As has been highly anticipated since the finalization of the Agency’s recently updated Scheduling Letter, OFCCP has released a new list of contractors selected for audit (FY2023 Release 2). The Agency has also published an explanation of the methodology used to select the contractors for review.

Per the Agency’s e-mail notification, it selected 1,000 contractors and subcontractors for audit. A quick review of the list reveals that there are 1,000 establishment/FAAPs identified, but several contractors have multiple reviews listed. Thus, it seems to be more accurate that there are 1,000 reviews scheduled.

Contractors who appear on the list should start preparing immediately as we expect OFCCP to start initiating audits imminently.

We are in the process of digesting the list and methodology and will back soon with more insights.

It’s official, the 2022 EEO-1 Component 1 data collection will open on Tuesday, October 31, 2023.  The deadline for employers to file their EEO-1 reports is Tuesday, December 5, 2023.

Employers have been waiting for the announcement as the deadline has been delayed twice. In the meantime, federal contractor have been working to prepare and file the annual VETS-4212 reports, which are due by September 30, 2023.

The update was posted to the EEO-1 reporting website. Further updates, will be posted on the general EEO-1 home page.

Upcoming dates to note:

  • The EEOC anticipates posting the updated 2022 EEO-1 Component 1 Instruction Booklet for filers on Wednesday, September 6, 2023.
  • The EEOC anticipates posting the updated 2022 EEO-1 Component 1 Data File Upload Specifications for filers on Wednesday, September 13, 2023.

We will continue to monitor and report additional updates so stay tuned.

OFCCP has announced finalization of the Agency’s “updated” Supply and Service Scheduling Letter and Itemized Listing. As a reminder, OFCCP initially proposed significant changes to the letter, which initiates a compliance review for scheduled contractors, in 2022. Following significant public comment, OFCCP published a slightly revised proposed letter earlier this year.

Notably, the Itemized Listing released today still includes a requirement to submit:

Item 21. Identify and provide information and documentation of policies, practices, or systems used to recruit, screen, and hire, including the use of artificial intelligence, algorithms, automated systems or other technology-based selection procedures.

Item 22. 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:

  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;
  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.);
  4. That compensation was analyzed by gender, race, and ethnicity;

Interestingly, the notice indicates the updated letter applies to any “supply and service compliance evaluations scheduled on or after August 24, 2023, the day before the Agency announced the release of the updated letter.

To the extent the updated scheduling letter asks contractors to submit information not previously requested, the immediate implementation of the letter gives contractors little time to comply. This, coupled with the Agency’s directive regarding limited approval of extension requests seemingly puts contractors between a rock and a hard place. Hopefully, the Agency recognizes this and will deem timing of the release of the updated audit letter an “extraordinary” circumstance justifying additional time to respond.

The Agency directs contractors to its OFCCP’s Frequently Asked Questions for further guidance and assistance with questions on the new letter.

Stay tuned for additional thoughts and insights as we continue to evaluate and monitor this development.

On August 3, the Office of Federal Contract Compliance Programs (OFCCP) published its final Pre-Enforcement Notice and Conciliation Procedures rule in the Federal Register.  It will go into effect on September 5, 2023.  OFCCP will host an informational session regarding the rule on September 5, 2023.

OFCCP issued this final rule after collecting comments on proposed changes to the enforcement process from the public and interested stakeholders.  However, the public’s comments resulted in little change to OFCCP’s initial proposed rule. 

So, what’s in the final rule?

  • New enforcement procedures and factual showings.  The final rule modifies the  Nondiscrimination Obligations of Federal Contractors and Subcontractors: Procedures to Resolve Potential Employment Discrimination rule published in 2020.
  • “Quantitative” and “qualitative” evidence requirements.  The 2020 rule required OFCCP provide “quantitative” and “qualitative” evidence to support either a preliminary finding of discrimination or a finding of discrimination in a Notice of Violation and defined those terms.  The final rule eliminates the requirement for these factual showings — giving the Agency more flexibility on what basis to bring its cases.
  • Use of practical significance.  The final rule removes the requirement for OFCCP to demonstrate practical significance prior to issuing a Predetermination Notice (PDN).
  • Sharing statistical models and variables.  The final rule removes the 2020 rule requirement that “upon the contractor’s request, OFCCP must provide the model and variables used in any statistical analysis and an explanation for why any variable proposed by the contractor was excluded from that analysis.” 
  • “Preliminary findings of potential discrimination.”  In a change from its initial proposal, the final rule shifts the appropriate standard to issue a Predetermination Notice from “indicators of discrimination” to a “preliminary finding of discrimination.”  While OFCCP’s Summary of the Final Rule accompanying the final rule suggests this is a clarification, the change addresses concerns that OFCCP may prematurely issue a Predetermination Notice before an audit is advanced enough to identify likely discrimination.
  • 15-day response time.  The 2020 rule permits contractors thirty days to respond to a Predetermination Notice, but the final rule reduces this window to only 15-days.  Even so, the final rule permits additional time to respond when “good cause” exists for the extension.
  • Additional violations.  The final rule allows OFCCP to add violations in a subsequent Notice of Violation without amending the Pretermination Notice, and in a subsequent Show Cause Notice without amending the Notice of Violation.
  • Use of Notice to Show Cause.  The final rule allows OFCCP to skip a Predetermination Notice or Notice of Violation to issue a Show Cause Notice directly when a contractor denies the Agency’s access to facilities or refuses to provide information during a compliance evaluation.

Despite these changes, OFCCP’s Summary of the Final Rule accompanying the final rule commits to:

  1. “Describe the preliminary findings of potential discrimination and any other potential violations to enable the contractor to understand OFCCP’s position and provide a substantive response,”
  2. “[U]tilize the concept of practical significance where appropriate, along with statistical significance, and all other evidence gathered in the review, as part of a holistic approach that applies the case law and statistical techniques as they evolve to the compliance evaluations it investigates, conciliates, and refers for enforcement.”
  3. “[E]xplain its statistical analysis in sufficient detail for the contractor to replicate the analysis and assess the merits of the agency’s findings. OFCCP will also continue to explain its rationale for excluding otherwise reasonable variables from its analysis.”
  4. “Provide contractors an opportunity to conciliate additional violations identified in the Show Cause Notice” that are omitted from a Predetermination Notice, and
  5. Protect due process by other “legal guardrails.”

In sum, the final rule restores additional flexibility to OFCCP in how to investigate and pursue cases—and removes the certainty for contractors from the 2020 rule.  In a larger context, this follows OFCCP’s commitment to increased enforcement under this administration. 

We will monitor how OFCCP interprets these new requirements once they are in effect.  In the meantime, if you have any questions about OFCCP compliance or enforcement, please contact Jackson Lewis to discuss your specific questions.

As previously reported, on August 4, 2023, OFCCP published a final rule titled “Pre-enforcement Notice and Conciliation Procedures” commonly referred to as the Pre-Determination (PDN) rule. The final rule will go into effect on September 5, 2023. OFCCP announced today it will hold an informational session discussing the new rule at 2:00PM Eastern that same day.

The e-mail notice reinforced OFCCP’s belief that

[t]he final rule strengthens OFCCP’s enforcement by rescinding the evidentiary standards and definitions in an earlier rule, “Nondiscrimination Obligations of Federal Contractors and Subcontractors: Procedures to Resolve Potential Employment Discrimination,” which took effect in December 2020.

Registration for the webinar can be found Here.

As all good things must do, the this year’s NILG National Conference has come to a close. As is tradition at this point, the last morning of the conference featured a panel of OFCCP’s Regional Directors, including Diana Sen (Northeast), Carmen Navarro (Midwest), Jane Suhr (Pacific & SWARM), Aida Collins (Southeast), and Sam Maiden (Mid-Atlantic). The panel, moderated by NILG Board Member Valerie Vickers, discussed hot issues, and answered specific questions about compensation, artificial intelligence, transparency, and self-identification, among others – all topics that fostered robust discussion throughout the conference.

The Regional Directors echoed a number of messages shared by interim OFCCP Director Michelle Hodge to open the conference, including the desire to work with contractors to resolve matters early on in the audit process as well as the training being administered for new compliance officers. They also reiterated the agency’s focus on obtaining timely and complete submissions from contractors during the audit process speaking specifically about the Agency’s approach to looking at all components of pay – not just base and bonus, and the Agency’s work to ensure contractors who utilize artificial intelligence are in compliance with their nondiscrimination obligations.

Director Sen shared details as to the Agency’s process for analyzing compensation, including the regions routine collaboration with the national office, including standing meetings with the Bureau of Enforcement Statistics.

Channeling the “Transforming for Tomorrow” theme of the conference, the regional directors each shared a “promising practice or issue.” Director Collins is finding early resolutions are making a difference while Director Sen shared promising practices observed by compliance officers in Corporate Management Compliance Evaluations (CMCE). Director Navarro encouraged contractors to fully implement their AAPs prior to audits and both Directors Suhr and Maiden highlighted the technical assistance offerings of the Agency for contractors to use to get into compliance, something further highlighted by each Director as the panel concluded.

In closing, Val thanked each of the Directors for their participation and acknowledged

“these conferences would not be as rich without OFCCP.”

This week was undoubtedly thought-provoking and full of knowledge, insights and information sharing. We look forward to doing it again next year and hope to see you all in 2024 in Orlando!

The second day of the NILG 2023 National Conference did not disappoint.  The day kicked off with regional ILG’s breakfasting with their respective OFCCP Regional Directors followed by a keynote address from EEOC Chair Charlotte Burrows.

Chair Burrows opened her remarks by thanking NILG for being a “steadfast partner” in the important work EEOC does to ensure equal employment opportunity and that all Americans are “treated with basic human dignity in the workplace.”  She noted there is a “great deal of work left to be done” as the Agency tries to fulfill the promise of equality but declared EEOC is doing everything it can.

Specifically, Chair Burrows discussed EEOC’s focus on “tackling systemic discrimination in all of its forms” which includes the Agency’s 5 year strategic enforcement plan, developing guidance on how to handle harassment after the Me Too movement, Bostock, and the pandemic. She also described the Agency’s focus on the construction industry which she recognized is “new” for the Agency.

With respect to a topic on everyone’s mind, pay data reporting, Chair Burrows reported the Agency is carefully considering the National Academy of Sciences’ report to ensure they “get this right.” She declined to say much more as not to “get ahead of the Commission’s process” but previewed we will be hearing more from the Agency as it seeks stakeholder input as part of its process. She did state she believes pay data reporting is “something they are moving towards.”

Chair Burrows went on to speak about the various inter-agency partnerships EEOC has and described in detail the work it is doing in connection with several initiatives including the Pregnant Workers Fairness Act.

In closing, Chair Burrows recounted the way the publication of Martin Luther King’s Letters from a Birmingham Jail came about and reflected that implementation of those “things that matter, the things that make a difference”, maybe tedious but “when you put it all together at the end its magical.”

As was the case with Day 1, Day 2 of the conference was packed full of informative and thought-provoking sessions, including an Agency update, several discussions about artificial intelligence, the impact of the United States Supreme Court Students for Fair Housing decision and implications for DEI programs amongst others.

As we head into the evening’s festivities and prepare for the final day of the conference its hard to not reflect on Chair Burrows’ final remark of the morning that the work we undertake “will make amazing differences in the workplace.”

As previewed yesterday in OFCCP Interim Director Michelle Hodge’s keynote remarks during the opening day of the NILG 2023 National Conference, OFCCP has released the final rule on “procedures for identifying and remedying discrimination in federal contracting.” Commonly referred to as the PDN rule, the Pre-Enforcement Notice and Conciliation Procedures rule will be officially published in the federal register on August 4, 2023 and will go into effect on September 5, 2023.

Director Hodge announced the release of the final rule in a blog titled “Department of Labor Establishes Final Rule that Promotes Equal Employment Opportunity” in which she reports the new rule

restores flexibility to OFCCP’s pre-enforcement and conciliation procedures, promotes efficiency in resolving cases, strengthens enforcement and promotes alignment of the standards of Title VII of the Civil Rights Act of 1964.  

The new rule modifies the Agency’s earlier “Nondiscrimination Obligations of Federal Contractors and Subcontractors: Procedures to Resolve Potential Employment Discrimination” rule which took effect on December 10, 2020.

In an e-mail from OFCCP announcing the rule, the Agency stated

[t]he 2020 rule imposed inflexible evidentiary requirements early in the agency’s compliance evaluation process and attempted to codify complex definitions for “qualitative” and “quantitative” evidence and other standards. These evidentiary standards and definitions hindered OFCCP’s ability to pursue cases with merit and diverted agency and contractor resources away from addressing discrimination.

We are in the process of reviewing the final rule and will be back soon with further thoughts and insights.

Day One of the NILG 2023 National Conference is in full swing. Not deterred by the outdoor temperatures, conference attendees, presenters, vendors and Agency representatives enjoyed a first day’s agenda overflowing with informative sessions where “ideas are nurtured and knowledge is exchanged” as part of this year’s conference theme of “Transforming for Tomorrow.”

The Opening Ceremony started with a traditional dance from representatives of the Yellow Bird Apache Indians.

Acting OFCCP Director Michelle Hodge was the morning’s keynote speaker. Director Hodge opened her remarks by addressing the recent United States Supreme Court Decision addressing affirmative action in higher education admission programs, stating there is a

“bright line between that ruling and the work we do”.

She stated the work is “wholly distinct” and there continue to be lawful and appropriate ways to foster inclusive workplaces”. She shared her belief that “diversity is one of our country’s greatest strengths.”

 Director Hodge then went on to describe what contractors can expect from OFCCP. “Strengthening enforcement efficacy and efficiency” topped the list followed by modernization and tightening unnecessary extensions as well as strengthening data analytics, and agency hiring and training.

As far as Agency priorities, Director Hodge listed three specifically:

  1. Strengthen enforcement to protect underserved marginalized workers
  2. Dismantle hiring barriers
  3. Expand outreach and education outreach efforts  

Spending a good deal of her remarks on the first item, Director Hodge shared statistics about OFCCP contractor portal compliance, discussed the agency’s focus and perspective on contractors’ compliance obligations with respect to use of artificial intelligence in the hiring process and the state of OFCCP’s rulemaking efforts. Director Hodge shared that the final PDN rule should be released in the coming days. She noted the rule will “restore” the Agency’s flexibility in audits but also “continue to promote transparency and consistency by requiring continued use of the PDN.”

In closing, highlighting the conference theme by noting “the time is now to transform for tomorrow,” Director Hodge invited conference attendees to “reflect on your workplace programs“ and to ask the question “does the intent of your policies in practice remove barriers or create them?” 

The remainder of the day was filled with thought-provoking sessions on a wide variety of topics, including OFCCP’s approach to pay in audits, artificial intelligence, disability accommodations, ESG, OFCCP enforcement statistics and audit trends, military recruitment best practices and a whole host of other informative discussions.

We are looking forward to Day Two which will kick off with an address from EEOC Chair Charlotte Burrows.

Have a great evening and we’ll see you tomorrow!

As a reminder, the deadline to implement the latest, updated version of the Section 503 voluntary disability self-ID form is July 25, 2023.

The OMB approved revised form, including versions in various languages, is available on OFCCP’s website.

OFCCP also provides a number of Frequently Asked Questions regarding implementation of the form that contractors may find useful, including information on what may and may not be altered with implementation of the form.