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.

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.

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 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.

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.

Supreme Court Issues Decision in Fisher v. University of Texas

On Monday, June 24, the Supreme Court issued its decision in Fisher v. University of Texas. Fisher, a white applicant, had sued the University of Texas (UT), claiming that the university’s use of affirmative action in the admission process unfairly denied her a spot. Fisher claimed the use of affirmative action violated the Equal Protection Clause of the Fourteenth Amendment. The Court ruled that the lower courts had not used the correct standard of scrutiny in the evaluating the case, and sent the case back to the lower courts for further review. The Court ruled 7 to 1 on this decision, with Justice Kagan recusing herself due to previous involvement in the case during her time as Solicitor General, and Justice Ginsberg dissenting.

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.

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.

What Does OFCCP Want?

This article originally appeared in the April 2013 edition of the LocalJobNetwork "OFCCP Digest." 

Much has been written about the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) in the last few years. OFCCP has a number of significant new initiatives, most notably its recent directive regarding the evaluation of compensation data that federal contractors and subcontractors will be asked to provide during compliance reviews. OFCCP has also gone through a number of changes to the manner in which it conducts compliance reviews. For example, the agency was routinely conducting on-site investigations for a while, but OFCCP is now limiting its on-site presence and is instead requesting many additional documents during the course of a compliance review.

While we know a great deal about what OFCCP is doing, a rarely asked question is this: what does OFCCP want? Phrased somewhat differently, what are OFCCP’s expectations of federal contractors and subcontractors? And, what kind of expectations does the federal government in turn have for OFCCP?

Scheduling Letters Associated with Pre-Scheduling Notices Begin to Appear

Well, that didn't take long.

Some of the facilities that received pre-scheduling notices from OFCCP during the first week in April have already received the letter that formally opens an OFCCP review.  While the pre-scheduling notices were supposed to give companies time to prepare for a review, OFCCP appears to be moving forward aggressively with this round of compliance reviews.  (We are even aware of one situation where a company received the letter opening its compliance review BEFORE the company received its pre-scheduling notice.)

This letter that opens a review, referred to as a scheduling letter, and the itemized listing that accompanies the scheduling letter are the same as they've been for some time.  OFCCP's revised scheduling letter and itemized listing that were first published in May of 2011 are still on hold at the Office of Management and Budget.  (You can find a copy of the revised scheduling letter and itemized listing that OFCCP proposes to use on the documents page of our website.)

We expect that companies receiving this round of scheduling letters will be asked to provide extensive compensation data during their compliance reviews.  This round of reviews will be the first under OFCCP's new Directive 307, the directive that instructs OFCCP compliance officers to give expanded attention to the compensation data and practices of federal contractors and subcontractors.  It will be interesting to see how OFCCP implements this directive and what other priorities OFCCP has for federal contractors and subcontractors in this round of reviews.

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.