in positions with the federal government.  The form would be revised to include questions concerning disabilities that applicants may have.  Currently, the form only includes questions concerning gender, ethnicity, and race.

The proposed revisions to the survey form do NOT affect federal contractors or other private sector employers.  Instead, these proposed revisions are meant to help the federal government determine whether it is meeting its objectives in regard to hiring persons with disabilities for positions with the federal government.  The proposed revisions to the survey form do not simply ask whether an individual is a person with a disability, but instead ask specific questions about particular types of disabilities as well as questions concerning particular conditions an applicant may have.

While the proposed revisions to the survey form do not apply to private sector employers, these revisions are consistent with the federal government's desire to provide greater access to employment for persons with disabilities.  The requirement to survey applicants for disability status is one part of the proposed regulations issued by the Office of Federal Contract Compliance Programs (OFCCP) in December of 2011.  These proposed regulations have not been finalized by OFCCP, and concerns have been raised about a number of the changes found in the proposed regulations including this requirement to survey applicants concerning disability.  EEOC currently suggests that no disability survey should be conducted for applicants until the post-offer stage of the employment process.  It is possible that the proposed survey released on February 15 is an indication that EEOC may be changing its position in this regard.

The EEOC's notice can be found at the federal government's website showing all proposed regulations or at the Federal Register website.  OFCCP's proposed revisions to its regulations regarding disability can be found on the documents page of the HR Analytical Services website.