Only One Item On OFCCP’s Spring Regulatory Agenda: TRICARE

Today, the Trump Administration released its Spring 2018 Unified Agenda of Regulatory and Deregulatory Actions, which “reports on the actions administrative agencies plan to issue in the near and long term.”

OFCCP has only one item listed on its agenda, entitled “Affirmative Action and Nondiscrimination Obligations of Federal Contractors and Subcontractors: TRICARE and Certain Other Healthcare Providers.”  The description of the forthcoming proposed rulemaking states it will look to revise the affirmative action regulations

concerning the obligations of TRICARE or certain other healthcare providers as federal contractors and subcontractors.  This proposed regulatory action would include limiting and otherwise altering the obligations of TRICARE and other healthcare providers covered by these authorities.

If you recall, in 2014 after a lengthy and complicated battle to establish jurisdiction for TRICARE providers, OFCCP issued a Directive placing a moratorium on compliance reviews for all contractors whose sole source of government funding is TRICARE.  That moratorium is set to expire in 2019.  Not coincidentally, the proposed date for release of this NPRM is April 2019.

No other details about the proposed rulemaking were provided.  As soon as additional information is known we will provide an update so stay tuned for the next chapter of this saga.

OFCCP Releases “Town Hall Action Plan” to Address Contractor Concerns

In the words of OFCCP, the contractors spoke and OFCCP listened.  OFCCP is also listening to the Government Accountability Office and its detailed review of the Agency.

In response to the GAO’s Strengthening Oversight Could Improve Federal Contract Nondiscrimination Compliance report and on the heels of OFCCP’s Compliance Assistance Town Halls, the Agency has developed a path to address “three general areas of focus:  training, communication and trust” through a Town Hall Action Plan.  OFCCP reports it developed the action plan “consistent with its existing budgetary and human resources” and that that the agency

further expects that this plan will not only respond to the three common themes identified in the town halls in FY 2017, but will also contribute to the agency’s response to recommendations four, five, and six in the 2016 GAO report.

The Plan is founded on three initiatives:

  1. Review and Enhance Contractor Compliance Assistance
  2. Assess and Improve the Quality of Contractor and Compliance Officer Training and Education
  3. Increase Transparency and Communication

Perhaps of most interest to contractors are the issues of transparency, communication and consistency addressed in the third initiative.  The initiate states OFCCP will “create a ‘roadmap’ or written guide to the compliance evaluation process for contractors” which will further its goal of enhancing communications between contractors and OFCCP, improve the transparency in OFCCP’s work, and begin to address trust issues.

In addition to the Agency’s previously-announced renewed reliance on predetermination notices, OFCCP “will develop policy guidance for creating greater transparency around the identification of indicators of a violation, explaining the basis for a supplemental data request, and conducting a meaningful compensation self–assessment.”  This initiative is consistent with recent reports regarding the possible rescission of OFCCP’s controversial Directive 307 regarding audit compensation analyses.

The Town Hall Action Plan also previews what OFCCP is referring to as a “Bill of Rights” titled “What Contractors Can Expect.”  This document, to-be-entitled What Contractors Can Expect, will outline certain OFCCP principles that contractors can expect to exist during an engagement with OFCCP.  These principles are expected to “include, but are not limited to, things such as timeliness, accuracy, communication, confidentiality, and professionalism.”

And the Agency isn’t done listening.  For those contractors who received OFCCP’s survey, you still have time to give your feedback – the deadline to respond is May 4th – let your voice be heard.

We applaud the Agency’s initiatives and look forward to learning more about the details, which we will share as they  become available.

EEO-1 Filing Deadline Extended

Without much fanfare, the U.S. Equal Employment Opportunity Commission’s EEO-1 Joint Reporting Committee has extended the deadline for filing of this year’s EEO-1 Survey until June 1, 2018.

As a result of modifications to the EEO-1 survey, which have subsequently been postponed, employers initially had until March 31, 2018 to file their 2017 survey.  The extension gives employers an additional two months to file their reports   While much welcomed, the additional time is not unexpected given the changes and clarifications to the reporting process this year.

You can direct questions regarding your EEO-1 filing to  E1.TECHASSISTANCE@EEOC.GOV. 

Breaking News: OFCCP Could Be Close To Rescinding Current Compensation Directive

Bloomberg Law is reporting OFCCP may soon rescind the controversial Directive 307, which has been in place since early 2013, and sets out the Agency’s current methodology for analyzing pay.  In its place, Bloomberg reports OFCCP will direct compliance officers to review compensation based on pay groupings established by the contractor.  If the directive is rescinded and replaced as being reported, this would be the end to what some have deemed a failed experiment at OFCCP and seemingly return the agency to firmer ground for its pay analyses.

We are aware OFCCP Director Ondray Harris and Special Advisor Craig Leen have recently been reviewing and evaluating OFCCP’s approach to compensation.  If issued in the coming days, this would be the second directive issued under Director Harris’ leadership of the Agency.

As soon as we receive confirmation of the rescission and have an opportunity to review any new directive that is issued we will provide an update and our insights.

OFCCP Discloses Audit Scheduling Methodology

In another show of transparency, OFCCP has released a detail description of its process for selecting contractors for audit.  The two-page document walks through, step-by-step, the process OFCCP undertook to identify establishments for the “first release of the FY 2018 Supply and Service scheduling list.”  As the release explains, OFCCP is not required to make these disclosures but decided to do so voluntarily.

As a first point to note, description describes this as first release, indicating, not surprisingly, that there likely will be a second round of scheduling occurring later this fiscal year.

The description then moves into detail about how they bucket contractors based on organizational relationship and how the Agency takes into consideration, employee count, contract details and other factors.

Finally, the description notes that once the establishments were identified, they were randomly ordered, uploaded into the Case Management System and, if necessary,

appended to district offices’ lists of unscheduled establishments. OFCCP does not purge unscheduled cases from prior lists before releasing a new scheduling list.” 

This last section explains why contractors may be seeing scheduling letters without first receiving a CSAL.  Because the unscheduled cases are not purged, they remain in the system, and thus might be added to the list, even though they were not newly selected.

As OFCCP continues to provide new and additional information we will be sure to update.

OFCCP Reduces Veteran Hiring Benchmark

OFCCP has announced the new Veteran Hiring benchmark will be 6.4% effective March 31, 2018.  Affirmative Action Plans in effect until the March 31, 2018 date should utilize the prior year’s benchmark of 6.7%.

The benchmark has steadily declined since its inception in 2014 and this year is the fourth reduction of the benchmark since it was first released.  This year’s drop of 0.3% is the largest single-year reduction of the benchmark and represents a 0.8% decrease since its high point in 2014.

The historical review of the annual national percentages as reported on OFCCP’s website is as follow:

Percentage Effective Date
From To
6.4 03/31/2018
6.7 03/31/2017 03/30/2018
6.9 03/04/2016 03/30/2017
7 04/21/2015 03/03/2016
7.2 03/24/2014 04/20/2015

OFCCP Wants Your Feedback

If you’ve e-mailed anything to OFCCP in connection with a compliance review in the past 5 years you likely received a message recently letting you know about OFCCP’s upcoming survey.  As it did several years ago, OFCCP will be asking a select group of contractors to provide feedback on how the agency is doing and to make suggestions on improvements.  Not all contractors will be selected to receive the survey, but for those that are, the survey is scheduled to go out via e-mail over the next two weeks.

In furtherance of the collaborative tone and theme we’ve been hearing from Director Harris and the new OFCCP leadership team, OFCCP notes the purpose of the survey is specifically

to gather more information about how we can continue improving communication, transparency, and timeliness during our compliance evaluations.

The survey appears to pose a unique opportunity for contractors to share their thoughts with the Agency in the hopes of influencing policy and process changes.

Concerns about anonymity and data security we raised last time OFCCP promulgated a survey.  OFCCP explained in today’s e-mail the steps it has taken to address these concerns, which include:

  • selecting the option in SurveyMonkey that makes survey responses anonymous; and
  • not having SurveyMonkey not collect or share data with OFCCP that would personally identify survey respondents, including their IP address.

OFCCP also reiterated that compliance review scheduling is in no way impacted by survey participation nor will it have an impact on current reviews.

Questions regarding the survey should be directed to OFCCP-Customer-Exp-Survey@dol.gov.

 

Scheduling Letters Are In the Mail

When the Agency mailed the most recent round of CSALs in February 2018, it reported it would wait until March 19, 2018 to start issuing Scheduling Letters.  True to their word, we have learned that Scheduling Letters have started arriving, at least in some areas of the country.

As a reminder, OFCCP sends scheduling letters via certified mail to the HR manager at the location to be audited,  If you received a CSAL you should make sure those that receive mail at the location are on the look out.  Once the letters are received, Contractors have 30 days to submit the requested AAP and itemized data.  With the advance notification provided by the CSAL and waiting until now to send out the Scheduling Letters the Agency believes contractors have had ample time to prepare for the audits and hold the expectation contractors will be able to comply with the submission requirements in the provided response window.  As a result, it has posted on its website that

Given this advance notice, extensions to submit the AAP will not be granted for routine business reasons and [will] generally be limited to 15 days.

Under the leadership of Director Ondray Harris, OFCCP is working hard to restore its relationship with the contractor community.  With that said, they are still an enforcement agency with a job to do.  And initiating audits is the primary way it achieves its goal of evaluating the compliance of federal contractors.  It will be interesting to see what impact Director Harris and his vision for the Agency have on how these audits are conducted once they are initiated. We’ll be sure to bring you any updates or insights as we learn of them.

OFCCP Funding to Remain at Same Level

In the new spending bill passed by Congress and approved by President Trump last week, OFCCP will receive essentially the amount of funding as it has in previous years.  As signed by the President, the budget has $103,476,000 allocated to OFCCP, which is comparable to the $103,767,000 for FY2018, and significantly up from the $91 in the President’s proposed budget.  The one sentence appropriation for OFCCP can be found on page 886 of the 2232 page bill.

It remains to be seen whether, despite the reprieve from budget cuts, OFCCP will continue considering cost-saving measures such as the potential closure of district offices.  As we learn more we’ll be sure to update with any developments.

OFCCP Issues New Directive in Furtherance of Commitment to Increased Transparency

by Laura A. Mitchell and Christopher T. Patrick

Under the leadership of new OFCCP Director Ondray Harris, the Agency has issued its first policy directive of 2018. Directive 2018-01, effective February 27, addresses an area of concern discussed at length during the Agency’s listening sessions earlier this year: the need for increased transparency.

The Directive instructs all OFCCP offices to issue a Predetermination Notice (“PDN”) prior to issuing a Notice of Violations when the Agency has concluded its review and believes findings of discrimination may be appropriate. A PDN is a letter OFCCP uses to inform contractors of the Agency’s preliminary findings of employment discrimination and serves as a way to provide contractors an opportunity to respond to preliminary findings prior to OFCCP deciding to issue discrimination violations.

Before the Directive, OFCCP

typically reserved use of the PDN for systemic discrimination cases and permitted regional and district offices discretion in whether to issue the PDN prior to issuing a Notice of Violation (NOV).

But now, PDNs are required and, it is Agency policy that,

OFCCP will issue PDNs for preliminary individual and systemic discrimination findings identified during the course of compliance evaluations.

This is welcome news for contractors facing aggressive, protracted compliance reviews in which it was uncertain whether they would have notice of OFCCP’s preliminary findings. This additional step in the process will hopefully foster an open dialog between contractors and OFCCP to clarify misunderstandings and correct errors in analyses.

The Directive also suggests increased National Office oversight and review of potential violations before the Agency concludes that discrimination violations are appropriate – requiring that the regional Solicitor review all PDNs and submit them to OFCCP’s national office for a “review and final decision.” It even halts violations that are drafted but not yet issued, and requires that local office issued a PDN instead so that the contractor may respond before any formal allegations of discrimination are issued.

While the ultimate impact of this Directive is still unclear, it an encouraging policy step in Director Harris’s young tenure.

This Directive is new, and it’s implementation still developing. The Directive indicates OFCCP will be updating the Federal Contractor Compliance Manual (FCCM) consistent with the Directive.  We will keep you posted as we learn more.

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