Under 41 CFR 60-300.45, OFCCP must publish the “national percentage of veterans in the civilian labor force” for contractors to use as a “hiring benchmark.”  OFCCP’s initial veteran hiring benchmark (in 2014) was 7.2% .   Every year since, this percentage of available veterans has decreased.   This year, the veteran hiring benchmark decreased again – from 5.9% to 5.7%.

So, for contractors who elect not to calculate their own hiring benchmark, be sure to use the national percentage on your AAP plan year date:

  • Affirmative action plans dated before March 31, 2020 should continue to use the prior 5.9% veteran hiring benchmark.
  • Affirmative action plans dated March 31, 2020 or later should use the new 5.7% veteran hiring benchmark.

As OFCCP rolls out audits focused on VEVRAA compliance, contractors should expect the Agency to look closely at the organization’s benchmark and its hiring rates.

In case any of you have been wondering, OFCCP is not slowing down amidst the COVID-19 pandemic.  While the Agency has been thoughtful and reasonable in extending response times for audits and even granting a National Interest Exemption for new contractors helping respond to the pandemic, OFCCP continues to schedule new audits, now with newly approved revised scheduling letters, as well as issue new guidance.

And today is no exception as the agency announced the release of three new directives:

In Directive 2020-02, which becomes effective 4/17/2020, OFCCP has set a goal to complete audits within 180 days where there are no indicators of discrimination, or to issue a Pre-Determination Notice (PDN) within one year from the issuance of the scheduling letter where discrimination indicators exist.

As a caveat, these goals assume “the contractor fully cooperates with the compliance review, including timely submissions of all documents and records and providing prompt access to all interviewees and premises requested by OFCCP.”

The Directive notes OFCCP will monitor audit progress through its Compliance Management System (CMS), which will provide national leadership “detailed monthly reports” of audit progress.   From an operational perspective, the Directive requires Compliance Officers to provide contractors with a status update every 30 days.

While some contractors choose not to “poke the bear” when audits languish, the Directive also institutes a limited process for contractors to essentially complain about the length of an audit.  If a contractor “has generally provided all information requested by OFCCP,” the contractor has the option of first asking the Regional Director to address a delay where:

  • A compliance evaluation remains open for one year from the day the contractor received the scheduling letter, without the issuance of a PDN; or
  • A compliance evaluation remains open for two years and has not been referred to the Office of the Solicitor.

If the Regional Director does not resolve the delay, the contractor must “petition” the Director with a copy to the Ombudsman.  “The Ombudsman will then review the matter and report back findings to the Director, who will make a determination in consultation with the career Deputy Director, Director of Enforcement, and Regional Director as to how to proceed.”

We will bring you insights on the other directives in the coming days so, as always, stay tuned for more.

As we previously reported, OFCCP finally received approval of its new scheduling letters – and as a result federal contractors and subcontractors will be required to submit some additional information when selected for a Department of Labor compliance review.  So, what’s new?  As it turns out, not much.  Most of the most significant changes in the OFCCP’s requested scheduling letters were not adopted.

We’ve scoured the new letters and note the following differences from OFCCP’s proposals in June 2019.  There are non-substantive changes and more precise notices to contractors, which we are not noting here.

Disability (Section 503) & Veteran (VEVRAA) Focused Reviews

What’s new?

  • Veteran Focused Reviews, Generally. It’s all new for Veteran focused reviews.  While OFCCP announced a CSAL list for veteran focused reviews in November 2019, there hasn’t been an approved scheduling letter to initiate them until now.  Notably, the veteran focused review letter mirrors the obligations from the disability focused review scheduling letter.
  • Assessment of Personnel Process. The prior obligation to submit the date the contractor performed its most recent assessment of personnel and the date of its next scheduled assessment has been replaced with a mere “description of the review.”
  • Assessment of Physical and Mental Qualifications. Instead of providing the date of the most recent assessment of the physical and mental qualifications and the date for the next assessment, the new letter requires contractors provide “the schedule for the review.”
  • Electronic Submission of Data. The new focused scheduling letters state that contractors “must” submit any of the requested information in electronic format if the contractor maintains the information electronically.  This requirement is unique to the focused review letters. 

What did OMB remove?

  • Employee-Level Self-Identification Data. OMB did not approve the OFCCP’s request that contractors submit applicant and employee level data on the disability or veteran self-identification, respectively, covering the immediately preceding Section 503 AAP year.  The Agency’s proposed letters would have required that contractors provide a unique identifier “such that OFCCP can match self-identification information to applicants and employees.”  The removal of this more detailed employee and applicant data reinforces the limited scope of focused reviews and confirms that these audits require only a subset of the information required in a full establishment review.
  • Compensation Data. OMB did not approve the OFCCP’s request that contractors submit compensation data in a focused review – either at the employee-level or in the aggregate.

Compliance Checks

What’s new?

  • Nothing, really. The prior compliance check letters required: (a) AAP results for the preceding year; (b); Examples of job advertisements, including listings with state employment services; and (c) Examples of accommodations made for persons with disabilities.  These are the same requirements in the new version.
  • Potential OFCCP Citation Error. This one’s a bit technical– sorry in advance.  The prior compliance check letter cited 41 CFR § 60-1.12(b) (Record retention) as the authority for the requirement that contractors submit the prior year’s AAP results during a compliance check.  But it cited 41 CFR §§ 60-300.44 and 60-741.44 (Required Contents of affirmative action programs) for the same obligation regarding veterans and individuals with a disability.  The new letter cites 41 CFR §§ 60-2.1(b) (Who must develop affirmative action programs) for the obligation under the Executive Order, while leaving the veteran and disability cites unchanged.  We suspect the Agency intended to update the Executive Order cite to reference 41 CFR §§ 60-2.10(b) (Contents of affirmative action programs) and anticipate that another request to OMB to revise this citation is likely.

What did OMB remove?

  • Submissions of Complete AAPs. OMB did not approve OFCCP’s request that contractors submit its written AAPs prepared under Executive Order 11246 (race/ethnicity and sex), Section 503 (disability), and VEVRAA (veterans).

Establishment Reviews

What’s new?

  • Assessment of Personnel Process. As in the focused review letters, the obligation to submit the date the contractor performed its most recent assessment of personnel and the date of its next scheduled assessment has been replaced with a mere “description of the review.”
  • Assessment of Physical and Mental Qualifications. Here too, the obligation to provide the date of the most recent assessment of the physical and mental qualifications and the date for the next assessment has been replaced by “the schedule for the review.”

What did OMB remove?

  • Subcontractor Identification. OMB rejected OFCCP’s request that contractors submit a specially created list of the subcontractor names and locations for the three most recently awarded subcontracts.
  • Internal Promotions Pools. OMB removed the potential obligation that contractors identify the race and gender demographics for the internal pools from which internal promotions were selected from the final letter.  It is likely that OFCCP will continue to begin its evaluation of promotion decisions in an audit by comparing the promotion decisions against the prior year workforce demographics.  This decision, however, raises an interesting question regarding what OFCCP’s future scheduling letter on promotions focused reviews will ultimately include.

In sum, the most significant changes were not incorporated in the new scheduling letters – but changes do exist.  For many employers, this will likely come as a relief.

Should you have any questions let us know how we can help.

At long last, OMB has finally approved OFCCP’s request to modify its scheduling letters, as well as approve a scheduling letter for VEVRAA Focused Reviews.

At first glance it appears the scheduling letters and itemized listings more resemble OFCCP’s current scheduling letters and not the Agency’s initial requested modifications.

Notably, the question requiring contractors to report on their known sub-contractors is not part of the final version of the letters.

We will bring you additional insights and thoughts in the coming days so stay tuned.

When federal contractors share sensitive data – including pay data – with the OFCCP, data security is always a concern.  Is your data any less secure during the COVID-19 pandemic as more compliance officers than usual work from home?

Last week, OFCCP addressed this concern with a bulletin entitled, “OFCCP is Committed to Keeping Your Data Safe”.  At the heart of OFCCP’s bulletin, the Agency says that OFCCP’s network storage of contractor data

is only accessible using government-issued computers through the agency’s secure VPN.

Regarding the secure transfer of data to and from the Agency (as opposed to data storage), OFCCP says contractors “have the option of sending their data to OFCCP via their company’s secure data or email portals.”

Consistent with its efforts to encourage federal contractors to consider functional affirmative action plans (FAAPs) as an alternative to establishment AAPs, OFCCP last week issued a bulletin stating it is open for FAAP business.  Because FAAPs require OFCCP approval and updating, OFCCP does not want current circumstances to deter contractors from FAAPs.

In an effort to streamline FAAP processes, OFCCP says,

  • For FAAP contractors, and contractors interested in entering into FAAP agreements, it is available to meet by phone, WebEx, and Skype.
  • All requests for agreement modifications, new application requests, updates, and certifications of FAAP agreements will be emailed for review and electronic signature.
  • Finalized agreements will be signed by the Director and returned to the contractor electronically.

OFCCP encourages contractors with FAAP questions to reach out to OFCCP’s FAAP unit at OFCCP_FAAP-UNIT@dol.gov.

The Coronavirus Aid, Relief, and Economic Security Act (CARES) provides potential reimbursement to federal contractors whose employees (1) cannot perform work on a “site that has been approved by the Federal Government ” during the coronavirus (COVID-19) public health emergency due to facility closures or other restrictions, and (2) cannot telework because their job duties cannot be performed remotely.

Click here for the full article from our JL Government Contractor’s Industry Group.

The National Industry Liaison Group has worked with OFCCP leadership to clarify contractor obligations and OFCCP expectations for compliance reviews that are moving forward during this unprecedented time.  The below are in addition to the National Interest Exemption recently announced by the Agency.

By e-mail, NILG shared OFCCP has informed it of the following protocols the Agency will put in place going forward:

  • Grant an automatic 30-day extension for submission of AAPs after receipt of Scheduling Letter
  • Grant an automatic additional 30-day extension to contractors who submit their written AAP narrative within 60 days of receipt of scheduling letter (i.e. provide another 30 days for submission of all data reports and analyses)
  • Grant an automatic extension of 14 days, and more commonly of 30 days, for contractor response to information requests, with opportunity for further extensions as needed
  • Conduct 503 focused review onsites via video or phone conference only until contractors begin resuming normal operations

The protocols will allow OFCCP to continue operations to the extent feasible given the current emergency as well as address contractor concerns as their operations become impacted by the pandemic.  The key, as it always should be, is for contractors to communicate with OFCCP during an audit to the best extent possible.

The OFCCP and the NILG recommend contractors concerned about receiving Scheduling Letters during the emergency consider providing an email address for the responsible contractor representative to the applicable Regional Director, with a copy to Deputy Director Patricia Davidson at  Davidson.Patricia@dol.gov.  The OFCCP assures the NILG that

contractors providing this information will receive the Scheduling Letters via email in addition to the mailed copy.

OFCCP and NILG recommend that “contractors who believe the OFCCP is not taking the pandemic emergency into sufficient account, either in general or in a relation to a specific audit,” contact the OFCCP Omsbud, Marcus Stergio,  Stergio.Marcus@dol.gov or 202-693-1174.

NILG and the contractor community appreciate Director Leen’s and the Agency’s swift attention to these matters during these trying times.

Be Safe and Stay Well.

As an update and a clarification to the below post we have learned from EEOC that there is not currently a deadline in place for submission of the 2019 EEO-1 reports.  In fact, EEOC currently does not have authority to collect 2019 EEO-1 Component 1 data.

Since the advent of Component 2 pay data reporting, the deadline for filing EEO-1 reports has been March 31 annually.  Because its authority to collect data pursuant to the previously used EEO-1 form expired September 30, 2019, EEOC has had to seek renewal of authority to collect data using the EEO-1 form, and as a result there is no deadline for submission.

The following appears on EEO-1 Survey login page:

The EEOC is currently in the process of seeking approval under the Paperwork Reduction Act (PRA) to collect the EEO-1 survey for 2019, 2020, and 2021. The EEOC is seeking to collect Component 1 of the survey and to discontinue the collection of Component 2 pay data. See, EEO-1 30-Day PRA Notice. The opening of the collection, as well as the new deadline date, will be announced by posting a notice on the EEOC home page and sending a notification letter to eligible EEO-1 filers. When the survey opens, the EEOC will provide online resources to assist filers with their submissions and the EEOC’s helpdesk will be available to respond to filer inquiries and to provide additional filing assistance (including, for example, guidance on processing mergers and acquisitions and other corporate changes).”

As always we will be back with any new updates.

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Although we are about a week from the current March 31, 2020 deadline for filing 2019 EEO-1 reports, the EEO-1 Portal has yet to open.

That is due, at least in part, to the fact the fact EEOC does not yet have authority to continue to collect Component 1 race or gender data.  On Friday, however, EEOC filed another request for approval with the Office of Management and Budget that, in a bit of housekeeping, seeks a new “control number” that unties the Component 1 data from the prior control number that also authorized collection of Component 2 pay data.  In September 2019, EEOC requested approval to collect Component 1 data under the prior control number, and announced that it would not seek to collect Component 2 pay data.

Aside from the housekeeping effort, EEOC also says that if, in the future, it seeks to again collect pay data, it will provide advance notice and allow for public comment.  In its notice, EEOC says:

Based on the Commission’s evaluation of the public comments…and the agency’s own burden calculations, and because the PRA requires an agency to demonstrate that the practical utility of the information collection outweighs the burden of the collection, the Commission cannot justify continuing to collect Component 2 data.

The EEOC believes that there should be a transparent and open process, aligning with the recommendations in the EEOC-commissioned 2012 study from the National Academy of Sciences (NAS), entitled “Collecting Compensation Data from Employers,” (NAS Study), that the EEOC:

  1. Develops a plan for using pay data before initiating any data collection. Clearly articulating the ultimate uses of the data will help determine both which data elements need to be collected as well as the best approach to collecting the data to ensure the validity, reliability, and utility of the data collected.
  2. Initiates a scientifically sound pilot study to test the pay data collection instrument and the plan for the use of the data; and
  3. Uses a definition of compensation that is measurable, collectable, and meaningful.

The public will have 30 days to comment on EEOC’s request for approval to collect Component 1 data, which also means that employers and federal contractors will not be able to file 2019 EEO-1 reports for at least another 30 days…and probably more.

Please stay tuned and we’ll let you know as soon as we hear anything about a new deadline.