OFCCP released today a new list of supply and services contractors and subcontractors selected for audit (FY 2024 CSAL Supply & Service Scheduling List, Release – 1). The list identifies 500 compliance reviews among approximately 462 companies.

The Agency also published an explanation of the methodology used to select a pool of the contractors and subcontractors for review, which included a review of eligible contractors’ 2021 EEO-1 filings to prioritize locations with the highest employee count in each district office’s jurisdiction.

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 be back soon with more insights.

As organizations are preparing and filing the 2023 EEO-1 Data Collection reports, (deadline is June 4th) there’s a change on the horizon for future reporting.

For the first time in over twenty-five years, in March, 2024 the Office of Management and Budget (OMB) published  a set of proposed revisions to Statistical Policy Directive No. 15: Standards for Maintaining, Collecting, and Presenting Federal Data on Race and Ethnicity (“Revised SPD 15”).  While these revisions were long overdue, not much has (or will) change soon.

Recognizing that race and ethnicity are “socialpolitical constructs,” and acknowledging the increased racial and ethnic diversity of the country, in June 2022 OMB established a working group, and started a formal review of its race and ethnic categories to better reflect how several federal agencies, including EEOC and OFCCP, view and analyze demographic data. The Revised SPD 15 is the product of this review.

While SPD 15 has many changes and is the culmination of years of research, here are a few of the proposal highlight:

  • The requirement to collect Hispanic ethnicity separately from other races would be no more!   After considering a series of cognitive interviews conducted  by its working group, and research conducted by the Census Bureau in preparation for the 2020 census collection, OMB determined that race and ethnicity will be combined into a single question, citing that this approach “reduced confusion and improved data quality.”
  • “Middle Eastern or North African (MENA)” would be its own separate race/ethnicity category.  Previously, individuals who traced their ancestry to the Middle East or North Africa were defined and tabulated within the “White” category. Public comments reflected concerns that the White classification “did not reflect the reality” of many individuals who identify as MENA, and research conducted by federal agencies confirmed broad public support for having a distinct category, so the change was implemented.
  • Words Matter: Terminology updates. The Revised SPD 15 would change outdated terms. For example, “majority” and “minority” would no longer be used, except when statistically accurate. The term “Far East” in the “Asian” category definition would be replaced by “East Asian”.
  • Focus on multiple identities. The Revised SPD 15 emphasizes that reporting multiple categories would not only allowed, but would be “encouraged.”

To be clear, no immediate action is required. Federal Agencies need to first create plans to bring their respective agencies into compliance and submit these plans for OMB’s review next year ( within 18 months of proposal). The Agencies will have 5 years (until 2029) to implement the new rules. As a result, we do not yet know how EEOC or OFCCP will interpret and implement SPD 15. In the meantime, employers should be aware of the new requirements, and start strategizing how they may fit into their current data collection practices and objectives to create a smooth roll out plan for the new data gathering.

Please contact a Jackson Lewis attorney if you have any questions about these developments or need assistance.

OFCCP announced this morning the release of a new Artificial Intelligence (“AI”) landing page. The landing page, which encourages readers to “check back often for updates” contains links to the Agency’s thoughts about the use of AI in federal contractors’ employment processes. 

Following a link labeled Artificial Intelligence and Equal Employment Opportunity for Federal Contractors the Agency provides ten “frequently asked questions” followed by a list of “promising practices” for the development and use of AI by federal contractors. These practices “while not expressly required, actions contractors may consider to help avoid potential harm to workers and promote trustworthy development and use of AI.” The practices include suggestions on the use of AI in the equal employment opportunity context, obtaining a vendor-created AI system, and accessibility and disability inclusion in the AI space.

This new guidance comes just weeks after OFCCP signed onto a joint statement with other Federal Agencies to protect the public from unlawful bias in automated systems earlier this month.  A link to the joint statement is also available on OFCCP’s AI landing page.

We are in the process of digesting the new FAQs and “promising practices” so stay tuned for additional thoughts and insights.

Effective March 31, 2024, the VEVRAA hiring benchmark will be 5.2%. The new benchmark is 0.2% lower than the previous benchmark of 5.4% and continues the Agency’s trend of reducing the benchmark each year. Since it’s inception in 2014, the benchmark has steadily declined, never once being increased by the Agency.

OFCCP has released additional resources to assist contractors with the setting and utilization of the hiring benchmark which are available on the VEVRAA Hiring Benchmark landing page.

As a reminder, covered government contractors have an obligation to create annual establish a veteran hiring benchmark as part of the preparation and implementation of its VEVRAA Affirmative Action Plan.

OFCCP has updated its Contractor Portal website with details for this year’s certification cycle.

Per the website

Beginning April 1, 2024, federal contractors will be able to certify the status of their AAPs for each establishment and/or functional/business unit, as applicable. The deadline for certifying compliance is July 1, 2024.

OFCCP has shifted the opening of the portal from March 31 to April 1. As a result, those contractors with April 1 affirmative action plan year dates will no longer be able to certify compliance prior to the expiration of their current AAP year.

In addition to announcing the new portal opening date, OFCCP has also released updated FAQs.

OFCCP directs contractors to the Portal Help Desk for answers to a number of questions, including those involving EEO-1 numbers and registering new entities. Given the backlog experienced in previous years, it might be best to reach out to the Help Desk as soon as you identify an issue.

OFCCP’s FAQs also continue to instruct contractors they need not certify establishments with less than 50 employees if a separate AAP is not prepared for that establishment:

10. Do I have to include my establishment in the Contractor Portal if it has fewer than 50 employees?

It depends on whether the establishment maintains a separate AAP. If the establishment has fewer than 50 employees and maintains an AAP only for those employees, it must be included in the Contractor Portal. See 41 CFR 60-2.1(d)(2) (describing which employees should be covered in an AAP). If the establishment has fewer than 50 employees and does not maintain an AAP only for those employees, the contractor does not need to list the establishment in the Contractor Portal.

To be clear however, employees in sub-50 establishments need to be included in an AAP, even if it is not a separate AAP for that establishment.

We will continue to monitor for additional information as this year’s certification process unfolds and will provide updates as needed.

In 2023, the OFCCP demonstrated renewed vigor in audits, recovering $17.3 million from federal contractors for alleged hiring and compensation discrimination. It also was a year of churn, challenge, and change as the agency updated procedures for discrimination complaints, managed a massive FOIA request for EEO-1 reports and accompanying litigation, and rolled out a new scheduling letter requiring substantially more information from contractors at the outset of an audit. Listen to our podcast episode as we review the OFCCP’s activities in 2023 and provide a glimpse into what employers can expect in 2024.

EEOC has updated its EEO-1 data collection website to announce the data collection for the 2023 EEO-1 Component 1 reports will open April 30, 2024. The Agency has set June 4, 2024 as the deadline for reporting.

The notice also indicates the “online Filer Support Message Center (i.e., filer help desk) will also be available on Tuesday, April 30, 2024, to assist filers with any questions they may have regarding the 2023 collection.”

Further information about data specifics and other filing instructions are not yet available.

As a reminder, employers with 100 or more employees are required to file the annual EEO-1 Component 1 report. The filing requirement applies to federal contractors with 50 or more employees.

We will continue to monitor the situation and provide updates as information becomes available.

As previously reported, in December 2023, the U.S. Department of Labor, Office of Federal Contract Compliance Programs (OFCCP) was ordered to release the EEO-1 reports of federal contractors it had withheld from production in response to the Center for Investigative Reporting’s Freedom of Information Act (FOIA) request for the records.

The United States Attorneys’ office representing OFCCP filed a Notice of Appeal on February 15, 2024 seeking judicial review of the Order. The government is seeking a stay of the February 20, 2024 disclosure deadline pending the appeal.

We will continue to monitor and share any additional updates as they become available.

In recognition of the 15th anniversary of the Lilly Ledbetter Fair Pay Act, the Biden Administration has released a proposal that would prohibit federal contractors from using a job applicant’s prior salary history when setting pay and require federal contractors to post the expected salary range in its job postings. >>Learn more here.

In recognition of the 15th anniversary of the Lilly Ledbetter Fair Pay Act, the Biden administration released on Monday, January 29th, a Notice of Proposed Rule Making (NPRM) that would prohibit federal contractors from using job applicant’s prior salary history when setting pay and would require federal contractors to post the expected salary range in its job postings.

The proposed rule will:

  1. prohibit contractors and subcontractors from seeking and considering information about job applicants’ compensation history when making employment decisions about personnel working on or in connection with a government contract; and
  2. require contractors and subcontractors to disclose, in all advertisements for job openings involving work on or in connection with a government contract placed by or on behalf of the contractor or subcontractor, the compensation to be offered to the hired applicant, for any position to perform work on or in connection with the contract.

There is also a proposed mechanism for applicants to submit a complaint for contractor noncompliance, which will be investigated by the contracting agency and forwarded to OFCCP if the complaint alleges discrimination.

The proposed rule is open for public comment until April 1, 2024.

Our Affirmative Action, OFCCP and Government Contract Compliance Practice Group and Pay Equity Resource Group are partnering to digest the proposed rule and will release further details and insights.