The Office of Federal Contract Compliance Programs (OFCCP) has been working to revise the scheduling letter and itemized listing it uses to initiate compliance reviews of supply and service federal contractors and subcontractors. After considering public comments, the Office of Management and Budget (OMB) has released a new version of the proposed Scheduling Letter and Itemized Listing.

The modified proposal comes with an additional public comment period.
The public can submit comments on the new proposed Scheduling Letter and Itemized is until May 17, 2023. Once the comment period closes, OMB will start reviewing the proposed scheduling letter under the Paperwork Reduction Act. OFCCP will not be authorized to utilize the new scheduling letter until OMB grants its approval.

We are reviewing the proposed changes and will follow up with an updated blog post discussing them. Stay tuned!

OFCCP has once again updated the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) hiring benchmark. Effective March 31, 2023, the new veteran hiring benchmark (the percentage of total hires who are protected veterans that the contractor seeks to hire in the following AAP year) is 5.4%. This is a 0.1% decrease from the 5.5% mark set last year and continues the trend of reduced benchmarks. The database with previous benchmarks can be found here.

As a reminder, contractors required by VEVRAA to develop a written affirmative action program (AAP) must also establish a hiring benchmark for protected veterans every year, or adopt the national benchmark provided by the Office of Federal Contract Compliance Programs (OFCCP) each year, as part of their AAP update. Under either approach, contractors must compare the percentage of hires who are protected veterans in each of their written AAPs to the hiring benchmark set for that AAP. Contractors should use the result of this comparison when assessing the effectiveness of their veteran outreach and recruitment efforts.

Jenny Yang announced earlier today in a letter to OFCCP stakeholders that she will step down from her position as Director of the OFCCP, effective March 31, 2023. Director Yang will begin a new position as the Deputy Assistant to the President for Racial Justice and Equity at the White House Domestic Policy Council as of April 3, 2023. In her new role she will work on “a broad range of issues, including equal opportunity in employment, criminal justice, democracy and voting, disability policy, Native Affairs, racial wealth gap, and many others”

Director Yang announced that OFCCP Deputy Director Michele Hodge will serve as the Acting Director of the OFCCP after Director Yang concludes her tenure tomorrow. Director Yang stated that the OFCCP will continue to play “a critical role in the years ahead to ensure that our nation’s once-in-a-generation investments in our infrastructure and economy create opportunities for us all to access good jobs with family sustaining wages.”

We wish Director Yang the best of luck in her new endeavor and congratulate Deputy Director Hodge in her new role as Interim Director.

On March 20, 2023, the Office of Federal Contract Compliance Programs (OFCCP) announced that it will re-open the Contractor Portal on March 31, 2023. Once open, covered federal contractors and subcontractors must certify that they have developed and maintained AAPs before the June 29, 2023, deadline.

In a change from last year that should benefit the contractor community going forward, OFCCP will require contractors to provide its “AAP Coverage Period.” This new information will allow OFCCP to shift away from requiring certification by all contractors at the end of June each year and move to a rolling deadline based on a contractor’s AAP plan year.

In its announcement, OFCCP reiterated that contractors who do not certify by the June 29th deadline would have a greater chance of an audit. This is no idle threat. As we saw with OFCCP’s latest CSAL list, the agency selected contractors for audit that did not complete the annual certification in 2022.

Covered federal contractors and subcontractors that did not certify last year should register on the Contractor Portal as soon as possible. New federal contractors and subcontractors will have 120 days from entering a covered contract to prepare written AAPs – according to existing regulations – and 90 days from then to register and certify in the Portal. According to OFCCP’s recent announcement, the Contractor Portal will remain open after June 29th to account for these new contractors.

Last year, contractors encountered many technical difficulties trying to register and certify. Hopefully, OFCCP has worked out these “kinks” with the Portal. Nevertheless, we highly recommend contractors start the certification process as early as possible in case of unforeseen challenges.

We continue to monitor developments with the Contractor Portal and will provide updates as new information becomes available. If you have questions, please contact the Jackson Lewis attorney with whom you regularly work or a member of the Affirmative Action, OFCCP and Government Contract Compliance Group to discuss.

OFCCP has launch its Mega Construction Project (Megaproject) Program, intended to increase compliance attention on and provide compliance assistance to federal construction contractors with federally funded projects valued at $35 million or more and lasting at least one year.

This development marks another step in OFCCP Director Jenny Yang’s campaign to reinvigorate OFCCP’s oversight of construction contractor affirmative action compliance efforts. From the 2020 release of OFCCP’s Construction Contractor Technical Assistance Guide to the 2020 and 2021 Construction Contractor audit CSALs (Corporate Scheduling Announcement Lists) and the launch of a new Construction Contract Award Portal, OFCCP is increasing enforcement attention on construction contractors.

This new program was developed, at least in part, because of President Joe Biden’s Infrastructure Investment and Jobs Act (IILJA), under which construction companies are landing big dollar projects partly funded by the federal government. OFCCP wants to ensure equal opportunity for employees on the projects, as well as increase representation of qualified workers from underrepresented groups in the construction trades.

OFCCP says it will offer compliance assistance to prime and subcontractors on Megaprojects, in addition to conducting compliance evaluations. OFCCP intends to engage with prime and subcontractors at both the pre-bid and post-bid stages to “provide ongoing compliance assistance” and “evaluate contractors’ efforts to recruit and utilize talent from underrepresented backgrounds.”

The Megaproject Program’s website includes a toolkit with a Reference Sheet, a Quick Reference Guide, a letter from OFCCP to IILJA grantees, as well as a description of the Sixteen Affirmative Action Steps a construction contractor must take to fulfill its affirmative action obligations. In its Reference Sheet, OFCCP cites two examples of past Megaprojects in which it successfully engaged with the construction prime and subcontractors, as well as other stakeholders, to provide compliance assistance. OFCCP touts these projects as examples of how OFCCP’s involvement in Megaprojects early and often can positively affect the community.

There will also be a list of designated Megaprojects accessible from the Megaproject Program’s website.

The last construction CSAL published was in 2021, and OFCCP acknowledged contract size was considered in its Methodology for Developing the Construction Scheduling List in 2021. With the launch of this new program, construction contractors on Megaprojects can expect their chances of being audited by OFCCP to spike.

If you have questions, please contact the Jackson Lewis attorney with whom you regularly work or a member of the Affirmative Action, OFCCP and Government Contract Compliance Group.

OFCCP has published another updated “List of Non-Objectors” for which it intends to release EEO-1 Type 2 data from 2016 to 2020 in response to the FOIA request from the Center for Investigative Reporting. Any contractors who objected through March 3, 2023, were removed from the updated list.

OFCCP first released a list of non-objectors over a month ago. Contractors then had about a week to respond if they believed they should be removed from the list because they were not a federal contractor or had submitted objections last fall. The updated list comes about one month after OFCCP released a second version of the list of non-objectors, removing any contractors who had responded to OFCCP by the previous mid-February deadline.

WHY IT MATTERS

OFCCP states this “will be the final posting of a list of non-objectors.” Any entities remaining on the latest list have until March 17, 2023, to notify OFCCP if they are improperly on the list.

If a response is not submitted by the deadline, OFCCP will release the Type 2 data for each contractor on the list. The data will be released to the Center for Investigative Reporting and posted on the OFCCP’s website at https://www.dol.gov/agencies/ofccp/foia/library/Employment-Information-Reports.

THE BOTTOM LINE

Any entity remaining on OFCCP’s list that objects to releasing the requested EEO-1 data must notify OFCCP by March 17, 2023, at 11:59 PM EST.

Objections must be sent to OFCCP-FOIA-EEO1-Questions@dol.gov and include, at a minimum:

  1. All addresses associated with the entity for the reporting years in which the entity is listed;
  2. The entity’s EEO-1 unit number; and
  3. Any other entities associated with the organization that are covered in the objection, with the EEO-1-unit numbers and addresses for those entities (subsidiaries, merged companies, acquisitions, and so on).

BETWEEN THE LINES

OFCCP notes it has “not yet made any determinations regarding the substance or merit” of contractors’ objections. The contractors who submitted an objection have been removed from this initial disclosure to the Center for Investigative Reporting, but their Type 2 data may still be released later, following OFCCP’s review and determination of the objections.

Jackson Lewis’ attorneys will continue to monitor this matter. If you have questions, please contact the Jackson Lewis attorney with whom you regularly work or a member of the Affirmative Action, OFCCP and Government Contract Compliance Group to discuss.

This year, employers in California have updated pay data reports to submit to the state’s Civil Rights Department (CRD). Senate Bill (SB) 1162, passed in 2022, updated previous employee pay data reporting obligations and created an entirely new obligation to pay data reporting related to “employees hired through labor contractors.” This year, these pay data reports are due by May 10th.

In January, the state issued Frequently Asked Questions to assist employers to navigate these new requirements—in particular regarding the requirement to submit pay data reports on “labor contractor employees.” Read more.

OFCCP has announced the rescission of the Implementing Legal Requirements Regarding the Equal Opportunity Clause’s Religious Exemption rule adopted in January 2021 by President Donald Trump. The rescission is to be posted in the Federal Register on March 1, 2023.

In November 2021 OFCCP published a proposal to rescind the rule on the basis the rule was inconsistent with Title VII. In its communications announcing the rescission, the Agency stated

the rescission ensures a return to the department’s prior policy and practice in place during the presidencies of George W. Bush and Barack Obama – of interpreting and applying the religious exemption in Executive Order 11246 consistent with Title VII principles and case law.

OFCCP Director Jenny Yang published a blog entitled Protecting Workers and Safeguarding Religious Freedom, coinciding with the rescission of the rule in which she explained

[t]he 2020 rule also weakened nondiscrimination protections for employees of federal contractors, objectives of Executive Order 11246 to ensure economy and efficiency in federal contracting and to promote equal employment opportunity. With the rescission of the rule, we are returning to a longstanding policy in place for more than 17 years, under the administrations of both George W. Bush and Barack Obama, to determine the applicability of the religious exemption by applying established case law and principles to the facts and circumstances of particular cases.

Director Yang’s blog went on to explain that the rescission of the entire rule means the Agency will return to its “prior approach of aligning the Executive Order 11246 religious exemption with Title VII case law as applied to the facts and circumstances of each case.” To be clear, the rescission of the rule preserves the Executive Order 11246 religious exemption and

does not change religious entities’ ability to pursue federal contracts.

OFCCP has created a landing page to house information about the rescission of the rule.

As yet another update to this ongoing story, OFCCP has again pushed out the date by which contractors can notify OFCCP of their desire to object to production by the Agency of EEO-1 data in response to the Center for Investigative Reporting.

By way of notice on its OFCCP Submitter Notice Response Portal, the Agency has posted this update of actions the Agency will taking:

  • OFCCP is extending the time for contractors to respond from February 17, 2023, until March 3, 2023.
  • OFCCP will post an updated list of non-objectors no later than February 17, 2023. This updated list will remove contractors that OFCCP has identified as incorrectly included on the February 2, 2023 list, including contractor responses submitted by February 10, 2023. It will also remove all contractors that submitted objections after the publication of the February 2, 2023 list until February 10, 2023, while OFCCP evaluates these objections.
  • After the close of the response period on March 3, 2023, OFCCP will publish a second updated list by March 10, 2023, which will remove contractors that submitted objections after February 10, 2023 and by March 3, 2023, while OFCCP evaluates these objections. Contractors will then have one final opportunity to contact OFCCP no later than March 17, 2023, if they believe their company was improperly listed.

With the latest update, OFCCP has indicated it will now accept objections filed by contractors for the first time. However, the objection “must include an explanation as to why the contractor did not object in response to previous notices that OFCCP has issued, and why there is good cause for OFCCP to accept the objection at this point.”

OFCCP will then determine if there is good cause for why the objection was not filed in response to the previous notices provided by the agency, and as a result may, at its discretion, consider the substance of the late-filed objection.

All responses must be received no later than March 3, 2023, at 11:59 p.m. EST, via the OFCCP-FOIA-EEO1-Questions@dol.gov e-mail address and must include your organization’s EEO-1 unit number(s). 

The notice also provided an update on the on-going litigation involving the FOIA request reporting that “the Department of Labor filed an Answer to the Complaint on January 18, 2023. An initial Case Management Conference before Senior Judge William Alsup is scheduled for February 16, 2023.”

We will continue to report updates – stay tuned!