Breaking News: OFCCP Could Be Close To Rescinding Current Compensation Directive

Bloomberg Law is reporting OFCCP may soon rescind the controversial Directive 307, which has been in place since early 2013, and sets out the Agency’s current methodology for analyzing pay.  In its place, Bloomberg reports OFCCP will direct compliance officers to review compensation based on pay groupings established by the contractor.  If the directive is rescinded and replaced as being reported, this would be the end to what some have deemed a failed experiment at OFCCP and seemingly return the agency to firmer ground for its pay analyses.

We are aware OFCCP Director Ondray Harris and Special Advisor Craig Leen have recently been reviewing and evaluating OFCCP’s approach to compensation.  If issued in the coming days, this would be the second directive issued under Director Harris’ leadership of the Agency.

As soon as we receive confirmation of the rescission and have an opportunity to review any new directive that is issued we will provide an update and our insights.

OFCCP Discloses Audit Scheduling Methodology

In another show of transparency, OFCCP has released a detail description of its process for selecting contractors for audit.  The two-page document walks through, step-by-step, the process OFCCP undertook to identify establishments for the “first release of the FY 2018 Supply and Service scheduling list.”  As the release explains, OFCCP is not required to make these disclosures but decided to do so voluntarily.

As a first point to note, description describes this as first release, indicating, not surprisingly, that there likely will be a second round of scheduling occurring later this fiscal year.

The description then moves into detail about how they bucket contractors based on organizational relationship and how the Agency takes into consideration, employee count, contract details and other factors.

Finally, the description notes that once the establishments were identified, they were randomly ordered, uploaded into the Case Management System and, if necessary,

appended to district offices’ lists of unscheduled establishments. OFCCP does not purge unscheduled cases from prior lists before releasing a new scheduling list.” 

This last section explains why contractors may be seeing scheduling letters without first receiving a CSAL.  Because the unscheduled cases are not purged, they remain in the system, and thus might be added to the list, even though they were not newly selected.

As OFCCP continues to provide new and additional information we will be sure to update.

OFCCP Reduces Veteran Hiring Benchmark

OFCCP has announced the new Veteran Hiring benchmark will be 6.4% effective March 31, 2018.  Affirmative Action Plans in effect until the March 31, 2018 date should utilize the prior year’s benchmark of 6.7%.

The benchmark has steadily declined since its inception in 2014 and this year is the fourth reduction of the benchmark since it was first released.  This year’s drop of 0.3% is the largest single-year reduction of the benchmark and represents a 0.8% decrease since its high point in 2014.

The historical review of the annual national percentages as reported on OFCCP’s website is as follow:

Percentage Effective Date
From To
6.4 03/31/2018
6.7 03/31/2017 03/30/2018
6.9 03/04/2016 03/30/2017
7 04/21/2015 03/03/2016
7.2 03/24/2014 04/20/2015

OFCCP Wants Your Feedback

If you’ve e-mailed anything to OFCCP in connection with a compliance review in the past 5 years you likely received a message recently letting you know about OFCCP’s upcoming survey.  As it did several years ago, OFCCP will be asking a select group of contractors to provide feedback on how the agency is doing and to make suggestions on improvements.  Not all contractors will be selected to receive the survey, but for those that are, the survey is scheduled to go out via e-mail over the next two weeks.

In furtherance of the collaborative tone and theme we’ve been hearing from Director Harris and the new OFCCP leadership team, OFCCP notes the purpose of the survey is specifically

to gather more information about how we can continue improving communication, transparency, and timeliness during our compliance evaluations.

The survey appears to pose a unique opportunity for contractors to share their thoughts with the Agency in the hopes of influencing policy and process changes.

Concerns about anonymity and data security we raised last time OFCCP promulgated a survey.  OFCCP explained in today’s e-mail the steps it has taken to address these concerns, which include:

  • selecting the option in SurveyMonkey that makes survey responses anonymous; and
  • not having SurveyMonkey not collect or share data with OFCCP that would personally identify survey respondents, including their IP address.

OFCCP also reiterated that compliance review scheduling is in no way impacted by survey participation nor will it have an impact on current reviews.

Questions regarding the survey should be directed to OFCCP-Customer-Exp-Survey@dol.gov.

 

Scheduling Letters Are In the Mail

When the Agency mailed the most recent round of CSALs in February 2018, it reported it would wait until March 19, 2018 to start issuing Scheduling Letters.  True to their word, we have learned that Scheduling Letters have started arriving, at least in some areas of the country.

As a reminder, OFCCP sends scheduling letters via certified mail to the HR manager at the location to be audited,  If you received a CSAL you should make sure those that receive mail at the location are on the look out.  Once the letters are received, Contractors have 30 days to submit the requested AAP and itemized data.  With the advance notification provided by the CSAL and waiting until now to send out the Scheduling Letters the Agency believes contractors have had ample time to prepare for the audits and hold the expectation contractors will be able to comply with the submission requirements in the provided response window.  As a result, it has posted on its website that

Given this advance notice, extensions to submit the AAP will not be granted for routine business reasons and [will] generally be limited to 15 days.

Under the leadership of Director Ondray Harris, OFCCP is working hard to restore its relationship with the contractor community.  With that said, they are still an enforcement agency with a job to do.  And initiating audits is the primary way it achieves its goal of evaluating the compliance of federal contractors.  It will be interesting to see what impact Director Harris and his vision for the Agency have on how these audits are conducted once they are initiated. We’ll be sure to bring you any updates or insights as we learn of them.

OFCCP Funding to Remain at Same Level

In the new spending bill passed by Congress and approved by President Trump last week, OFCCP will receive essentially the amount of funding as it has in previous years.  As signed by the President, the budget has $103,476,000 allocated to OFCCP, which is comparable to the $103,767,000 for FY2018, and significantly up from the $91 in the President’s proposed budget.  The one sentence appropriation for OFCCP can be found on page 886 of the 2232 page bill.

It remains to be seen whether, despite the reprieve from budget cuts, OFCCP will continue considering cost-saving measures such as the potential closure of district offices.  As we learn more we’ll be sure to update with any developments.

OFCCP Issues New Directive in Furtherance of Commitment to Increased Transparency

by Laura A. Mitchell and Christopher T. Patrick

Under the leadership of new OFCCP Director Ondray Harris, the Agency has issued its first policy directive of 2018. Directive 2018-01, effective February 27, addresses an area of concern discussed at length during the Agency’s listening sessions earlier this year: the need for increased transparency.

The Directive instructs all OFCCP offices to issue a Predetermination Notice (“PDN”) prior to issuing a Notice of Violations when the Agency has concluded its review and believes findings of discrimination may be appropriate. A PDN is a letter OFCCP uses to inform contractors of the Agency’s preliminary findings of employment discrimination and serves as a way to provide contractors an opportunity to respond to preliminary findings prior to OFCCP deciding to issue discrimination violations.

Before the Directive, OFCCP

typically reserved use of the PDN for systemic discrimination cases and permitted regional and district offices discretion in whether to issue the PDN prior to issuing a Notice of Violation (NOV).

But now, PDNs are required and, it is Agency policy that,

OFCCP will issue PDNs for preliminary individual and systemic discrimination findings identified during the course of compliance evaluations.

This is welcome news for contractors facing aggressive, protracted compliance reviews in which it was uncertain whether they would have notice of OFCCP’s preliminary findings. This additional step in the process will hopefully foster an open dialog between contractors and OFCCP to clarify misunderstandings and correct errors in analyses.

The Directive also suggests increased National Office oversight and review of potential violations before the Agency concludes that discrimination violations are appropriate – requiring that the regional Solicitor review all PDNs and submit them to OFCCP’s national office for a “review and final decision.” It even halts violations that are drafted but not yet issued, and requires that local office issued a PDN instead so that the contractor may respond before any formal allegations of discrimination are issued.

While the ultimate impact of this Directive is still unclear, it an encouraging policy step in Director Harris’s young tenure.

This Directive is new, and it’s implementation still developing. The Directive indicates OFCCP will be updating the Federal Contractor Compliance Manual (FCCM) consistent with the Directive.  We will keep you posted as we learn more.

Federal Contractor Paid Sick Leave in Effect

As the first quarter of 2018 nears its end, and we are adjusting to an extra hour of daylight (and an hour less sleep this weekend) we wanted to take a moment to remind you about the Paid Sick Leave obligations that went into effect in January 2017 for covered contractors.   For a refresher of these obligations, check out the blog post my colleague Megan Holstein and I recently posted.

As a reminder, contracts entered into after January 1, 2017 that fall into one of these four categories are subject to these obligations:

  1. procurement contracts for construction covered by the Davis-Bacon Act (DBA);
  2. services contracts covered by the Service Contract Act (SCA);
  3. concessions contracts, including any concessions contract excluded from the SCA by DOL’s regulations at 29 CFR 4.133(b);
  4. contracts in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.

If you haven’t already done so, check your contracts to confirm whether they contain reference to Executive Order 13706: Paid Sick Leave for Workers on Federal Contracts.

Public Advocacy Group Sues OFCCP in Connection with EEO-1 FOIA Requests

As we’ve been discussing, now is the time for employers to be filing their annual EEO-1 reports.  Coincidentally, and perhaps not un-intentionally, Public Citizen, a non profit advocacy group is also using this time to sue OFCCP around its practices of withholding information involving employers’ EEO-1 reports.

On February 26, Public Citizen filed suit in Washington D.C. District Court claiming that OFCCP improperly denied its Freedom of Information Act (FOIA) requests for information on who is looking into Employer EEO-1 data.

FOIA requires federal government agencies to disclose certain information under their control.  FOIA requests are subject to a number of exemptions that protect the release of private, classified, or personal data based upon different rationales.  Typically when we see FOIA requests involving OFCCP and EEO-1 reports, the requests are seeking release of EEO-1 data for specific employers.

Interestingly, Public Citizen’s lawsuit is not based upon accessing the substantive information contained in the EEO-1 Reports rather, it is seeking information on who else is submitting FOIA requests to try to access employer EEO-1 data and for what purposes these other parties are seeking the information.  In this case, OFCCP partially denied the Plaintiff’s FOIA request based upon its supposed policy of  withholding information regarding “open” (ongoing)  FOIA requests.   

“OFCCP advised that, as a matter of policy, it withholds all records related to “open” FOIA requests on the theory that they fall within the scope of FOIA exemption 7.

 Exemption 7 of FOIA allows government agencies to deny release of information if releasing the information “could reasonably be expected  to interfere with law enforcement proceedings.” The complaint in this case contends that the processing of FOIA requests by the Agency is not any kind of law enforcement proceeding and therefore violates the FOIA statute.

It will be interesting to see how OFCCP responds and whether they will ultimately be required to disclose the information.

 

UPDATE: EEOC Clarifies Change to EEO-1 Reporting for Employees at Client Sites

As we recently reported, the instructions for filing current EEO-1 reports includes a change to the reporting requirements for employees working at client sites.

Acknowledging confusion surrounding the instruction, EEOC presented the following today during a webinar held for members of the Industry Liaison Group community:

It has come to the EEOC’s attention that there may be some confusion as to how employers are to report employees working at client sites.  Some employers have been reporting the address of client sites for employees, while other employers have instead been rolling those employees up to a non-client site employer address.  Given this confusion, employers will not be considered “non-compliant” if they have chosen one approach over the other – either reporting by client site or by non-client site employer address. 

The EEOC noted it is currently reviewing how to address client site reporting. We will provide an update when additional clarification or direction is available.

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