Director Leen Shares OFCCP Update

OFCCP Director Craig Leen thinks the Agency has made good progress on implementing “the four pillars” but there is still work to be done.

Speaking this week in Florida, Director Leen shared accomplishments, and things to come, for each of the four tenants.  However, he noted he was not allowed to comment on the pending proposed changes to the scheduling letters.

Transparency

Referring to it as the “linchpin” of all of the pillars, Director Leen enumerated some of the item the Agency has done to be more transparent (e.g. publication of the scheduling methodology and posting of conciliation agreements) as well as discussed additional guidance and information soon to be released.

These items include Technical Assistance Guides for higher education, compensation and “at  least one other.”  He also previewed that the agency is working on an update to the FCCM (Federal Contractor Compliance Manual) to be released “hopefully soon.”

He also reiterated that OFCCP is putting out new FAQs to provide contractors with additional guidance, including new ones on apprenticeship programs, military spouses and use of the national interest exemption for contractors who are requested to provide services in response to natural disasters.  Director Leen has also been very transparent about his thoughts on the important of practical significance in addition to statistical significance and shared the agency will soon be releasing an FAQ addressing that topic as well.

Director Leen also indicated additional guidance for Focused Reviews will be coming – reiterating on-sites for the current round of Section 503 Focused reviews will not be scheduled before September.  He also confirmed the next round of audits will include VEVRAA focused reviews (evaluating the intersection of disability and veteran status) and then the Agency is planning to conduct focused reviews on organizations’ promotion processes, including promotions of individuals with disabilities.  Director Leen does not intend to target any specific industry, as has been reported, but plans to review across all industries.

Certainty

This second pillar “ties into transparency” and reflects the Rule of Law according to Director Leen.  For OFCCP that means engaging in the rulemaking process in the future, specifically TRICARE and religious exemptions in the near term, and “hopefully” something on PDNs and Notices of Violation.  Director Leen noted the absence of any mention in the regulations about the process before the issuance of a Show Cause.

He also spent time discussing the contractors request, and the need, for more guidance from the agency on compensation analyses, stating

If you don’t know how to put together a PAG [that will be acceptable to the Agency] there is no Rule of Law. . . If there is no clear guidance, how can you come into compliance in advance?

He hopes the forthcoming guidance from the agency will assist with certainty around this area.  Interestingly, Director Leen did not mention the Agency’s use of opinion letters.

Efficiency

Director Leen acknowledged he is focusing a lot on this pillar in FY2019, particularly in the area of resolving aged cases.  He believes aged cases disadvantage everyone involved, from contractors to the Agency but especially the employees.

Recognition

Finally, Director Leen reminded attendees that they Agency is working to develop recognition programs and invited feedback through the public comment process on the proposed programs.

 

EEOC Back In Business with New Quorum

As anticipated, the U.S. Senate has confirmed the nomination of Republican Janet Dhillon as the Chairwoman of the EEOC.  Ms. Dhillon joins Republican Victoria Lipnic, who has been Acting Chair, and Democrat Charlotte Burrows.  According to EEOC’s website, Ms. Burrows’ term ends July 1, 2019.

The bipartisan EEOC is comprised of a Chair, Vice Chair, three Commissioners and a General Counsel, each appointed by the President with the consent of the Senate.  With the appointment of Ms. Dhillon, the EEOC still has openings for the Vice Chair, two Commissioners and the General Counsel.

At the top of many of our minds is the pay data component of EEO-1 reporting, which is now due by September 30, 2019 for years 2017 and 2018.  The appointment of Ms. Dhillon does not have any immediate impact on the obligation of employers to comply with the pay data-reporting requirement.  However, EEOC filed a Notice in the pay data case (National Women’s Law Center v. Office of Management and Budget) notifying the court of Ms. Dhillon’s confirmation and stating,

[i]f, once a quorum is restored, the Commission takes action related to the Component 2 data collection that is the subject of this litigation, we will promptly notify the Court.

As always we will continue to monitor this case and bring you any important updates.

OFCCP Provides Resources for Compliance Checks

It’s time to start checking the mail.  As a sure indication of the Agency’s intention to soon start initiating audits from the FY2019 CSAL, OFCCP has published a new Compliance Check website.  OFCCP has published similar guidance for the Section 503 Focused Reviews.

In furtherance of its commitment to provide more technical assistance, OFCCP created with site “to help contractors prepare for compliance checks.”  The Agency describes Compliance Checks as

a type of compliance evaluation in which OFCCP seeks to determine whether the contractor has maintained certain records.

The website provides links to Frequently Asked Questions and a copy of the current letter contractors will receive when they are scheduled for a compliance check.  As we have previously reported, OFCCP has published for Notice and Comment proposed revisions to the Compliance Check scheduling letter.

In its FAQs, OFCCP clarifies the information it will review as part contractors of a Compliance Check.

  • prior year AAP results,
  • job advertisements (including state employment service listings), and
  • examples of accommodations for individuals with disabilities.

Importantly, as previously discussed, the FAQs note that during a compliance check,

OFCCP will also check the General Services Administration System for Award Management database to determine if a contractor has self‐certified that it has AAPs.

With respect to the “prior year AAP results” OFCCP is specifically looking for the following:

  • For Executive Order 11246, OFCCP will review the contractor’s report on goals for women and minorities, as well as the good faith efforts it undertook to remove barriers and expand employment opportunities for those groups.
  • Under the Section 503 and VEVRAA regulations, contractors must assess the effectiveness of their external outreach and recruitment efforts. See 41 CFR 60‐300.44(f)(3), 60‐741.44(f)(3). OFCCP will review the documentation of these assessments during a compliance check.

Our understanding is the scheduling of these Compliance Checks and other establishment reviews, is imminent as the 45 day grace period from the release of the CSAL list has come to an end and we’ve had reports of contractors receiving reach outs from the Agency confirmation contact information. These reach outs are a typical pre-cursor to the sending of a scheduling letter.

EEOC Provides Pay Data Reporting Update

The past few weeks have seen a flow of new developments involving the recently reinstated EEO-1 pay data reporting obligations.  And Friday, May 3rd, was no exception.  At the same time EEOC was announcing its decision to collect pay data for 2017 as well as 2018, the Office of Management and Budget (OMB) was filing a Notice of Appeal of Judge Tanya S. Chutkan’s Order reinstating the pay data reporting obligation.

EEOC has, however, posted a notice on its website taking the position the Notice of Appeal does not impact employers’ EEO-1 pay data reporting requirement, stating the following:

On May 3, 2019, the Department of Justice filed a Notice of Appeal in National Women’s Law Center.  The filing of this Notice of Appeal does not stay the district court orders or alter EEO-1 filers’ obligations to submit Component 2 data. EEO-1 filers should begin preparing to submit Component 2 data as described above.

In addition to posting the updated notice on its website, EEOC also filed the first of its required status reports with the Court.  The first of Defendant EEOC’s Report of Steps to Implement the EEO-1 Component 2 Data Collection, filed on May 3, 2019, details, among other things, the initial steps it has taken to comply with the Court’s Order to collect Component 2 (pay data) of the EEO-1 report by September 30, 2019.

As of Friday, EEOC reported it has selected a third party vendor, NORC at the University of Chicago, to develop the reporting tool and detailed how it will work with NORC in the coming weeks.  As part of these efforts, EEOC indicated:

[i]n the next three weeks, the EEOC plans to oversee preparation and planning for the launch
of the NORC email and phone helpdesk to assist filers with questions and concerns about the
collection of Component 2 data for 2017 and 2018. The EEOC anticipates that the helpdesk will
launch sometime in the next three weeks.

EEOC also notified the Court that the long-awaited confirmation of EEOC Commissioner Janet Dhillon may occur as early as next week.  Her nomination has been pending since June 2017.  With Dhillon’s confirmation, EEOC would finally have a quorum with three confirmed CommissionersActing Chair Victoria Lipnic and Charlotte Burrows.  Though two vacant seats would still remain.

We will continue to monitor this matter and will provide any updates as they become available.

EEOC Decides to Collect 2017 Pay Data In Addition to Data for 2018

One of the biggest outstanding questions about the recently reinstated pay data reporting obligation was whether employers will be required to provide more than one year of pay data during this reporting cycle.  EEOC has made its decision.  In an advance copy of a notice to be posted in the federal register May 3, EEOC puts employers on notice that it will seek to collect data for 2017 in addition to 2018.

EEO-1 filers should begin preparing to submit Component 2 data for calendar year 2017, in addition to data for calendar year 2018, by September 30, 2019, in light of the court’s recent decision in National Women’s Law Center, et al., v. Office of Management and Budget, et al., Civil Action No. 17-cv-2458 (D.D.C.). The EEOC expects to begin collecting EEO-1 Component 2 data for calendar years 2017 and 2018 in mid-July, 2019, and will notify filers of the precise date the survey will open as soon as it is available.

Judge Tanya Chutkan gave EEOC the option to collect 2017 and 2018 data during the 2019 reporting cycle, or to collect 2018 data this year and 2019 data by March 31, 2019.

This is a developing story.  Additional updates will be forthcoming.

EEOC Posts Notice About EEO-1 Pay Data Reporting As Required

As ordered by Judge Tanya S. Chutkan, EEOC has posted the following notice on its website alerting employers to the new EEO-1 pay data requirement.  The Notice indicates EEOC has not yet decided whether it will collect 2017 or 2019 data in addition to the current year of pay data.  EEOC has until May 3 to report its decision on this point to the Court and employers.

Notice of Immediate Reinstatement of Revised EEO-1: Pay Data Collection

EEO-1 filers should begin preparing to submit Component 2 data for calendar year 2018 by September 30, 2019, in light of the court’s recent decision in National Women’s Law Center, et al., v. Office of Management and Budget, et al., Civil Action No. 17-cv-2458 (D.D.C.).  The EEOC expects to begin collecting EEO-1 Component 2 data for calendar year 2018 in mid-July, 2019, and will notify filers of the precise date the survey will open as soon as it is available.  Filers should continue to use the currently open EEO-1 portal to submit Component 1 data from 2018 by May 31, 2019. 

As a result of the court vacating the Office of Management and Budget’s stay of Component 2, the EEOC will also collect Component 2 data for either calendar year 2017 or calendar year 2019, and will post an additional notice by May 3, 2019, announcing its decision.

We will provide an update as soon as additional information is available.

Additional Pay Data Reporting Order Details

It’s here and it’s real.  The written order memorializing Judge Chutkan’s oral Order setting the September 30, 2019 deadline for collection of employer pay data reveals these additional details:

 

  • EEOC is ordered to collect EEO-1 Component 2 pay data for calendar years 2017 and 2018

 

  • In lieu of collection of Component 2 data for calendar year 2017, EEOC may satisfy the court’s Order requiring two years of data by collecting EEO-1 Component 2 data for 2019 during the 2020 EEO-1 reporting period.

 

  • If EEOC determines chooses to collect EEO-1 Component 2 data for 2019 instead of 2017, it must notify the court and Plaintiffs of that decision by May 3, 2019.

 

  • EEOC must inform employers by April 29, 2019 via their EEOC’s website and publication in the Federal Register that 2018 Component 2 is due by September 30, 2019. It must report at that time if it has decided whether to collect 2017 or 2019 data in addition to 2018 data. If it has not, it must decide and inform employers by May 3, 2019 of its decision.

 

  • EEOC must file 3 week status updates with the Court on its progress of collection of 2018 Component 2 data beginning May 3, 2019.

 

  • The EEO-1 Component 2 data collection(s) will not be deemed complete, for the purpose of the Order, until the percentage of EEO-1 reporters that have submitted their required EEO-1 Component 2 reports equals or exceeds the mean percentage of EEO-1 reporters that actually submitted EEO-1 reports in each of the past four reporting years.

 

  • The Paperwork Reduction Act approval for the revised EEO-1 form including Component 2 pay data, OMB Control No. 3046- 0007, shall expire no later than April 5, 2021 – instead of the current September 30, 2019 expiration.

There is a lot to unpack here but the gist of it is EEOC needs  to collect 2018 pay data by September 30, 2019.  It also has to collect a second year of pay data.  It can decide whether it wants to collect either 2017 or 2019 pay data and must let employers know by May 3, 2019 which year they will be collecting.  Their obligation to collect both years of data will not be satisfied until a certain threshold of filers is achieved.  The authorization to collect the data is extended until April 2021 which would give the Agency the time to comply with the Order without the authorization to collect expiring.  EEOC must provide regular updates to the Court on the progress of the data collection.

We will continue to monitor this developing story and will provide additional information, including details of EEOC’s notices, as they become available next week.

Breaking News: Judge Orders EEOC to Collect Pay Data by September 30th

Judge Tanya S. Chutkan has ordered initial compliance with the EEO-1 pay data reporting obligation by September 30, 2019.

As we previously reported, the EEOC has informed the court it could complete collection of data by September 30th by utilizing the services of a third party vendor, though there would be quality and integrity concerns.  As proposed, the data collection would begin July 15th.

Plaintiffs had urged the court to require collection by May 31 – the deadline for filing of the current Component 1 portion of the form.

Questions remain around the reporting process, including instructions from EEOC about reporting logistics and other practical considerations – like whether it will be collecting 2017 and 2018 data or just 2018 data.  There is also the possibility of an appeal in the current litigation which may impact the reporting deadline.  But based on Judge Chutkan’s order today, however, employers will need to start working on complying with the reporting obligations for this year.

We will continue to analyze and interpret the written order and forthcoming information from EEOC and provide additional insights in the coming days.

OFCCP Establishment Review Scheduling Letter Updates

This, our third and final blog in a series discussing the proposed changes to OFCCP’s scheduling letters, takes a look at the Agency’s proposed changes to the establishment review letter and itemized listing.

With the appearance of Focused Reviews and Compliance Checks on this year’s CSAL, contractors have been abuzz about their obligations associated with these “new” reviews. Though the vast majority of contractors will undergo a standard establishment review, these have not garnered much attention given the relative “routine” nature of the audits. Yet, as we previously indicated, OFCCP has recently released a proposed establishment review scheduling letter and itemized listing, which would change a number of the requirements that contractors have come to know and expect.

While the majority of the proposed changes appear in the itemized listing, there is one notable change to the scheduling letter. OFCCP requires in the new letter a list of the contractor’s largest subcontracts based on value. The likely rationale for this item is because, historically, and admittedly, OFCCP has had difficulty identifying and extending its compliance reach to subcontractors. Contractors identifying their largest subcontractors for OFCCP would likely allow the Agency a means of better tracking, and more easily monitor, subcontractor compliance.

Below is a summary of the most significant changes to the proposed itemized listing.

  • Sub-Minority Utilization & Availability Data (Item 6): The proposed itemized listing requires information on the sub-minority self-identification of each employee in an AAP and applicable labor markets. OFCCP’s purpose here is to be able to determine whether there were substantial disparities in the utilization of any one particular minority group, or in the utilization women of a particular minority group, such that separate placement goals may be necessary. OFCCP cites 41 § CFR 60-2.16(d) as its authority for this requirement, but note the permissive language of this regulation: “a contractor may be required to establish separate goals for those groups” (emphasis added). It is currently unclear what standard OFCCP may apply to determine when the expressly required minority and female goals are insufficient and a contractor is to establish sub-minority goals.

 

  • Placements by Sub-Minority Group (Item 16): Keeping with the theme of evaluating goals at a sub-minority level, the proposed listing also requires contractors provide personnel activity, or “placement,” data by sub-minority group. This would permit OFCCP to evaluate the progress made on any underutilization sub-minority goals they may determine are required. Again, it is unclear whether setting sub-minority goals is a regulatory requirement.

 

  • Compensation Analyses (Item 7): While little has changed to the proposed submission of compensation data, the proposed listing separately requires contractors to provide “[r]esults of the most recent analysis of the compensation system(s) to determine whether there are gender-, race-, or ethnicity-based disparities” (emphasis added). The regulations, however, require that contractors “evaluate [applicable] compensation system(s) to determine whether there are gender-, race-, or ethnicity-based disparities.” 41 CFR § 60-2.17(b)(3) (emphasis added). Note that the regulations require an “evaluation” not an “analysis” so compliance with this item – if it is approved – may impose an additional, implicit burden beyond what the regulations require and may implicate production of analyses covered by the attorney-client privilege.

 

  • Employee Promotion “Pools” (Item 17): For those long-time OFCCP request watchers, the proposed listing again requests that contractors “provide the pool of candidates from which the promotions were selected by gender and by race/ethnicity.” The last time this was proposed, OFCCP withdrew its request due to the public comments. See Supporting Statement final 09 11 2014 (2011), at 20 (“While OFCCP believes records of employment activity, including promotions and terminations, are essential tools in investigating potential discrimination, the agency acknowledges challenges that contractors face in providing pools of candidates for promotions and terminations. Thus, OFCCP is eliminating the pool data requirements for promotion and termination activity.”). However, OFCCP’s current justification explains this new request to eliminate burden of post submission follow-up requests that “may” arise. See S and S Supporting Statement (2019), at 9.

 

  • Involuntary Terminations Summary Data (Item 17): The proposed listing requires contractors break out summary terminations data to identify which terminations were voluntary and which were involuntary. This change may materially reduce post-submission audit follow-up, and likely carries very little additional burden.

 

  • Expanded Data Submission Requirements (Items 9, 12, 17): Under the proposed listing, contractors who receive a scheduling letter more than 6 months into their plan year would have to submit additional personnel activity data and veteran and disability summary data for every completed month of the AAP plan year — not just data for the first six months, which could require contractors to engage in monthly data pulls instead of annual or six-month update collections.

As a reminder, OFCCP is requesting public comment on this and the other proposed scheduling letters. Comments will be accepted until June 11, and the existing letters are set to expire at the end of June. The changes to these letters are significant and will undoubtedly impact contractor preparation and production in a compliance review. Take advantage of this opportunity to be heard and provide feedback on these proposed changes.

OFCCP Proposes Revised Scheduling Letter for Compliance Checks

This is the second in our series of blogs on OFCCP’s proposed changes to its various scheduling letters.

Our previous publication focused on the Agency’s new Section 503 and VEVRAA Focused Reviews.  In addition to rolling out the new Focused Reviews, OFCCP has also revived the Compliance Check, which has not been used in recent years. There were 500 Compliance Checks on OFCCP’s recent CSAL list, published in March. Intended to evaluate whether contractors have maintained records consistent with their regulatory obligations, Compliance Checks are expected to be the least invasive of the OFCCP reviews and are “more limited in scope than a compliance review.”

Nevertheless, just as contractors began to acquaint themselves with the requirements under the Compliance Check scheduling letter, OFCCP has proposed a new version of the letter.

Though the existing and proposed letters are quite similar, the proposed letter contains small, but meaningful, changes that contractors should not overlook.

  • Item 1: While the existing letter requests “AAP results for the preceding year,” the new letter asks for           “[w]ritten AAPs” prepared in accordance with EO 11246, Section 503, and VEVRAA. In both versions, the regulatory cites refer to contractors’ record-keeping obligations, and a narrow reading suggests that contractors may not be required to submit quantitative analysis. However, the spirit of the request may be broader. OFCCP’s expansion of the request in the proposed scheduling letter to include “the written AAP,” rather than “results of the preceding year” seemingly provides additional insight into what OFCCP may be expecting with this item. However, since OFCCP has not used Compliance Checks in the past several years, what the current Agency expects – both under the existing and proposed scheduling letters – remains to be seen.

 

  • Item 3: Importantly, if the proposed letter is approved, OFCCP will require contractors to submit “[r]equests made for accommodations for persons with disabilities, whether the requests were denied or granted.” This differs from the language in the existing letter, which simply asks for examples of accommodations provided. Given the Agency’s heightened interest in Section 503, the expansion of this request comes as no surprise.

The second item, which requests examples of job advertisements, including listings with state employment services, remains unchanged, as is the option to either send the requested information to OFCCP or make it available on-site for OFCCP to review.

OFCCP is reporting it estimates it will take contractors

approximately 2 hours to retrieve and supply the requested information

in the revised compliance check letter.

Again, we encourage you to review this scheduling letter and, if you would like to, provide comments by June 11th.

Stay tuned for our next blog in this series which will discuss proposed changes to the establishment review scheduling letter.

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