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- Promotion Pools: OFCCP has withdrawn its request for contractors to submit “pools” of internal employees who were considered for promotional opportunities.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.