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 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.

OFCCP Scheduling Process Aimed at Larger Organizations?

The most recent release of pre-scheduling notices by OFCCP seems to be following certain patterns that were evident in the pre-scheduling notices sent out by OFCCP in late 2012.  It appears both from experience with our clients and from discussions we've had with others that OFCCP is targeting larger organizations.  These larger organizations are receiving a disproportionate number of pre-scheduling notices.  John Fox of Fox, Wang & Morgan has also reported that OFCCP is disproportionately selecting certain industries for review, including the healthcare and manufacturing sectors.

The fact that OFCCP is targeting certain types of companies and certain industries negates the long-standing idea that OFCCP uses a neutral, unbiased tool to select federal contractors and subcontractors for review.  OFCCP's decision to conduct multiple reviews at the sites of larger federal contractors and subcontractors appears to be part of the agency's desire to conduct corporate-wide reviews of certain companies.  While it is unclear whether OFCCP has the right to conduct such corporate-wide reviews, the agency seems to be making adjustments to its scheduling process that are allowing OFCCP to get a broader picture of what happens in certain larger organizations.

The current tool used to select companies for review, the Federal Contractor Selection System (FCSS), uses data from EEO-1 reports, history of compliance reviews, number of discrimination complaints, and various other factors to help OFCCP determine which companies to review.  Some of the factors used by the FCSS and how these factors are weighted is a closely-guarded secret.  While OFCCP states on its website that the FCSS is a "neutral system," the agency's reviews during federal fiscal year 2013 (which started in October of 2012) appear to be anything but random.

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.