On the heels of the filing of the Center of Investigative Reporting lawsuit alleging OFCCP is not properly responding to its FOIA request for federal contractor 2016-2022 EEO-1 Type 2 Reports, the Agency is notifying companies for which it does not have a record of an objection, that the Agency intends to release the requested EEO-1 Data after the start of the new year.

In an e-mail message sent today OFCCP states:

The objection period is now closed, and we are sending this message to confirm we have not received an objection from your organization regarding release of the requested data. Because we have received no objection, we are providing your organization with notice that its Type 2 EEO-1 data is subject to release under FOIA, and OFCCP intends to release this data after January 2, 2023.  

The message goes on to provide instructions for organizations to contact OFCCP as soon as possible but no later than January 2, 2023 if they believe OFCCP has reached this determination in error (e.g., the company did in fact file objections by the deadline or believes it was not a federal contractor during the requested time period). We are aware of a number of contractors who have received this message despite filing objections during the 60-day objection period earlier this fall.

The notice goes further to explain:

If you object to release for any other reason, you may provide the basis for your objection, as well as any explanation as to why an objection was not submitted within the 60-day timeframe that ended on October 19, 2022, that OFCCP provided. If OFCCP determines that there is good cause for why your organization’s objection was not filed during the original 60-day objection period, OFCCP may, at its discretion, consider the substance of the late-filed objection.

In acknowledgement that OFCCP’s contact information may not be accurate, the notice states in bold, underline text that if the recipient of the e-mail is “not the appropriate contact for this notice, please forward this message to the appropriate department within your organization.

The contact information for OFCCP is:

National FOIA Office
Office of Federal Contract Compliance Programs
U.S. Department of Labor
Helpdesk Number: 1-800-397-6251
Email: OFCCP-FOIA-EEO1-Questions@dol.gov

On the eve of the Thanksgiving holiday, OFCCP has published proposed modifications to the Scheduling Letter and accompanying Itemized Listing. The deadline to submit comments on the proposed changes is January 20, 2023.

As a reminder, while OFCCP gives advance notice of audits through the CSAL, a contractor’s audit does not commence until it receives the official, OMB approved Scheduling Letter and Itemized listing which sets forth the data and documentation required for submission.

The last substantial revision to the scheduling letter occurred in 2014 when OFCCP added, among other things, individualized-level compensation data (Item 19) to the required audit submissions.

The Agency’s current proposed changes to the Scheduling Letter and Itemized Listing eclipse the 2014 addendums.

Just a few of the proposed changes include:

  • Item 19 (new) Documentation of policies and practices regarding all employment recruiting, screening, and hiring mechanisms, including the use of artificial intelligence, algorithms, automated systems or other technology-based selection procedures. (emphasis added)
  • Item 20(c)(previously Item 18)Promotions: For each job group or job title, provide the total number of promotions by gender and race/ethnicity, and identify whether each promotion was competitive or non-competitive. Provide documentation that includes established policies and describes practices related to promotions in the submission. Also include the previous supervisor, current supervisor, previous compensation, current compensation, department, job group, and job title from which and to which the person(s) was promoted. (emphasis added)
  • (new Item 20(d)(previously Item 18)Terminations: For each job group or job title, provide the total number of employee terminations, broken down by reason(s) for termination (e.g., retirement, resignation, conduct, etc.) including gender and race/ethnicity information for each. When presenting terminations by job title, also include the department and job group from which the person(s) terminated. emphasis added)

With respect to compensation, OFCCP is proposing several substantial modifications and additions, including a requirement mirroring the requirements set forth in the Agency’s recent Compensation Directive 2022-01.

  • Item 21 (previously Item 19) Employee level compensation data for all employees (including but not limited to full-time, part-time, contract, per diem or day labor, and temporary employees, including those provided by staffing agencies) as of (1) the date of the organizational display or workforce analysis and (2) as of the date of the prior year’s organizational display or workforce analysis. (emphasis added)
  • Item 22 (new) Documentation that the contractor has satisfied its obligation to evaluate its “compensation system(s) to determine whether there are gender-, race-, or ethnicity-based disparities,” as part of the contractor’s “in-depth analyses of its total employment process” required by 41 CFR 60-2.17(b)(3). Include documentation that demonstrates at least the following:
    • When the compensation analysis was completed;
    • The number of employees the compensation analysis included and the number and categories of employees the compensation analysis excluded;
    • Which forms of compensation were analyzed and, where applicable, how the different forms of compensation were separated or combined for analysis (e.g., base pay alone, base pay combined with bonuses, etc.);
    • That compensation was analyzed by gender, race, and ethnicity; and
    • The method of analysis employed by the contractor (e.g., multiple regression analysis, decomposition regression analysis, meta-analytic tests of z-scores, compa-ratio regression analysis, rank-sums tests, career-stall analysis, average pay ratio, cohort analysis, etc.).

The above are just a few of the highlights of the proposed changes. We are continuing to digest all of the proposed changes to the Scheduling Letter and Itemized Listing as well as the supporting statement and will be back soon with additional insights.

As we previously reported, in 2019 Will Evans from The Center for Investigative Reporting (CIR) submitted a FOIA request to OFCCP seeking all Type 2 Consolidated EEO-1 Reports filed by federal contractors from 2016-2020.  In response to the request, OFCCP published notice in the Federal Register pursuant to the Freedom of Information Act notifying contractors how they could submit objections to the release of their EEO-1 Reports.  Contractors were given until October 19, 2022 in which to make their individualized arguments as to why their EEO-1 reports were exempt from release.  Once received OFCCP was to undertake the process of determining which reports to release in response to the FOIA request.

On November 15, 2022, growing impatient with OFCCP’s apparent lack of progress of reviewing and responding to the request, CIR filed a complaint in the Northern District of California alleging OFCCP violated FOIA by not responding to CIR’s FOIA request within 20 business days. The complaint seeks injunctive relief ordering the release of the EEO-1 Reports within 20 days of the Court’s order on the matter.

According to the complaint, OFCCP was previously in communication with Mr. Evans, indicating the Agency “intends to release to [CIR] the names of those federal contractors that objected under an applicable FOIA exemption and whose data was removed from public release.”  At the time of the filing, CIR reported it had not received any such list, nor had it received any reports, including those from organizations who consented to disclosure or waived their right to withholding by not filing objections.

It remains to be seen whether the court will summarily order disclosure of the reports or if it will undertake a review of the case on the merits, including a review of the individualized basis on which each contractor argued its reports were protected from disclosure.

The Department of Labor has not yet responded to the complaint. We are monitoring the case and will alert with any further updates.

Last week, the EEOC and OFCCP announced the replacement of the “EEO is the Law” poster in favor of a new poster called the “Know Your Rights” poster.  Both EEOC and OFCCP have updated their websites accordingly.  Importantly, as of the date of this blog post, DOL had not, yet, updated its workplace poster webpage.  Printable copies for posting are available at both the EEOC and OFCCP sites. 

EEOC also provided FAQs via email, which are not available on the EEOC website, at least yet.

  Chief among the question answered is, by when must the new poster be posted?  The answer is  

a reasonable amount of time.

An additional question answered in the FAQs is whether the new poster also replaces the OFCCP Supplement. OFCCP clarified that and the answer is, yes.  We now need only the “Know Your Rights” poster. 

This new poster is not the only poster required for federal contractors.  OFCCP has created a Guide for all required posters and other notices, including the Pay Transparency Nondiscrimination Provision. 

So, time to renew your posters and make sure they are all in order. 

Since 2013, OFCCP has revised its Functional Affirmative Action Plan (FAAP) Directive several times, most recently to make it easier for covered federal contractors and subcontractors to obtain its permission to create AAPs by functional unit. 

AAP regulations require establishment AAPs but allow for the option to prepare plans by separate “functional units,” provided each functional unit has its own “managing official” and has 50 or more employees.   

Functional or Business Unit – A component within an organization. A functional or business unit should also have identifiable personnel practices or transactional activities specific to the functional or business unit (e.g., applicant flow, hires, promotions, compensation determinations, terminations, etc.) that are distinguishable from other parts of the contractor. Functions or business units should be identified and defined based on the organization’s existing business operations, personnel practices, and management structures.

While the Agency could amend the regulations to favor FAAPs over establishment plans, it has instead issued Revision 3 to Directive 2013-01 Functional Affirmative Action Programs – effective September 21, 2022 – as an enticement to FAAPs.  OFCCP also published FAQs with the revised Directive. 

In summary, Revision 3 says a contractor seeking a FAAP Agreement with OFCCP must:

Request a FAAP Agreement by submitting the ten items of information in Attachment A, including,

  • An organizational chart that clearly identifies all the proposed functional or business units to be covered by the requested FAAP and how they are related to each other within the corporation’s overall structure.
  • A narrative description of the “business or function” of each proposed FAAP unit and how it meets the definition of a functional or business unit set forth above.

Notably, “approval of FAAP agreement requests by OFCCP is not automatic… Generally, OFCCP makes this decision within 60 calendar days of the request if all the required information is provided. OFCCP may require additional time if more information is needed.” 

OFCCP also characterizes FAAP application as a “negotiation process” the “discussion items” for which are outlined in Attachment B

  • The reporting hierarchy of the functional or business units.
  • Personnel procedures, including recruitment, hiring, promotion, compensation, termination, and record retention and data analysis as they apply to each functional or business unit, including identification of units that have differing personnel or compensation practices.
  • How the contractor anticipates complying with the affirmative action requirements of Executive Order 11246, Section 503, and VEVRAA.
  • How each functional unit manages its human resources and equal employment opportunity responsibilities.
  • Notify OFCCP of FAAP changes to the FAAP structure within 60 days.  For dynamic organizations, this may be a considerable burden, requiring the contractor to essentially negotiate with OFCCP over a new FAAP structure each time there is a change to an existing functional unit. 

  • Notify OFCCP within 60 calendar days of any changes to the primary corporate contact identified in the FAAP Agreement. 
  • Request renewal of the FAAP Agreement at least 120 days prior to expiration of the five-year term of a FAAP Agreement.  The renewal process may essentially entail re-applying for a FAAP Agreement. 

It is undoubtedly true that securing a FAAP Agreement is more efficient than it has ever been, but in addition to the foregoing requirements, FAAPs pose another challenge because FAAPs may be larger in terms of workforce headcount and personnel activity than establishment plans.  Any time we must submit more data to the Agency during a compliance review, the risks increase.  Thus, a primary consideration for any contractor considering FAAPs is whether its organizational structure is amendable to manageably-sized functional units, each with its own managing official.

There are advantages to engaging in affirmative action via FAAPs because they may better align with how a contractor does business and conducts affirmative action.  However, Revision 3 does not entirely ease the administrative burden of applying for, updating, renewing, or maintaining a FAAP Agreement with OFCCP and does not address the main drawback to FAAPs:  size.

OFCCP has announced it is extending the deadline for contractors to respond to the Agency’s August 19, 2022 Notice of Request Under the Freedom of Information Act for Federal Contractors’ Type 2 Consolidated EEO-1 Report Data.  The new deadline by which affected contractors need to submit objections is October 19, 2022 to “ensure that Covered Contractors have time to ascertain whether they are covered and submit objections.”

In addition to extending the deadline, OFCCP has indicated it will now be emailing contractors that OFCCP believes are covered by this FOIA request, using the email address provided by contractors that have registered in OFCCP’s Contractor Portal and the email addresses provided as a contact for the EEO-1 report  in an attempt to assist contractors determine whether they are included in the universe of Covered Contractors during the requested timeframe.

As a reminder, OFCCP has created a OFCCP Submitter Notice Response Portal for submission of objections.  The website also contains FAQs and alternative methods for contacting OFCCP.

Specially, OFCCP indicates contractors may contact the OFCCP FOIA Help Desk by phone or email with any questions related to this process that it has not covered in its frequently asked questions.  The Agency asks that

[w]hen calling about technical issues or other questions, please specify that you are calling in reference to the Submitter Notice Response Portal. Only responses or inquiries for the purpose of responding to the Federal Register Notice should be sent to the email address below. Responses sent elsewhere may not be acknowledged or accepted. If a company has filed EEO-1 Reports in the past, the EEO-1 Component 1 Reports from 2016-2020 are available in the EEO-1 Online Filing System. If you still need to contact OFCCP to determine whether your company’s data is subject to this request, please email OFCCP at OFCCP-FOIA-EEO1-Questions@dol.gov.

 

OFCCP’s regulations were designed for the typical private sector contractor.  As a result, higher educational institutions, particularly colleges and universities, often struggle with fitting their “round pegs” processes into the “square holes” that OFCCP designed.  OFCCP’s Contractor Portal is no exception.

The Portal identifies employer establishments based on EEO-1 Reports filed from 2018.  But higher educational institutions file Integrated Postsecondary Education Data System (IPEDS) Reports, not EEO-1 Reports.  This disconnect left many educational institutions to apply their best judgement to define its establishments when registering in the Portal—and increased the burden on these contractors when creating new accounts within the Portal.

Perhaps to address such issues, on August 25, OFCCP issued updated guidance that better fit its requirements to higher educational institutions’ processes.  Under this new guidance, higher educational institutions should register in the Portal using their IPEDS Unit Identification, rather than the unit identifier from an EEO-1 Report.

The Agency has also updated its Contractor Portal User Guide with a new “Educational Institutions Registration” section and nine new “Figures” to assist educational institutions in the Portal’s administrative process.

OFCCP has also issued a new FAQ to assist educational institutions navigate the process:

4. How do educational institutions register in the Contractor Portal?

Educational institutions register using their Integrated Postsecondary Education Data System (IPEDS) unique identification number (UNITID or IPEDS ID) and Employer Identification Number (EIN). Educational institutions may develop a single AAP or multiple AAPs, depending on their organizational structure. To account for these flexibilities and possible variations in AAP development, educational institutions will certify compliance for all AAPs associated with their 6-digit IPEDS ID.

Interestingly, this procedural guidance also reinforces other substantive guidance for educational institutions.  For example, this new FAQ confirms the guidance from OFCCP’s Educational Institutions Technical Assistance Guide and campus-like setting guidance that campus environments may appropriately be considered separate establishments—therefore, permitting multiple AAPs to cover a single campus.

As a result, educational institutions may want to consider whether their operations would support—and their organizational objectives may strategically benefit from—developing multiple affirmative action programs and certifying each separately in OFCCP’s Portal.

If you have any questions about this new guidance or strategic approaches to educational institution affirmative action planning, please contact a member of our Affirmative Action Compliance, OFCCP and Government Contractor Practice Group.

OFCCP announced today it will launch the Notification of Construction Contract Award Portal (NCAP) on August 26, 2022.  While the NCAP is not yet live, OFCCP has launched an NCAP informational page with background information.  The page will eventually include FAQs, how-to videos, and a User Guide.

The purpose of the NCAP is distinct from the supply and service Contractor Portal for AAP certification (which does not apply to construction contractors) and the new “OFCCP Submitter Notice Response Portal” for submission of federal contractor objections to disclosure of EEO-1 Reports under the Freedom of Information Act (FOIA).

The NCAP is specifically designed to be a more efficient way for federal construction contractors and subcontractors (and others) to fulfill their obligations under OFCCP construction contractor regulations (41 C.F.R. § 60-4.2 Solicitations) to provide notice of contract and subcontract awards of $10,000 or more.

NCAP provides contracting officers, contractors, and applicants seeking federal assistance for construction projects (such as state DOTs), a more efficient and secure electronic means to submit a notice to OFCCP within 10 working days of an award of a federal or federally assisted construction contract or subcontract in excess of $10,000. These notification requirements can be viewed at 41 CFR 60–4.2.

For federal construction contractors and subcontractors, the notice obligation is triggered by a covered contract, which should include the following section of the “Notice of Requirement for Affirmative Action To Ensure Equal Employment Opportunity (Executive Order 11246):”

The Contractor shall provide written notification to the Director of the Office of Federal Contract Compliance Programs within 10 working days of award of any construction subcontract in excess of $10,000 at any tier for construction work under the contract resulting from this solicitation. The notification shall list the name, address and telephone number of the subcontractor; employer identification number of the subcontractor; estimated dollar amount of the subcontract; estimated starting and completion dates of the subcontract; and the geographical area in which the subcontract is to be performed.

Although it may be rare for this notice obligation to apply to non-construction federal contractors, it can in a limited circumstance:

All nonconstruction contractors covered by Executive Order 11246 and the implementing regulations shall include the notice in paragraph (d) of this section [Notice of Requirement for Affirmative Action To Ensure Equal Employment Opportunity (Executive Order 11246)] in all construction agreements which are necessary in whole or in part to the performance of the covered nonconstruction contractnonconstruction contractors shall give written notice to the Director within 10 working days of award of a contract subject to these provisions. The notification shall include the name, address and telephone number of the contractor; employer identification number; dollar amount of the contract, estimated starting and completion dates of the contract; the contract number; and geographical area in which the contract is to be performed.

OFCCP explains the purpose of these notice requirements and the NCAP:

Considering the federal government’s historic investments in the country’s infrastructure, this information will play a critical role in enabling OFCCP to more efficiently schedule and perform compliance reviews to ensure that companies doing business with the federal government fulfill their equal employment opportunity commitments.

We will continue to monitor this and share additional thoughts after the NCAP goes live on August 26th.

According to OFCCP, on June 2, 2022, the Center for Investigative Reporting sent OFCCP a request for the disclosure of

 . . .Type 2 EEO-1 reports for all federal contractors, including first-tier subcontractors, from 2016-2020….

The Center for Investigative Reporting, and other persons and organizations, have a history of requesting EEO-1 reports for various employers and/or industries.  Importantly, this most current request is specifically for the EEO-1 Type 2 reports  – the Consolidated EEO-1 report (as opposed to a headquarters (Type 3) or individual establishment report (Type 4) and is not a request for contractor’s Component 2 pay data.

Under the Freedom of Information Act (FOIA), on which the Center for Investigative Reporting is relying to request the information, requestees are entitled to object to the disclosure of the requested EEO-1 Reports.  The published notice states:

OFCCP has reason to believe that the information requested may be protected from disclosure under FOIA Exemption 4, which protects disclosure of confidential commercial
information, but has not yet determined whether the requested information is protected from disclosure under that exemption. OFCCP is requesting that entities that filed Type 2
Consolidated EEO-1 Reports as federal contractors at any time from 2016-2020, and object to the disclosure of this information, submit those objections to OFCCP within 30 days of the date
of this Notice.

To facilitate noticing contractors of the request and to handle objections, OFCCP has publicly published a Notice of the Request, as well as launched a Response Portal via which federal contractors can submit objections.   The website also includes helpful FAQs.

As OFCCP explains in its Notice of Request, “Exemption 4 to the FOIA protects against the disclosure of ‘trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential.’ 5 U.S.C. 552(b)(4).”  If a federal contractor objects to release of an EEO-1 Report, it is “required to submit a detailed written statement as to why the information is a trade secret or commercial or financial information that is privileged or confidential.”  OFCCP will evaluate the contractor’s responses received to determine whether the requested information includes confidential trade secret, commercial, or financial information that should be withheld pursuant to FOIA Exemption 4.  If a contractor does not object, OFCCP will not have a basis to withhold the information.

In order to facilitate their review, OFCCP advises that objections submitted via the Response Portal must include:

  • The contractor’s name, address, contact information for the contractor (or its representative);
  • Should, at minimum, address the following questions in detail so that OFCCP may evaluate the objection to determine whether the information should be withheld or disclosed pursuant to FOIA Exemption 4:
    • What specific information from the EEO-1 Report does the contractor consider to be a trade secret or commercial or financial information?
    • What facts support the contractor’s belief that this information is commercial or financial in nature?
    • Does the contractor customarily keep the requested information private or closely-held?
    • What steps have been taken by the contractor to protect the confidentiality of the requested data, and to whom has it been disclosed?
    • Does the contractor contend that the government provided an express or implied assurance of confidentiality? If no, were there express or implied indications at the time the information was submitted that the government would publicly disclose the information?
    • How would disclosure of this information harm an interest of the contractor protected by Exemption 4 (such as by causing foreseeable harm to the contractor’s economic or business interests)?

Some federal contractors and subcontractors already share EEO-1 Report data with stakeholders and/or the public which may likely impact a decision to object, or to successfully argue that these data are confidential. For those federal contractors and first-tier subcontractors who do not already share EEO-1 data, the Center for Investigative Reporting and others continued pursuit of EEO-1 Report data may bring to a focal point what organizations want to, and can do, about sharing EEO-1 with the first consideration being whether the contractor wants to object and then the implications of objecting.

For those contractors who wish to object to disclosure it is imperative they submit the requested information by the September 19, 2022 deadline. If a contractor does not object, OFCCP will not have a basis to withhold the information.  Thus, the decision should be based on careful consideration of individual contractor situations; a review of EEO-1 Report data; as well as on the advice of legal counsel

We will continue to monitor this situation and provide any notable updates.

There has been lot of talk in the months since OFCCP released Directive 2022-01: Advancing Pay Equity Through Compensation Analysis, with the topic of attorney-client privilege being the primary topic of concern.  So much so that OFCCP Director Jenny Yang addressed the issue in her remarks last month at the NILG National Conference.  Today, OFCCP  released a revised version of Directive 2022-01 that addresses the issue further and describes additional types of documentation contractors can provide in the course of an audit to demonstrate compliance with their obligation to review their “compensation system(s)” under 41 CFR 60-2.17(b)(3), including submission of a detailed affidavit in lieu of producing an analysis.

Director Yang shared in a blog post the major changes of the revised directive:

  1. It explicitly reaffirms the agency’s position that it does not require the production of attorney-client privileged communications or attorney work product.
  2. It  identifies the documentation that OFCCP requires from a contractor to determine that the contractor has satisfied its obligation to perform a compensation analysis.
  3. It explains the documentation required from a contractor when its compensation analysis identifies problem areas to demonstrate that it has implemented action-oriented programs.

In addition, Director Yang explained

(i)n addition, although the original Directive used the phrase “pay equity audit” to refer to contractors’ obligations under 41 CFR 60-2.17(b)(3), this revised Directive instead uses the term “compensation analysis” to avoid any confusion regarding the nature of a contractor’s obligations.

With respect to acceptable documentation demonstrating compliance “[i]f a contractor believes its full compensation analysis contains privileged attorney-client communications or attorney work product” , the Directive provides that contractors now have three options to demonstrate compliance:

  1. A contractor may make available a redacted version of its compensation analysis, provided that the non-redacted portions include the required facts described below.
  2. A contractor may conduct a separate analysis during the relevant AAP period that does not implicate privilege concerns and provide that analysis to OFCCP in full.
  3. A contractor may generate a detailed affidavit that sets forth the required facts described below but does not contain privileged material.

At a minimum, contractors must provide the following details to OFCCP to demonstrate compliance:

  1. when the compensation analysis was completed;
  2. the number of employees the compensation analysis included and the number and categories of employees the compensation analysis excluded;9
  3. which forms of compensation were analyzed and, where applicable, how the different forms of compensation were separated or combined for analysis (e.g., base pay alone, base pay combined with bonuses, etc.);10
  4. that compensation was analyzed by gender, race, and ethnicity; and
  5. the method of analysis employed by the contractor (e.g., multiple regression analysis, decomposition regression analysis, meta-analytic tests of z-scores, compa-ratio regression analysis, rank-sums tests, career-stall analysis, average pay ratio, cohort analysis, etc.).

In the course of the review, if a contractor’s compensation analysis identifies any problem areas (including gender-, race-, or ethnicity-based pay disparities), the Directive explains OFCCP will require documentation that demonstrates compliance with the regulations at 41 CFR 60-2.17(c) that require the contractor to develop and execute action-oriented programs to correct them.  To demonstrate compliance, OFCCP will require at minimum:

  1. the nature and extent of any pay disparities found, including the categories of jobs for which disparities were found, the degree of the disparities, and the groups adversely affected;
  2. whether the contractor investigated the reasons for any pay disparities found;
  3. that the contractor has instituted action-oriented programs designed to correct any problem areas identified;
  4. the nature and scope of these programs, including the job(s) for which the programs apply and any changes (e.g., pay increases, amendments to compensation policies and procedures) the contractor made to the compensation system; and
  5. how the contractor intends to measure the impact of these programs on employment opportunities and identified barriers.

The intent of OFCCP is not to obtain contractor’s privileged analysis, but the Directive makes it clear that

if a contractor does not provide OFCCP with documentation sufficient to demonstrate its compliance with 41 CFR 2.17(b)(3) on the basis that the required categories of information outlined in Section 7(b) are subject to the attorney-client privilege or work-product doctrine, OFCCP will find the contractor has not satisfied its obligations under 41 CFR 60-2.17(b)(3) and 41 CFR 60-2.10(c). OFCCP will not require the production of privileged attorney-client communications or attorney work product.

We will continue to analyze the Directive and share any further insights and clarifications as they develop.