Dealing with the Chaos at OFCCP

This article originally appeared in the July 2014 edition of the LocalJobNetwork "OFCCP Digest."

The U.S. Department of Labor’s Office of Federal Contract Compliance Programs is a busy place. The agency has announced a multitude of priorities that affect federal contractors and subcontractors. Among these priorities are the following:

• Issues concerning veterans
• Issues concerning individuals with disabilities
• Compensation
• Use of criminal records in the selection process

There were new regulations or directives issued on each of these subjects during 2013.

President Obama Signs Executive Order Incorporating Protections Against Discrimination Based on Sexual Orientation or Gender Identity into Executive Order 11246

On Monday, July 21, President Obama signed an executive order that makes changes to Executive Order 11246. Executive Order 11246 is the executive order that prohibits discrimination by federal contractors or subcontractors against applicants and employees based on race, color, religion, sex, or national origin. Executive Order 11246 is also the executive order that provides the basis for the federal regulations requiring that federal contractors and subcontractors take affirmative action to recruit, employ, promote, and retain minorities and females.

The executive order signed by President Obama on Monday incorporates protections for applicants and employees based on sexual orientation and gender identity. The White House decided to amend Executive Order 11246 to protect members of the lesbian, gay, bisexual, and transgender (LGBT) community after the United States Congress failed to take action on a law to provide broader protections for members of these groups. While certain states and municipalities have protections for members of the LGBT community, there were no non-discrimination provisions for these groups in federal law.

The executive order signed by the President instructs the Secretary of Labor to prepare regulations that will implement the amendments to Executive Order 11246. The non-discrimination provisions of the new executive order will apply to contracts entered into on or after the effective date of the rules promulgated by the Department of Labor. Thus, there are no specific actions federal contractors and subcontractors currently need to take to deal with these revisions. However, companies should monitor the federal rule-making process to determine when new rules about sexual orientation and gender identity become effective.

Along with changes to Executive Order 11246, the executive order signed on Monday makes changes to Executive Order 11478, which prohibits discrimination against federal employees on the basis of race, color, religion, sex, national origin, disability, or age. Executive Order 11478 was revised in 1998 to prohibit discrimination against federal employees based on sexual orientation. This executive order does not affect federal contractors or subcontractors or other private sector employers. The executive order signed on Monday is available at http://www.whitehouse.gov/the-press-office/2014/07/21/executive-order-further-amendments-executive-order-11478-equal-employmen. A fact sheet discussing the executive order and the reasons for the revisions to Executive Order 11246 is available at http://www.whitehouse.gov/the-press-office/2014/07/21/fact-sheet-taking-action-support-lgbt-workplace-equality-good-business-0.

New Round of Pre-Scheduling Notices Being Sent to Federal Contractors and Subcontractors

OFCCP is currently sending out pre-scheduling notices to inform companies that a facility may be the subject of an up-coming affirmative action compliance review.  These letters are dated July 16, 2014.  As has been the case during the past few years, OFCCP is sending these letters to individual locations that may be the subject of a review.  Both single-facility organizations and multi-facility organizations may receive a pre-scheduling notice.  When these types of letters were first used by OFCCP in 2007, they were called Corporate Scheduling Announcement Letters (CSALs) and were sent to the corporate headquarters for organizations that had been scheduled for more than one compliance review that year.  Now, there is no specific correspondence sent to a corporate headquarters unless the corporate headquarters itself is the subject of a review.

The current round of pre-scheduling notices are slightly different than the last set of pre-scheduling notices sent by OFCCP in February or March of 2014 in that the current set of notices includes a reference to the corporate parent for the facility receiving the letter.  This is true even if there are no other facilities for that company (in which case the name of the facility receiving the letter will be the same as the name of the corporate parent).  It appears that OFCCP is deriving the name of the corporate parent from EEO-1 reports
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It is important to note that a pre-scheduling notice does NOT formally open a compliance review.  The pre-scheduling notice is simply an informational letter notifying a facility that OFCCP expects to conduct a compliance review there.  The formal scheduling letter that opens a compliance review may be sent at any time following the receipt of the pre-scheduling notice.  (In fact, we are aware of several instances during 2013 where a company received a scheduling letter and then subsequently received a pre-scheduling notice.) While most facilities that receive a pre-scheduling notice will ultimately receive a scheduling letter and will begin a compliance review, it is possible that there will be facilities receiving a pre-scheduling notice that do not receive a scheduling letter.  However, all companies receiving a pre-scheduling notice should assume that a compliance review will be occurring soon and should plan accordingly.

More information on OFCCP’s use of CSALs can be found on the agency’s website at http://www.dol.gov/ofccp/regs/compliance/faqs/csalfaqs.htm.

Filing Period Open for EEO-1 Report

As of July 1, companies have been allowed to file their EEO-1 reports for 2014.  The filing period remains open until September 30.  EEO-1 reports can be important, as a number of federal agencies, including OFCCP and EEOC, examine EEO-1 reports when they conduct investigations, and private citizens can ask for EEO-1 data as part of a Freedom of Information Act request.  OFCCP also uses EEO-1 reports as one factor in determining which companies and facilities it will target for affirmative action reviews.  Thus, you should carefully consider how employees are reported.  For example, if your company has a number of small facilities that have typically been rolled up into one location on the EEO-1 report, you should consider reporting these employees in their separate facilities.  While OFCCP has the right to review any of a federal contractor’s facilities, it is rare for the agency to conduct a full compliance review at a facility of less than 50 people.

OFCCP’s Revised Veterans and Disability Regulations: The Affirmative Action (“Subpart C”) Requirements

This article originally appeared in the July 2014 edition of the LocalJobNetwork "OFCCP Digest."

As we approach the summer months, companies are continuing to implement the revised regulations issued by the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) in regard to protected veterans and individuals with disabilities. By now, federal contractors and subcontractors should have implemented the items that were to have been in place by March 24, 2014. There are various other requirements in the affirmative action portions of the revised regulations that companies should now be considering.  

Surveying Requirements Under the Revised Veterans and Disability Regulations

This article originally appeared in the March 2014 edition of the LocalJobNetwork "OFCCP Digest."

The revised regulations issued by the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) in regard to protected veterans and individuals with disabilities are now in effect. Companies were required to implement some of the items in these revised regulations by March 24, 2014. There are other requirements in the revised regulations that must be implemented when companies next update their affirmative action plans for veterans and individuals with disabilities.

One of the most important set of changes in the revised regulations are the changes regarding surveying. There are major revisions that federal contractors and subcontractors must make to the way they survey applicants and employees for information on veteran and disability status. While companies may make these changes on or after March 24, 2014, they MUST make some of these changes no later than the date that AAPs are next updated.

Preparing for the Revised Veterans and Disability Regulations

This article originally appeared in the February 2014 edition of the LocalJobNetwork "OFCCP Digest."

Federal contractors and subcontractors continue to prepare to implement the revised regulations regarding protected veterans and individuals with disabilities that were issued by the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP). There are certain provisions in these revised regulations that must be implemented by March 24, 2014. I discussed these provisions my January 2014 article for the OFCCP Digest.

On Friday, February 14, OFCCP provided new information regarding some of the March 24 requirements via a series of answers to frequently asked questions (FAQs). These new FAQs have important ramifications regarding certain actions that federal contractors and subcontractors should take.

Preparing for the Revised Veterans and Disability Regulations - What’s Due on March 24

This article originally appeared in the January 2014 edition of the LocalJobNetwork "OFCCP Digest."

Federal contractors and subcontractors across the United States are preparing to implement revised regulations issued by the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) in regard to protected veterans and individuals with disabilities. These revised regulations were issued on September 24, 2013. Some of the requirements in these revised regulations must be implemented by March 24, 2014, while other requirements must be implemented when companies next update their affirmative action plans for veterans and individuals with disabilities.

In this article, we’re going to focus on the provisions in the revised regulations that must be implemented by March 24. While these provisions may not be the most onerous in the revised regulations, they do not have the kind of flexibility in regard to implementation date that is associated with other portions of the revised regulations.

OFCCP Sends Survey Form for Individuals with Disabilities to OMB

OFCCP’s revised regulations regarding individuals with disabilities state that the agency will provide the survey form that federal contractors and subcontractors are to use to survey individuals with disabilities. That form has now been sent to the Office of Management and Budget (OMB) for review. The form can be found at http://www.reginfo.gov/public/do/PRAICList?ref_nbr=201307-1250-001. (Click on the "Voluntary Self-Identification of Disability" to open the actual form.)  OMB must approve this form before OFCCP can require its use by federal contractors and subcontractors. Once approved by OMB, companies will be required to use this specific form to survey individuals with disabilities.

It appears that the survey form currently available at OMB’s website would be used to survey both applicants and employees. The requirement to survey applicants is a new requirement under the revised regulations. Companies will need to start using OFCCP’s prescribed survey form either on March 24, 2014 or at the time that affirmative action plans (AAPs) are being updated after that date. For example, a company that has an affirmative action plan for individuals with disabilities that is updated each year in January would begin using OFCCP’s prescribed form on January 1, 2015.

The version of the survey form currently at OMB has no place for the name of an applicant or employee. OFCCP Director Patricia Shiu was asked about this on October 18 when she appeared at the National Employment Law Institute’s affirmative action briefing in Washington, DC. Ms. Shiu and OFCCP Policy Division Branch Chief Naomi Levin responded that they expected companies would associate the name of an applicant or employee with the form. Ms. Shiu and Ms. Levin also indicated that the form is still under review by OMB and may undergo changes before it is released for use by federal contractors and subcontractors.

The current version of the form appears to have another item that will need to be modified before its final release. While the form states that companies “are required to invite...employees to self-identify each year,” the revised regulations actually require companies to conduct a survey of the entire workforce every five years. Companies must conduct an initial re-survey within one year of the time that the regulations become effective or their affirmative action plans are updated.

Patricia Shui Appears at NELI conference

OFCCP head Patricia Shiu made an appearance on Friday at the National Employment Law Institute conference in Washington DC.  She took questions in a variety of topics, including the survey form for persons with disabilities that was recently released to the Office of Management and Budget (OMB).  She indicated that the form, which does not include a place for applicant or employee name, should, in fact, be tied to individual applicants and employees.

OFCCP Makes Scheduling Announcement List Available and Then Withdraws List

At the 2012 National Industry Liaison Group (NILG) conference in Hawaii, OFCCP announced that it would be making its scheduling announcement list publically available on its website as a service to federal contractors.  The scheduling announcement list is the list of companies that would be received a pre-scheduling notice from OFCCP informing these companies that they would be subject to an affirmative action compliance review.  These pre-scheduling notices (formally called a corporate scheduling announcement letter or CSAL) are NOT the letter actually opening a review.  Instead, they are, in OFCCP's words, a "courtesy notification" of an impending review.  (For more information on CSALs, see our earlier blog post on this subject.)

On Thursday, July 18, 2013, OFCCP made a portion of the 2012-13 scheduling announcement list publically available on its website.  The list could be viewed at http://www.dol.gov/ofccp/regs/compliance/SAL/SAL_MidAtlantic.htm. By the next day, however, the list had my disappeared from the website.  At the 2013 NILG conference in Indianapolis, which occurred at the end of July, OFCCP explained that the scheduling announcement list had been posted in error and that the agency had not intended for the list to be publically released.  OFCCP has made no further commitments to making its scheduling announcement list available on its website.

Reaction from federal contractors and subcontractors to having the scheduling announcement list posted on the OFCCP website has been mixed.  Some large contractors were looking forward to having one source to review in order to determine how many establishments would be undergoing a compliance review.  OFCCP no longer sends a unified listing of all establishments at a company that will be undergoing review to a corporate headquarters office, instead sending the pre-scheduling notice directly to the establishment that will be undergoing review.  This has been a problem for certain larger organizations.  However, some contractors, both large and small, have been troubled by the idea of having the names of establishments to be reviewed released to the general public.

VETS Encounters Technical Difficulties with System Used to File VETS-100/100A Report

It appears that the Veterans Employment and Training Service (VETS) is once again having problems with the on-line system used to file the annual VETS-100 and VETS-100A reports. This has been something of an annual issue and it’s not clear why VETS can’t seem to develop a system that allows for the effective filing of these reports. However, for the moment, companies will need to wait to file for 2013.

Federal contractors and subcontractors are required to file the VETS-100 and/or VETS-100A report in the third quarter of each year. We believe that almost without exception companies should be filing the VETS-100A report rather than the VETS-100 report, as the VETS-100 report is only used by companies that have unmodified federal contracts from earlier than December of 2003. A very small number of companies have contracts which are that old, and almost all (if not all) of these contracts have been modified in some way. Thus, companies should be filing the VETS-100A report.

OFCCP is routinely asking for copies of the latest VETS-100 or 100A filings during compliance reviews, and thus it is important to file the report.  It's simply not clear when companies will be able to do so for 2013.  VETS notice about the VETS-100/100A filing says "We are currently experiencing technical difficulties with the VETS 100/100A filing systems and we are not able to receive filings at the present time. We hope to have these system issues resolved shortly and appreciate your patience."

OFCCP Sends Final Version of Regulations Regarding Persons with Disabilities to OMB

OFCCP has been busy this week.

On Wednesday, July 31, OFCCP sent the final version of the agency's proposed revisions to its regulations regarding persons with disabilities to the Office of Management and Budget (OMB).  This follows OFCCP's submission of the final version of its proposed revisions to the veterans regulations on July 30.  As with the veterans regulations, approval by OMB is the final step before the revisions to the regulations regarding persons with disabilities would become effective.

OFCCP first published its proposed revisions to the regulations regarding persons with disabilities in December of 2011.  While there were many comments from the public concerning the proposed veterans regulations, there were even more concerning the disability regulations, including a very substantial number of concerns raised by federal contractors and subcontractors and their representatives.  OFCCP had taken no formal action on the proposed revisions to the regulations regarding persons with disabilities until submitting the final version of its revisions on July 31.

In our related post on the veterans regulations, we noted that there has been much speculation as to why there was such a delay in providing a final version of the regulations to OMB.  Regardless of what was preventing OFCCP from submitting final regulations previously, the agency has acted in a dramatic fashion in the last few days.

As we noted in our post on the veterans regulations, it is not clear when OMB will act on OFCCP's submission of its final revisions to the regulations regarding persons with disabilities.  The public comments regarding these regulations raised many important concerns and OMB will have much to consider before deciding whether to approve these regulations.  Whether the revised regulations receive approval from OMB may depend in part on changes that OFCCP has made to its initial submission.

Documentation of OMB's receipt of the final regulations regarding persons with disabilities can be found on the reginfo.gov website http://www.reginfo.gov/public/do/eoDetails?rrid=123245. Unfortunately, there is no formal way to view the final version of the revised regulations until OMB makes a decision about these regulations or until OFCCP decides to release them to the public.

OFCCP Sends Final Version of Veterans Regulations to OMB

On Tuesday, July 30, OFCCP sent the final version of the agency's proposed revisions to its regulations regarding veterans to the Office of Management and Budget (OMB).  Approval by OMB is the final step before the revisions to the veterans regulations would become effective.

OFCCP first published its proposed revisions to the veterans regulations in April of 2011.  There were an extensive number of comments about the proposed revisions, including a substantial number of concerns raised by federal contractors and subcontractors and their representatives.  OFCCP had taken no formal action on the proposed revisions to the regulations until submitting the final version of its revisions on July 30.

There has been much speculation as to why there was such a delay in providing a final version of the regulations to OMB.  As we've noted on this blog, part of the delay may involve the fact that both OMB and the Department of Labor were without heads of their respective agencies until recently.  In fact, it only took 12 days from the time that Thomas Perez was confirmed as the new Secretary of Labor until OFCCP sent its final revisions to OMB.

It is not clear when OMB will act on OFCCP's submission.  OMB has the right to approve the final regulations as submitted, to deny approval if the regulations do not meet the requirements of the Paperwork Reduction Act or other laws, or to request revisions from OFCCP before approval.  While some commentators have speculated that the revised regulations may be approved some time in August, others have suggested that it may be later this year before these regulations are approved, if they are approved at all.

Documentation of OMB's receipt of the final regulations can be found on the reginfo.gov website at http://www.reginfo.gov/public/do/eoDetails?rrid=123242.  Unfortunately, there is no formal way to view the final version of the revised regulations until OMB makes a decision about these regulations or until OFCCP decides to release them to the public.

Perez Confirmed as Secretary of Labor

After months of waiting, and after some tense moments over whether the Democrats in the Senate would fundamentally change the rules of the Senate, Thomas Perez was confirmed as new Secretary of Labor on July 18, 2013.  Senate Republicans had been blocking Mr. Perez's confirmation since May, but his nomination finally was approved after both parties agreed to proceed to a vote on a number of controversial nominations.  Senate Democrats had threatened to implement the "nuclear option" in regard to presidential appointments by changing senate rules to thwart any possible filibuster on such nominations, but a compromise was reached at the last second, and a number of President Obama's appointees, including Mr. Perez, were approved during the week of July 15.

Mr. Perez faces a number of challenges upon joining the Department of Labor.  The Office of Federal Contract Compliance Programs (OFCCP) and other DoL agencies have a variety of controversial proposals that are waiting for final publication.  Among the proposed rules awaiting action are OFCCP's proposed revisions to the regulations regarding veterans and persons with disabilities.  When (or if) these proposals will see the light of day remains unknown.  Mr. Perez also needs to determine whether there will be any changes in the leadership team at DoL.  While nothing has been said in this regard, Mr. Perez appears to have a strong relationship with OFCCP head Patricia Shiu, and we expect she will continue in her role at OFCCP.

How to Set Priorities for an OFCCP Review

This article originally appeared in the May 2013 edition of the LocalJobNetwork "OFCCP Digest." It is the first of a two-part series.

Part 1 - Understanding How OFCCP’s Focus Areas Affect Setting Priorities

This article is the first of a two-part series. In this article, we’ll provide some general information on how to set priorities in preparation for an OFCCP review. In the follow-up article, we’ll discuss a number of specific items that should be priorities for all federal contractors and subcontractors.

The letter from the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) that opens an affirmative action compliance review sends many companies into a panic. There is concern over what must be submitted and when, how to prepare for questions that may occur, and how to deal with unexpected inquiries that may be part of the review. Many of these issues can be dealt with prior to the time a review actually begins if a company gives priority to the items that may be most important during a compliance review.

No News on OFCCP Proposed Changes to Regulations Regarding Veterans and Persons with Disabilities

In April of 2011, OFCCP published proposed revisions to its regulations regarding veterans.  In December of 2011, the agency published proposed revisions to its regulations regarding persons with disabilities, many of which paralleled the proposals regarding veterans.  While OFCCP has announced various dates when it expected to publish final versions of these regulations, these dates have come and gone without a release of the new regulations.

In its regulatory agenda from December of 2012, the Department of Labor indicated that OFCCP's proposals regarding veterans and persons with disabilities would be issued in final form in June of 2013.  As we have now reached the end of June, it seems unlikely OFCCP is going to make this timeframe.  Whether we will ever see a final version of these revised regulations remains up in the air.  Some people have speculated that these regulations may be issued in fall, while others have suggested that we may see the regulations towards the end of the year.  Frankly, we're not entirely convinced a final version of these regulations will ever make an appearance.

It's unclear exactly why these proposed revisions (or the agency's proposed revisions to its scheduling letter and the accompanying itemized listing that were published in September of 2011) continue to languish.  It is possible there continues to be some concern at the Office of Management and Budget  (OMB) about the possible cost of these proposals to federal contractors and subcontractors.  OFCCP may also be hesitant to release final regulations without first having a Secretary of Labor in place.  (While Secretary of Labor nominee Thomas Perez has been approved by the Senate Health, Education, and Labor committee, his nomination has not yet advanced to the senate floor.)

Regardless of the reasons for the delay, OFCCP continues to focus on issues concerning veterans and persons with disabilities during compliance reviews.  In fact, the agency seems to be implementing some components of these proposed regulations already.  For example, OFCCP compliance officers routinely request extensive information on accommodations for persons with disabilities and routinely ask for numbers of veterans and persons with disabilities among recent hires during compliance reviews.

To see copies of the proposed changes to the regulations regarding veterans and persons with disabilities as well as a copy of the Department of Labor's regulatory agenda from December of 2012, visit the documents page on our website.

OFCCP Releases Budget Justification for Fiscal Year 2014

The Office of Federal Contract Compliance Programs (OFCCP) released the agency's budget justification for the 2014 fiscal year, calling for a nearly $3.3 million increase in funding. The budget justification, released in April, outlines OFCCP’s plans for the new fiscal year, which begins in October.  These plans include heightened scrutiny for pay discrimination, increased outreach to communities with high populations of vulnerable workers, and a commitment to getting the agency’s internet-based data collection system online. Of the initiatives found in the budget request, the $1.1 million directed to strengthening pay discrimination enforcement is perhaps the most controversial item considering the budgetary issues the federal government has been facing and the on-going failure by OFCCP to find extensive compensation discrimination during compliance reviews.

Will OFCCP Continue to Enforce Display of "Employee Rights" Poster?

On May 7, the U.S. Circuit Court of Appeals for the D.C. Circuit ruled that the National Labor Relations Board (NLRB) cannot require employers to display a poster that notifies workers of their rights under the National Labor Relations Act (NLRA).  (The full decision by the D.C. Circuit Court can be found on our website.) The NLRB's poster informs employees of their rights to join a union and describes various actions that are illegal under the NLRA. 

It is not clear how this decision affects the requirement to display a nearly identical poster under Executive Order 13496.  Executive Order (E.O.) 13496 is enforced in part by OFCCP.  OFCCP compliance officers are instructed to look for the E.O. 13496 poster during on-site investigations, and to review purchase orders and various materials for compliance with other provisions of the executive order.

While the employee rights poster may be problematic for some federal contractors and subcontractors, we would suggest that companies going through an affirmative action compliance review contact legal counsel before removing the poster.  OFCCP may contend that the obligation to display the poster is one of the actions that federal contractors and subcontractors voluntarily undertake when they choose to take federal funds.

Applicant Tracking Systems and OFCCP Compliance

This article originally appeared in the May 2013 edition of the LocalJobNetwork "OFCCP Digest." It is the second of a two-part series.

The vendors that provide applicant tracking systems routinely suggest that their systems are “OFCCP compliant.” Yet, federal contractors and subcontractors are frequently cited for record-keeping issues associated with applicant data. How can companies ensure that their applicant tracking systems will help them successfully navigate through an OFCCP review?

As a starting point, it is important to note that no applicant tracking system (ATS) can by itself be “OFCCP compliant." Only federal contractors and subcontractors can be OFCCP compliant. The best ATS can be completely useless during an OFCCP compliance review if it is not used properly, and the worst ATS can be a godsend if a company has meticulously used it to record and retain the type of data that OFCCP expects.