By Laura A. Mitchell, James D. Mackey, and Suzanne Donnelly Corwin
As contractors start to see new scheduling letters arrive from OFCCP’s latest round of advance notification letters, OFCCP has new opportunities to demonstrate its commitment to transparency, through implementation of the Agency’s recently released Directive 2018-08: Transparency in OFCCP Compliance Activities. The Agency’s stated philosophy is that transparency should “guide OFCCP staff during every stage of the compliance evaluation, from beginning to end” and the Directive sets out the Agency’s roadmap for transparency in audits.
And it sounds like the Agency is preparing for more opportunities to test drive their road map. In recent testimony given to the U.S. Commission on Civil Rights, which is currently evaluating federal civil rights enforcement agencies, Acting Director Craig Leen shared his plans to increase the number of audits performed by the agency considerably this fiscal year – from fewer than 1,000 to around 3,500, and include focused reviews. Leen testified he hopes up to 500 of the reviews in the coming year will be focused reviews. As a reminder, OFCCP’s fiscal year runs from October 1 through September 30 each year.
As we previously shared, the Transparency Directive is a detailed explanation of roles, responsibilities and expectations for OFCCP and contractors going through OFCCP compliance reviews and addresses the following components of the audit process:
OFCCP will delay issuing Scheduling Letters until at least 45 days after issuing Corporate Scheduling Announcement Letters (“CSALs”) in order to afford contractors additional time to prepare for audit. Note, this means that for the most recent CSALS issued on September 7, OFCCP could have started issuing Scheduling Letters as soon as October 22 and we are aware of letters dated October 31, 2018.
Setting a collaborative tone from the start, OFCCP has committed to contacting contractors 15 days after issuing a Scheduling Letter to establish the point of contact, offer technical assistance, and explain what to expect during the audit. Importantly, upon request, contractors may take advantage of a one-time 30-day extension for submission of supporting data, provided that they submit the basic EO 11246, Section 503, and VEVRAA AAPs within the original 30-day timeline. However, contractors should note the directive points out that extensions for basic affirmative action plans will not be granted except in “extraordinary” circumstances.
Finally, OFCCP’s more generous timeline comes with a catch. Failure to submit AAPs or supporting data in a timely fashion will now result in the automatic and immediate issuance of a procedural Notice to Show Cause, which does not require approval from the National Office. While a Notice to Show Cause will not necessarily result in a Conciliation Agreement, any failure to submit materials in a timely manner must be documented in the Closure Letter.
Perhaps the most impactful change in the new Directive involves the streamlining of the Desk Audit stage. Where there are no indicators of discrimination, OFCCP aims to complete audits quickly: ideally, and in the majority of cases, within 45 days. In order to accomplish this goal, per the directive, OFCCP should initially limit information requests to those that “fulfill, and if necessary, clarify” data originally requested by the Scheduling Letter.
Notably, requests for information beyond the requirements of the Scheduling Letter and Itemized Listing should only occur after completion of the desk audit.
Should OFCCP find indications of discrimination during the Desk Audit, the compliance evaluation proceeds to the “Pre-Onsite” stage. OFCCP will make subsequent information requests to refine and analyze indicators. Contractors should be aware that these additional information requests “must include the basis for the request, be reasonably tailored to the areas of concern, and allow for a reasonable time to respond.” At this point, OFCCP must also provide the contractor with a high-level summary of preliminary indicators in its on-site confirmation letter.
Interestingly, OFCCP does not provide new guidance with respect to the on-site stage of the compliance evaluation.
After the on-site takes place, OFCCP will begin the Offsite review. Making clear its desire to be more collaborative and increase transparency, Compliance Officers are required to reach out to contractors at least once every 30 days to keep them apprised of the status of the audit.
OFCCP also intends to take a collaborative approach to resolve the audit. Importantly, this includes “sharing information and essential source data in electronic format” to allow the contractor to understand and replicate OFCCP’s findings, as well as making good faith efforts to engage with contractors to support conciliation efforts. Here, OFCCP suggests that it may entertain “innovative remedies including apprenticeship programs and proactive corporate-wide solutions.”
Time between Issuing CSALs to Scheduling Letter
Minimum of 45 Days
|OFCCP Contacts Contractor to Establish Primary Contact, provide opportunity for technical assistance
||15 Days after issuing Scheduling Letter
|Additional Time for Supporting Data Submission
||30 Days Upon Request
|Time to Respond to Incomplete AAP Submission
||15 Additional Days
|Time to Respond to a Notice to Show Cause
||30 Days from Receipt
The bottom line: per the Directive, contractors should expect additional transparency and certainty when undergoing an audit, as well as a more efficient, collaborative OFCCP. OFCCP’s new Directive presents a clear roadmap from CSAL to Desk Audit to Onsite to Resolution. While contractors have additional tools, increased transparency, and a more collaborative Agency than employers have seen in recent years, they should still work proactively to achieve and maintain compliance.
For the latest updates in OFCCP Compliance, please stay tuned.