OFCCP Issues Directive Regarding Religious Freedom

As we reported last week, in light of three Supreme Court cases addressing religious freedoms, OFCCP has issued a new Directive 2018-3 and a press release regarding “religion-exercising” organizations and individuals. The Directive cites three recent Supreme Court cases as well as Executive Orders issued by President Trump. With respect to the court cases, the Directive notes:

Recent court decisions have addressed the broad freedoms and anti-discrimination protections that must be afforded religion-exercising organizations and individuals under the United States Constitution and federal law.

The Directive also acknowledges

 recent Executive Orders have similarly reminded the federal government of its duty to protect religious exercise – and not to impede it.

The Directive notes federal contractors and subcontractors have non –discrimination obligations as set forth in Executive Order 11246, which include prohibitions on discrimination on the basis of religion as well as sexual orientation and gender identity. The Directive also reiterates a religious exemption contained in the Order that exempts certain contractors and sub-contractors from compliance with this section of the Executive Order. The religious exemption is limited to “a religious corporation, association, educational institution, or society, with respect to the employment of individuals of a particular religion to perform work connected with the carrying on of such [entity’s] activities.” 41 C.F.R. § 60-1.5(a)(5).

The Directive neither overturns President Obama’s Executive Order, which expanded Executive Order 11246 and its regulations to cover “sexual orientation” or “gender identity,” nor directly expands the religious exemption in the Order and regulations. Additionally, EEOC has taken the position that Title VII offers protection on the basis of gender identity and sexual orientation.

However, the Directive states it “supersedes” the Frequently Asked Questions regarding the religious freedom exemption to the extent they are inconsistent with these Supreme Court cases and President Trump’s Executive Orders. Thus, the Directive essentially modifies the FAQ guidance and instructs OFCCP to account for these legal developments in its enforcement and other efforts. Specifically, the Directive states OFCCP staff “should bear in mind” that:

  • They “cannot act in a manner that passes judgment upon or presupposes the illegitimacy of religious beliefs and practices” and must “proceed in a manner neutral toward and tolerant of … religious beliefs.”
  • They cannot “condition the availability of [opportunities] upon a recipient’s willingness to surrender his [or her] religiously impelled status.”
  • “[A] federal regulation’s restriction on the activities of a for-profit closely held corporation must comply with [the Religious Freedom Restoration Act].”
  • They must permit “faith-based and community organizations, to the fullest opportunity permitted by law, to compete on a level playing field for … [Federal] contracts.”6
  • They must respect the right of “religious people and institutions … to practice their faith without fear of discrimination or retaliation by the Federal Government.”

What Does This Mean for Contractors?

It would seem contractors are caught in a difficult situation. However, it’s important to keep in mind OFCCP’s FAQs and Directives are guidance documents that do not have the same authority as Executive Orders or the regulations.  The Directive states that OFCCP may pursue regulatory modifications to implement these cases. Until then, contractors should continue to comply with the regulations prohibiting discrimination on the basis of “sexual orientation” and “gender identity” as they have been, unless the contractor has a specific need to apply the principles of these Supreme Court cases to a particular situation.

OFCCP Focused Reviews to Begin in Fiscal Year 2019

In the Directive released late last week, OFCCP announced its plan to start scheduling focused reviews starting in Fiscal Year 2019.  OFCCP’s fiscal year begins October 1.

Directive 2018-04 directs OFCCP staff to “work towards ensuring that a portion of future scheduling lists, starting with Fiscal Year 2019, include focused reviews as to each of the three authorities that OFCCP enforces,” with the three authorities being Executive Order 11246, VEVRAA and Section 503 of the Rehabilitation Act.

Focused reviews are one of several types of investigative procedures OFCCP is authorized by regulation to conduct.  The types of investigations include:

  • Compliance Reviews which are comprised of a desk audit, an on-site, and, off-site review of records;
  • Off-site Review;
  • Compliance Check; and
  • Focused Reviews

While the Directive provides some details around OFCCP’s anticipated expectations for the focused reviews – including mandatory onsite visits – the Directive does not set out exactly what contractors can expect if selected for a focus review.  Instead, the document directs OFCCP staff “to develop a standard protocol for conducting focused reviews.”  In furtherance of its commitments to transparency and certainty, OFCCP staff is directed to “make this information available publicly in its FAQs prior to the next scheduling list being issued” as well as to develop training for staff and contractors as to the focused reviews.

Interestingly, as part of the Directive’s description of an example Section 503 focused review, it states

OFCCP would also seek to evaluate hiring and compensation data

in addition to its evaluation of accommodation practices to ensure individuals with disabilities are not being discriminated against in employment.  The Directive notes similar approaches will be used to evaluate compliance with VEVRAA and Executive Order 11246.

As a reminder, Directives provide guidance to OFCCP staff and contractors on enforcement and compliance policies or procedures.  As the directives themselves acknowledge “[d]irectives do not change the laws and regulations governing OFCCP’s programs and do not establish any legally enforceable rights or obligations.

We are eager to learn more about what data OFCCP intends to review and how it intends to analyze the information and look forward to understanding the Agency’s protocols for these reviews.

We will be sure to provide more detail and insights as they become available.

OFCCP Issues Two New Directives Addressing Focused Reviews and Religious Discrimination

As discussed during the 2018 ILG National Conference, Acting Director Craig Leen has released a Directive formalizing OFCCP’s plans to start initiating focused reviews.  Acting Director Leen, simultaneously released a Directive addressing religious discrimination – a topic not broadly (or otherwise) discussed during the Agency’s recent public engagements.

The stated purpose of Directive 2018-03: Executive Order 11246 Sec 204(c), religious exemption is “to incorporate recent developments in the law regarding religion-exercising organizations and individuals.

The stated purpose of Directive 2018-04: Focused reviews of contractor compliance with Executive Order 11246 (E.O.), as amended; Section 503 of the Rehabilitation Act of 1973 (Section 503), as amended; and Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA), as amended is “to direct that a portion of future scheduling lists include focused reviews as to each of three authorities that the Office of Federal Contract Compliance Programs enforces.

We are in the process of reviewing each directive and will provide our thoughts and insights on both the Directive 2018-03 and Directive 2018-04 soon.

Annual VETS Reporting Portal Open

Even though it feels as thought we are still in the midst of summer, the time is here for annual VETS-4212 reporting.  The portal is now open for the 2018 filing season which started on August 1, 2018 and ends on September 30, 2018.

If you recall, last year, VETS clarified that in addition to using a traditional workforce snapshot from between July 1, 2018 and August 31, 2018 to complete the filing, contractors have the option of using a December 31, 2017 workforce snapshot for the report.  This change allows contractors to use the same workforce data for they used for EEO-1 reporting for the VETS filing.

If you have questions or concerns about your filing you can contact VETS-4212 customer support at 1-866-237-0275 or via email at VETS4212-customersupport@dol.gov.

OFCCP Working on Contractor Certification Program

Following the tone of the preceding days, the 2018 ILG National Conference closed Friday morning with a friendly conversation between Acting Director Craig Leen and NILG Chair Paul McGovern.  The two discussed several of the themes and OFCCP initiatives addressed during the conference:

Contractor Certification

Acting Director Leen also discussed a new topic – the Agency’s work to develop a contractor verification or certification process.  Leen discussed the current General Services Administration’s (GSA’s) certification process which occurs within the System for Award Management (SAM) registration system.  He described how the simple “check-the-box” certification question likely does not capture accurately who is in compliance with their affirmative action obligations.  Leen recognized those in attendance likely already prepare affirmative action plans but raised concern about the many that do not because of a low risk of audit.

The Acting Director did not get into specifics of OFCCP’s certification program but mentioned the Agency is asking the GSA to provide it with information on how contractors respond to the certification question in SAM and shared OFCCP will be taking a look at those answers.

With respect to all of OFCCP’s initiatives, enforcement and technical assistance alike, Acting Director Leen encouraged conference attendees to reach out to him with thoughts and suggestions.

As part of his closing remarks, Acting Director Leen expressed his gratitude for being included in such a “tremendous” conference, and remarked on the many sessions he attended and things he learned.  The feelings are mutual and those in attendance appreciated the opportunity to engage (again) in information sharing with the Agency and look forward to continued opportunities to do so in the future.  See you next year!

OFCCP Acting Director Shares His Vision for Upcoming Agency Initiatives

Day two of the 2018 ILG National Conference has concluded and it was another day packed with information and insights for attendees.

Riding the “waves of change”, over the past two days OFCCP and officials from the U.S. Department of Labor Solicitor’s Office as well as the EEOC, have shared their insights, thoughts, and new initiatives and desires for enforcement and compliance.

Yesterday, in addition to releasing the “What Contractors Can Expect” expectations, Acting Director Craig Leen commented on a number of initiatives and “things in the works” in the OFCCP National Office.  As part of his discussion of OFCCP’s four points of focus, Acting Director Leen shared additional details about the Agency’s plans.

  1. Transparency
    • The Agency is exploring the idea of issuing Opinion Letters to address topics on which they get questions.
  2. Certainty
  3. Efficiency
    1. Citing the “unacceptable” length of its aged cases, Acting Director Leen shared the Agency is looking at ways to try to complete desk audits in 45 days.  Acting Deputy Director Marika Litras echoed ta similar commitment to more efficient reviews during her presentation to conference attendees Thursday morning.
  4. Recognition
    • Acknowledging the interest from the contractor community to bring back recognition awards Acting Director Leen shared the Agency is exploring the possibility.

Acting Director Leen also highlighted the Agency’s commitment to 100% compliance to every protected group as part of its responsibility and commitment to all.  As part of this commitment, he shared the Agency is looking to bring back focused reviews to check compliance with Section 503 and VEVRAA -noting they are exploring the possibility that a portion of establishments selected for audit would be subject to the focused reviews.

In his Thursday afternoon break-out session on Leading Practices in Disability Inclusion, Acting Director Leen expanded further on his vision for the focused reviews in the Section 503 space.  Specifically, the reviews would include:

  • an on-site visit
  • interviews with managers and ADA Coordinators to learn about the company’s practices
  • review of accommodation practices

He also shared, that as part of these focused reviews, he would like OFCCP to look into the hiring and promotion practices of the establishment, as well as an evaluation of the accommodation process to ensure it is not discriminatory or retaliatory.

In his impassioned address, Acting Director Leen emphasized

inclusion is good for business  . . . when people feel welcome they succeed.

There is a plethora of information being shared and discussed among presenters and conference attendees and we are looking forward to the Acting Director’s impressions and concluding remarks tomorrow as the conference comes to a close.

OFCCP Releases Description of “What Contractors Can Expect”

It has been a busy morning on the first day of the 2018 ILG National Conference in Anaheim, California.  After a dramatic and moving opening presentation, OFCCP Acting Director Craig Leen gave the morning’s Keynote address.  Echoing the conference’s “Navigating the Waves of Change” theme, Acting Director Leen spoke to the group about the four pinnacles of change the current administration is focused on, which are:

  1. Transparency
  2. Certainty
  3. Efficiency
  4. Recognition

Shortly after his address, in furtherance of this message, Acting Director Leen shared a document entitled “What Federal Contractors Can Expect.”  While not formally titled as such, this is likely what has previously been previewed as the “Contractor Bill of Rights.”  The expectations mirror the concepts and sentiments of Acting Director Leen’s remarks and sets out a commitment from OFCCP that

Contractors seeking OFCCP’s assistance with satisfying their nondiscrimination and equal employment opportunity obligations can expect clear, accurate, and professional interactions with OFCCP’s staff.

Additionally, the two page document sets out the following of expectations from OFCCP:

  • Access to Accurate Compliance Assistance Material
  • Timely Responses to Compliance Assistance Questions
  • Opportunities to Provide Meaningful Feedback and Collaborate
  • Professional Conduct by OFCCP’s Compliance Staff
  • Neutral Scheduling of Compliance Evaluations
  • Reasonable Opportunity to Discuss Compliance Evaluation Concerns
  • Timely and Efficient Progress of Compliance Evaluations
  • Confidentiality

We will be sure to keep you posted about this, and other developments, as we continue to hear more from Acting Director Leen and other OFCCP personnel at the conference. So, as always, stay tuned.

BREAKING NEWS: Head of OFCCP Reported to Be Stepping Down

With confirmation from a Department of Labor spokesperson, Bloomberg News is reporting that Ondray Harris will soon be leaving his role as OFCCP Director.  While the reason for his departure was not disclosed, Bloomberg is reporting he will be stepping down from his role at the end of this week.

Bloomberg is reporting Senior Advisor Craig Leen will be serving as interim Director until a permanent Director is named.  If  you remember, prior to Harris’ appointment as Director, there were several reports that Leen himself was going to be named as the Agency head.  Perhaps those reports were not misinformed but simply premature.

The news of Harris’ departure comes just about a week before contractors and OFCCP representatives will gather in Anaheim, California at the 2018 Industry Liaison Group National Conference where Director Harris and Senior Advisor Craig Leen were both slated to speak.  As of this posting Director Harris still appears on the conference agenda.

This is a developing story so stay tuned for updates.

And be on the look out for our daily reports from the ILG Conference.  Hope to see you there!

Latest Merger News: Proposal to Merge Departments of Labor and Education

Early in the Trump Administration, it was proposed to move OFCCP into the EEOC.  Congress subsequently rejected the budget proposal containing the proposed merger and the idea was put to rest.

Not to give up it’s quest to streamline the Administration and propose budget-saving measures, the Administration recently proposed a merger of the Departments of Labor and Education into an umbrella agency to be named The Department of Education and the Workforce.  According to a statement by Mick Mulvaney, Director of Office of Management and Budget:

The federal government is bloated, opaque, bureaucratic, and inefficient. President Trump understands the frustration felt by hard-working Americans… I am eager to work with my colleagues across the executive branch and in Congress to deliver a more trusted and efficient government that puts the American taxpayer first.

According to the statement, merging the departments would better address the “skill needs of American students and workers in a coordinated way.”

The proposal does not specifically address the detailed impact a merger might have on OFCCP, but shows  OFCCP residing in an enforcement arm of the new agency, post-merger. (Page 26 of the Plan)  The merger likely would require Congress’ approval and could take years to implement, thus its future is anything but certain.  As always, we will be sure to report the latest developments.

OFCCP Extends TRICARE Moratorium

As we recently reported, OFCCP is evaluating affirmative action obligations for TRICARE providers and expects to publish rulemaking on this front next year.  In connection with this, to allow time for the rulemaking process, as well as to allow time for any potential related legislative action, OFCCP announced it has extended the enforcement moratorium for TRICARE providers.

The current moratorium is set to expire in May 2019.  The new Directive, known as Directive 2018-02, amends the existing TRICARE Directive (2014-01) and extends the moratorium for an additional two years – until May 7, 2021.  In addition to extending its length, OFCCP has expanded the coverage of the moratorium to now cover Veteran Affairs Health Benefits Program providers, in addition to TRICARE providers.

In the Directive OFCCP Director Ondray Harris explains the motivation for expanding to the coverage to include the Veterans programs.

The difficulties active-duty and retired service members and their families have accessing healthcare are well–documented.  OFCCP is concerned that the continued uncertainty over the extent to which the E.O., Section 503, and VEVRAA apply to TRICARE subcontractors has contributed to this difficulty, and that the approaching expiration of the moratorium and accompanying uncertainty further exacerbate the difficulty.

The Directive also reflects OFCCP’s understanding that “Congress may enact legislation affecting this area in the near future”, which the Agency believes further supports extending the moratorium so it may evaluate and address any legislative changes.

We’ll continue to monitor this area for developments so stay tuned for updates.

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