As we previewed last week, OFCCP’s rule codifying procedures for resolving allegations of potential discrimination through the use of a Pre-Determination Notice (PDN) or Notice of Violation (NOV) has been officially published in the Federal Register.
The main purpose of rule is to codify practices to “provide contractors with greater certainty” about the procedures OFCCP follows during compliance evaluations. Some of these procedures were previously were imbedded in the sub-regulatory Federal Contractor Compliance Manual (FCCM) and other agency directives. The new rule also clarifies and explains the different types of evidence the Agency uses to support a PDN or NOV, as well as codifies the option available to contractors to expedite the conclusion of a compliance evaluation before a PDN or NOV is issued.
The final rule contains several substantive changes from the rule the Agency proposed in 2019. These changes:
- Clarify the evidentiary standards that OFCCP must meet for the PDN must also be met for the NOV.
- Establish the use of the terms qualitative and quantitative evidence to describe the type of evidence OFCCP must identify in support of a PDN or NOV. Specifically, replacing reference to non-statistical and statistical evidence with these broader, more encompassing terms.
- Codify the use of the agency’s consideration of practical significance in assessing potential violations and “help the agency ensure it is directing its efforts effectively.”
- Identify and differentiate procedures and burdens for disparate treatment versus disparate impact cases. This includes the requirement that OFCCP provide qualitative evidence for all disparate treatment cases and identify a policy or practice causing adverse impact with factual support for disparate impact cases. The proposed rule required qualitative (or anecdotal) evidence in cases only when the standard deviation was less than three. The final rule removes that threshold.
- Establish OFCCP must explain the basis for its findings, and provide the model, variables used and explanation why variables were excluded from its analysis upon request of the contractor.
- Provide the framework for contractors and OFCCP to explore early resolution procedures currently in use by OFCCP, as specifically set out in the Early Resolution Procedures program, during a review. The Agency was clear to point out that the final rule does not codify the process or the procedures themselves.
The final rule is largely seen as a positive development for the contractor community and goes to address the criticisms around transparency and certainty that have plagued the Agency for years. And, it may in fact prove to provide helpful guidance and support for contractors who are now faced with a change of administration looming on the horizon.
With the countdown to the anticipated “changing of the guard” underway, OFCCP is not sitting idly by. We expect to see additional rulemaking (specifically around religious exemptions) and other activities in the weeks to come so, as always, stay tuned for more.