This is the third of our series of blog posts on the Office of Management and Budget’s (OMB) July 1 request for comments on OFCCP’s updated proposed scheduling letters.  For background, OFCCP first proposed changes to its existing compliance check, establishment review, and focused review scheduling letters in April, and received comments from the contractor community.

These newly proposed July scheduling letters each include changed requirements that, if approved, would impact what contractors must submit at the onset of every compliance review. We have recently blogged about these changes to OFCCP’s proposed compliance check and establishment review scheduling letters. This post explores the proposed changes to the required submissions in every focused review OFCCP plans to conduct.

In short, unlike its changes to its proposed establishment review scheduling letter, OFCCP’s proposed July focused review letter is largely unchanged.

To be fair, OFCCP has withdrawn some requests in its revised July focused review letters, which mirror changes to the revised July establishment review letter. These changes include:

  • Additional Months of Data. For contractors who receive a scheduling letter more than six months into their AAP plan year, the April proposed letters sought to require contractors submit additional personnel activity data and “44(k) data,” which tabulates information on job openings and disabled and veteran applicants and hires, for “every completed month” since the plan year began. The July letters dial this requirement back to require only this data “for at least the first six months.” Contractors may – of course – submit more data, or may provide it for each month, if they wish – but it would no longer be required.
  • Assessments of Personnel Processes, Physical and Mental Qualifications. Echoing the changes in the July establishment review letter, OFCCP has removed a requirement that a contractor provide the date of its more recent assessments and the date scheduled for its next one. Instead, only a “description of the review and any actions taken or changes made as a result of the assessment” would be required.
  • Promotion Pools. Recognizing the lack of regulatory obligation to create data-driven “promotion pools” and the additional burden that this requirement would create, OFCCP has withdrawn the requirement that contractors provide these specific pools for promotion decisions. But, in place of this requirement, OFCCP now seeks permission to require a contractor submit “the job title and job group that each employee was promoted into and the job title and job group from which each employee came” and the workforce representation of individuals with disabilities or protected veterans in the AAP job group from which the employee was promoted. (The current regulations do not require contractors to analyze veteran workforce representation at all, let alone by job group.)
  • Submission Procedures. As with the changes to its other July letters, OFCCP has withdrawn its requirement that contractors must provide audit submissions in electronic format—but still encourages electronic submission “to reduce the amount of time it takes to complete [OFCCP’s] evaluation.”

While these changes are encouraging, a number of the initially proposed changes from the April letters remain in place. The July proposed letters would still require:

  • Applicant and Employee Level Employment Activity Data. As with the April letters, the July letters require contractors submit individual-level applicant, hiring, promotion, and termination data that include veteran and disability personnel activity data by job title and job group. This is far more detailed than the aggregated “job group or job title” personnel activity submission in the current establishment review scheduling letter. And, as we discussed in our blog on the April letter, if OMB approves this requirement, proactive disability and veteran adverse impact analyses may be essential in each audit submission.
  • Unique Identifier Across All Data. The July letters continue to require employers submit a single unique identifier in all employee data files to permit OFCCP to track an individual across all applicant and employee reports. Many contractors may have significant difficulty complying with this data reconciliation across systems.
  • Employee Level Compensation Data. The April letters’ requirement that contractors submit employee level compensation data remains unchanged. The July letters would force contractors to submit compensation for each employee, including base salary/wage rate, hours worked in a typical week, and other types of compensation, such as bonus, incentive, commission, merit increase, locality pay, and overtime—and may lead to the same unpredictable compensation analyses contractors have experienced in its establishment reviews. Because there is no obligation to identify each employee’s disability or veteran status, as the EEO-1 Report requires for race and gender, this missing veteran and disability data will invariably skew any compensation analyses.
  • Executive Order (EO) 11246 AAP. In a continued effort to install a company-wide AAP verification system without the burden of changing the regulations, the July letters continues to require that contractors submit the current EO 11246 (race and gender) AAP for the selected establishment at the beginning of a focused review.

OFCCP represents to OMB that all of the July letters’ proposed obligations will create a burden of roughly 10.5 hours for each focused review – including the time necessary to gather, prepare, review, and submit all required items at the beginning of the focused review process. This burden estimate is unchanged from OFCCP’s assessment of its April letters – despite the changed obligations.

We encourage contractors to review these proposed additional items that would be required in every focused review, evaluate the ability of their current systems to provide this information, and estimate the work-hours necessary to comply with these requirements. Contractors who wish to provide comments to OMB on the substance or anticipated burden of these requirements may do so until July 29th.

On schedule, EEOC has opened the portal for filing 2017 and 2018 EEO-1 Component 2 reports.

Here’s the catch, however:  According to updates on the Component 2 website, the reporting portal is “operational and available for viewing by the public,” however, as it previously advised, batch reporting will not be available until mid-August.

In addition, filers will need EEOC-provided login information before being able to access the portal.  EEOC’s most recent status update filed with the Court indicated the information was put in the mail in hardcopy to users on July 12, 2019 and should be e-mailed, today, July 15, 2019.

With the opening of the portal, NORC has also published a 44-page User’s Guide to help employers with the reporting process.   This is in addition to the sample reports and file specifications recently added to the site.

To contact EEOC and NORC regarding filing issues, including questions regarding log-in information,  you may call (877) 324-6214 or send an email to EEOCcompdata@norc.org for assistance.

This is the second blog post in our series discussing the Office of Management and Budget’s (OMB’s) request for further comments on OFCCP’s proposed scheduling letters and itemized listings, which were first published in April.

In our April post on the proposed changes to the then newly proposed establishment review scheduling letter and itemized listing, we identified several new requirements that, if imposed, would result in significant changes (and increased burden) to contractor audit submissions. The public was given the opportunity to provide comments on the proposed letter, and it appears as though OFCCP has listened to the contractor community’s concerns.  In a welcome development, OMB’s July proposed establishment review letter walks back many of the more onerous requirements its April letter proposed. In fact, the July proposed letter largely reverts back to the existing establishment review letter.

Below are several proposed changes that have been removed in the most recent version of the itemized listing:

  • Sub-minority Utilization and Availability: The July proposed letter strikes all requests for data on sub-minority utilization and availability, goal calculations, and placements by sub-minority group.
  • Analyses of Compensation Systems: The July proposed letter also removes the requirement to provide results of a contractor’s most recent compensation analysis. This change protects the attorney-client privilege and recognizes that contractors are not required to prepare the types of “pay analyses” that OFCCP has requested during compliance reviews over the past few years.
  • Promotion Pools: OFCCP has withdrawn its request for contractors to submit “pools” of internal employees who were considered for promotional opportunities. However, it has updated the proposed letter to require contractors provide the female and minority representation in the job group from which employees were promoted.  This is a considerably lighter lift for contractors, many of which already provide this information in their existing audit submissions.
  • Voluntary and Involuntary Terminations Data: OFCCP is no longer requesting that contractors provide data to identify voluntary versus involuntary terminations in the initial submission.
  • Additional Months of Data: The proposed changes in the April letter would require contractors that receive a scheduling letter more than six months into their AAP plan year to submit summary data for every completed month of the plan year. The Agency has removed this request from the July proposed letter – now only requiring data for the first six months of the new plan year.  As with the other items discussed above, this mirrors the requirement in the existing establishment review scheduling letter.

Yet, contractors should keep in mind that the July proposed letter continues to depart from the existing scheduling letter in a number of ways. The following are some of the more significant differences that remain:

  • Subcontractor Information: Perhaps the most meaningful addition to the current letter, both versions of the proposed scheduling letter require information relating to subcontractors. But the July proposed letter only requires contractors identify subcontracts in excess of $150,000 and clarifies that, for contractors with multiple establishments, OFCCP is seeking the most recent subcontracts at any of the contractor’s establishments — not just the establishment under audit.  Though modified, this request may still pose a burden for contractors.
  • Assessments of Personnel Processes, Physical and Mental Qualifications: While the requests for these assessments are present in both the April and July proposed letters, the July proposed letter does not require the contractor to provide dates of the assessments. Rather, it only requests (1) a description of the assessment and actions taken for the Assessment of Personnel Processes, and (2) a schedule of the assessment and actions taken for the Assessment of Physical and Mental Qualifications.  As many contractors tend to assess their processes and qualifications on an ongoing or rolling basis, this update to the letter seems more in line with common contractor practices.
  • EEO-1 Reporting: Since the April letter, the Component 2 of the EEO-1 report is back on. The July proposed letter makes clear that contractors must only submit Component 1 of their last three years’ EEO-1 reports.  In the current form, there would be no requirement to submit Component 2 of the EEO-1 report during an audit.
  • Documentation of Compliance with Audit and Reporting System Requirements: The proposed changes in April removed this requirement from the current letter, but it reappears in the most recent version.

Contractors who wish to provide comments to OMB may do until July 29th.

Stay tuned for our third and final blog in this series, which will analyze updates to the focused compliance review scheduling letters.

As July 15th draws closer, EEOC and NORC are ramping up for opening of the EEO-1 Component 2 Pay Data reporting portal.

As part of these efforts, they are consistently providing new information on the reporting obligation.  Most recently, the reporting website has been updated to include assurances from NORC on data system security in the form of a new FAQ as well as release of the file upload specifications.  The new FAQ appears at the very end of the list of available questions and answers and provides details about NORC’s processes and protocols for protecting the information submitted by filers during the reporting process.

The file specifications include a list of the questions and information employers will be required to provide to complete the filing and goes into more detail than the sample forms previously provided.  The specifications show that for each, separate, establishment report filed, employers will need to answer a question regarding federal contractor status.  Though employers have previously been required to answer this question at an organizational level for EEO-1 Component 1 reporting purposes, this is the first time they are being asked to do so on an individual location basis.  This level of disclosure seemingly has not been previously discussed, or evaluated, from a burden standpoint.

We anticipate additional updates and release of new information in the coming days so stay tuned in!

In April, OFCCP proposed four new scheduling letters – one each for its establishment reviews, compliance checks, and separate but related letters for its focused reviews on Section 503 (disability) and VEVRAA (veteran) compliance. These proposed letters, if approved, would have significantly increased the burden of the submission required in the event of a review. The notice and comment period closed for these letters on June 11, with many weighing in with questions, describing burdens, and requesting changes. On July 1, OMB published notice that it would begin reviewing amended letters from OFCCP—with comments due July 29.

So, did OFCCP update its requests in light of community concerns? Largely, yes. However, in light of the new comment period, we thought it would be helpful to review each new letter, point out the places where OFCCP seems to have revised the letter based on contractor community feedback, and highlight areas where even the updated letters may have room for improvement.

What’s different? We begin with the compliance check letter and will follow with a discussion of each letter in subsequent posts.

At first glance, the compliance check letter appears largely unchanged. As with the April 2019 proposal, OFCCP seeks only three types of material: (1) “Written AAPs prepared in accordance with Executive Order 11246, Section 503, and VEVRAA”; (2) “Examples of job advertisements, including listings with the state employment services”; and (3) accommodations for persons with disabilities.

Digging deeper, there are notable changes – some that will likely reduce the burden of a compliance check and others that may increase it.

First, burden reducing changes:

  1. Denied Accommodation Requests. While the April 2019 proposed letter required “Requests made for accommodations by persons with disabilities, whether the requests were denied or granted” the new July 1 proposed letter only requests “Examples of accommodations made for persons with disabilities.” The requirement that denied requests be provided has been removed, which is in line with the current compliance check scheduling letter.
  2. Submission Logistics. The April 2019 version required that contractors submit the material to OFCCP in electronic format, and later provided an alternative to permit on-site inspection. The new July 1 proposal presumptively contemplates that the material will be made available for on‑site review but provides that “[i]n the alternative, [a contractor] can submit this information to OFCCP within 30 days of [its] receipt of this letter by mail using the U.S. Postal Service or email.” Gone is the requirement that contractors submit electronically. Perhaps more interestingly, the new letter only requires that contractors “submit” the material “using the U.S. Postal Service” within 30 days of receiving the compliance check letter – not that OFCCP receive the submission by then. How this change will play out in the field remains to be seen.

Next, changes that potentially increase the compliance check burden:

  1. Written AAPs. As with the April letter, the newly proposed July 1 version requires actual AAPs – not just the results of the prior year’s program. But, since April, OFCCP has updated the regulatory citations to require more. In April, the regulatory citations were to 41 CFR §§ 60-1.12(b), 300.80, 60-741-80 – record retention regulations. The July version updates the citations for the Section 503 and VEVRAA AAPs to be 41 CFR §§ 60-300.44, and 60-741.44 – which address “required contents of [Section 503 and VEVRAA] affirmative action programs.” OFCCP may interpret this expansion to require contractors submit items such as a review of its personnel process, a review of its physical and mental qualifications, and its data collection regarding disabled and veteran applicants and hires.
  2. Job Postings. OFCCP has also updated the citation in its requirement that contractors provide example job advertisements. Here, the additional citation includes the requirement in the Equal Opportunity Clause that the contractor agrees to list all employment openings that exist at the time of the contract and those that occur during the performance of the contract with the appropriate state employment agency. This requirement does not on its face seem to increase the burden of a compliance check, but OFCCP field representatives may interpret the additional citation to require that additional documentation be submitted to satisfy the required submission.

We encourage you to review the new scheduling letters and, if you would like to, provide comments to the Office of Management and Budget about the burdens that these updated proposals impose. Comments are due July 29th.

Be on the lookout for our next blogs in this series, as we dive into the updates to the proposed establishment review and focused review scheduling letters.

As we previously reported, on July 2, EEOC updated the its newly created website with long-awaited materials regarding the obligation of employers with 100 or more employees to submit pay data and hours worked data as part of the annual EEO-1 reporting obligations.

We anticipated EEOC would not change much relative to the materials the Agency published in 2016. For the most part that’s true but below is a summary of important changes, omissions and additions.

    • Sample Forms: Thankfully, the only substantive change is EEOC corrected the pay data heading to “Salary Compensation Band” from “Annual Salary in Thousands” to clarify that the 12 salary bands are based on annual W-2, Box 1 income data, not annual salary.
    • Instructions: EEOC has included some important clarifications but also, curiously, omitted text.
      • Filers may use either a Type 8 or Type 6 form to report pay for locations with fewer than 50 employees. As with the EEO-1 Component 1 reports, filers using a Type 6 list, “must enter all employment data into the Consolidated report (Type 2). For Type 8 reports, the system “will automatically transfer to populate the overall Consolidated Report.” As usual, the Consolidated Report numbers much match the total of the other reports.
      • The confidentiality provision in the new Instructions is more limited. EEOC has omitted the following statement that appeared in the 2016 Instructions: “The confidentiality requirements allow the EEOC to publish only aggregated data, and only in a manner that does not reveal any particular filer’s or any individual employee’s personal information.” This is a surprising omission given the regulations regarding confidentiality have not been changed. We expect (hope) EEOC will follow this statement, despite its omission.
      • EEOC has also expanded the bases on which the Agency may reject a Freedom of Information Act (FOIA) request for pay data. “When the EEOC receives a FOIA request for EEO-1 data from the public, and when suit has not been filed on the investigated charge, it relies on FOIA Exemption 3 to withhold the EEO-1 data. Additionally, Exemption 4 of FOIA may potentially be applicable. Exemption 4 protects privileged and confidential trade secrets and commercial or financial information.” As reflected in the discussion of FAQs, below, this change is due to the recent Supreme Court decision in Argus Leader.
      • Filers may use a proxy for exempt employee hours of 40 hours per week for fulltime employees, and 20 hours per week for part-timers, multiplied by the number of weeks in the year each employee was “employed.” This may result in inaccurate reporting – inconsistent with a filers actual hour standards. For example, fulltime employees may work only 37 hours per week. To allay concerns, the 2016 Instructions included the statement: “To the extent that the use of the proxy numbers cause some deviation from an exempt employee’s actual hours worked, the certification of the report as accurate would be considered appropriate.” Again, it is not clear why EEOC omitted this guidance. However, without providing substitute guidance it is less than clear whether EEOC has taken a different position.
  • Frequently-Asked Questions (FAQs): EEOC has provided extensive answers to FAQs, notably:
    • Filers are not required to use the same workforce snapshot date they used to file Component 1 reports for 2017 and 2018. Filers may choose a different snapshot date/period for Component 2 reporting. 
    • Regarding the reporting of hours worked for exempt employees, the FAQs seem to suggest that filers cannot deviate from the 40/20 hours per week proxy numbers, unless it reports actual hours worked

If exempt employees…work a standard 35 hours per week, can the employer report those hours instead of the 40-or 20-hour proxy? Yes. The employer has the choice to report actual hours or the designated proxy hours.

In other words, if 35 hours doesn’t necessarily represent actual hours worked for some or all exempt, fulltime employees, a filer cannot use a proxy of 35 hours. Filers would need, as an alternative, to report actual hours worked. However, filers need not report proxy hours for all exempt employees: it may report actual hours for some and proxy hours for others.

  • Regarding FOIA requests, the FAQs specifically address the recent Supreme Court case. “Pursuant to the Supreme Court’s recent decision, Food Marketing Institute v. Argus Leader Media, — S. Ct. —, 2019 WL 2570624 (June 24, 2019), Exemption 4 protects information that is customarily and actually treated as private by its owner and provided to the government under an assurance of privacy.” 

EEOC has held true to its word to provide additional information in advance of the start of the reporting obligation, not all of which we address above. Nor is the website complete. EEOC will continue to add information in the coming days.

For the latest information, join us on July 9th for a complimentary webinar in which we will discuss this new information and how to best prepare for the upcoming filing.

Additionally, continue to check back with us as we approach the July 15 date on which the filing portal for Component 2 is schedule to open.

 

 

 

As we approach the July 15 date on which EEOC expects to open the portal to file EEO-1 Component 2 pay data reports, EEOC has at long last provided us with guidance materials:  https://eeoccomp2.norc.org/faq.html . 

The most helpful materials can be found by clicking on the “More Info” Tab at the top right of the web page.  There you will find a sample reporting form, Instructions, a User’s Guide and other materials. 

At first glance a key question answered is whether employers have to use the same snapshot date for the Component 2 filings as they did for the previously filed 2017 and 2018 EEO-1 Component 1 reports.  The answer is No.

Employers are permitted to choose a different workforce snapshot period for reporting Component 2 data for each of these years, if they so choose.

 As we dive further into the materials, we will let you know what we see. 

 

 

On Friday, the Office of Management and Budget (OMB) published notice it would begin reviewing the proposed changes to OFCCP’s Supply and Service scheduling letters, including the Section 503 and VEVRAA Focused Reviews and Compliance Check letters. OMB is seeking public comments until July 29, 2019 to aid in its review.  Under the Paperwork Reduction Act (PRA), OMB must evaluate all new and (periodically) all existing federal government requests for information based on administrative burden.

OFCCP originally published its proposed revisions to the scheduling letter in mid-April.  We previously discussed these changes which include—requiring employers under audit to submit a list of their largest subcontractors, providing OFCCP with employee promotion “pools,” and a request for internal compensation analyses, among other changes. That comment period closed June 11 with the Agency receiving comments from many interested stakeholders.  OFCCP has now revised their proposed letters.

Presently, OMB is particularly interested in comments that:

  • Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
  • Evaluate the accuracy of the agency’s estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
  • Enhance the quality, utility, and clarity of the information to be collected; and
  • Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.

The approval for the current scheduling letter expired on June 30, 2019; however, the notice states the existing information collection requirements receive a month-to-month extension while OMB’s evaluation of the proposed revisions is pending.

We will continue to monitor this and other developments as they continue to unfold

In its most recent status update, filed with the court as ordered by Judge Tanya S. Chutkan, EEOC is reporting it and NORC are on schedule to open the EEO-1 Component 2 pay data reporting tool on July 15, 2019.

The status report explained that a Computer-assisted Web Interview (CAWI) data collection instrument will be available on July 15, 2019. Importantly, the report noted that NORC is working on a data file upload function and validation process which is expected to be available as an additional data collection method no later than August 15, 2019.

Continue Reading EEOC On Schedule to Open Component 2 Reporting July 15, 2019

As previewed last week, EEOC has provided additional details regarding the anticipated opening of the EEO-1 pay data reporting portal and helpdesk.

The EEOC is now reporting it expects a web-based portal for the collection of 2017 and 2018 Component 2 data will be active by mid-July 2019.

Continue Reading EEOC Provides Update on EEO-1 Pay Data Reporting Portal and Helpdesk Development