We just finished hearing from OFCCP in the second of two webinars on the Agency’s newly released Veterans and Disability regulations.  In both presentations OFCCP walked through a general background of the regulations and highlighted some of the significant changes and/or additions to the rules.  The Agency called the regulations “a more tailored and stream-lined approach that focus on contractor accountability.”

Director Shiu called in briefly during both presentations to make a few comments.  She notably stated in both sessions that the Agency did not have the expectation of contractors meeting the new benchmarks and goals in the first year, acknowleding in today’s webinar that “change doesn’t happen in a moment, it happens in a movement.”

With respect to the new “data collection” obligations under the regulations, OFCCP reported one of the intended purposes of the requirements is to have the contractor community “fill a data gap” that currently exists for the veteran and disabled individual populations.

Other nuggets of interest include the emphasis placed in both presentations that neither the VEVRAA or Secton 503 regulations “adopt the internet applicant rule” but instead were developed to “be consistent” with application of the rule, as well as well as the Agency’s clear intent to solidify it’s position on (and authority to) request information beyond the date of the scheduling letter.

OFCCP momentarily discussed in the context of the Section 503 regulations (and not at all during the presentation yeterday on the Vets regulations) the Agency’s decision to drop the requirement that contractor’s enter into specific “linkage agreements” with recruitment sources.  This was one of the proposed requirements that recieved significant feedback during the NPRM process.  In explaining its rationale for doing so the Agency said it wanted the contractor community to have the “flexibility” to engage in recruitment of thier own choosing and to analyze the effectiveness of those sources.

In closing, OFCCP emphasized these two webinars would not be the last time the contractor community would hear from the Agency on the new regulations -instead categorizing them as an “introduction” to the new obligations.

Along those same lines, we will continue to bring you regular insights, updates and compliance tips on these new regulations through this blog, webinars and other publications in the coming weeks so stay tuned.

As we shared with you on Tuesday, Vice President Biden announced that the Department of Labor’s Office of Federal Contract Compliance Programs has released its long-anticipated final regulations under Section 503 of the Rehabilitation Act of 1973, as amended (“Section 503”).

Section 503 prohibits covered Federal contractors from discriminating in employment against individuals with disabilities who are otherwise qualified and also requires that covered Federal contractors to take affirmative action with respect to such individuals.  Section 503’s nondiscrimination provisions apply to Federal contractors with government contracts or sub contracts in excess of $10,000 for the purchase, sale, or use of personal property or nonpersonal services (including construction).  Federal contractors with a government contract or subcontract of $50,000 or more and 50 or more employees are required to comply with the affirmative action plan (“AAP”) provisions of the final regulations.

The final regulations will become effective 180 days after the date of publication in the Federal Register, which is expected to happen soon.  This means that Federal contractors must begin preparing for these new changes now.

Under the final regulations, for the first time ever, Federal contractors will be required to collect disability status information from applicants for employment, using specific voluntary self-identification language to be developed by the OFCCP.  Invitations to self-identify as disabled will need to be extended both pre- and post-offer of employment.  Federal contractors also will need to extend the opportunity to voluntarily self-identify as disabled to current employees during the first year a contractor becomes subject to the new regulations and at least every five years thereafter.

The new regulations make significant changes to the Section 503 AAP requirements.  Like the placement and utilization analyses currently required for women and minorities under Executive Order 11246, Federal contractors will be required to conduct annual placement and utilization analyses for individuals with disabilities.  Specifically, Federal contractors will need to annually collect and analyze the following placement data points:

(1) the number of applicants who self-identified as individuals with disabilities;

(2) the total number of job openings and total number of jobs filled;

(3) the total number of applicants for all jobs;

(4) the number of applicants with disabilities hired; and

(5) the total number of applicants hired.

Federal contractors also will be required to conduct a utilization analysis to evaluate the representation of individuals with disabilities within each job group in their workforce against a 7% utilization goal for individuals with disabilities.  Smaller Federal contractors with 100 or fewer employees may apply the 7% goal to their entire workforce.

The final regulations also contain several other important changes, such as requiring that Federal contractors use specific language when incorporating the equal opportunity clause into subcontracts, providing for more extensive recordkeeping requirements, and requiring that covered Federal contractors take steps to ensure that individuals with disabilities are reasonably accommodated in the hiring process, particularly when a covered Federal contractor uses an electronic application system.

In the comings weeks we will provide additional insight and guidance into this and the newly released Veterans regulations through regular blog posts, alerts and webinars so enjoy the holiday weekend and prepare for the fun to really begin . . .

The wait is finally over – OFCCP has released the long-awaited Veterans and Disability Regulations.

The regulations have not yet been published in the Federal Register but soon will be and will take effect 180 days after publication.

We’re making our way through the materials and will be back soon with updates.

OFCCP has at long-last released the updated Federal Contract Compliance Manual (“FCCM”), which guides Compliance Officers during compliance evaluations.  OFCCP says the 500+ page manual “provides procedural and technical guidance on compliance issues based on current agency procedures and processes and improves consistency across the agency´s regional and field offices.”  This peek behind the curtain of OFCCP evaluations should prove to be a useful tool for understanding OFCCP’s investigative methods.

OFCCP has scheduled a Webinar for next Tuesday the 27th to introduce the revised FCCM.

We’ll be reading along with you and will be sure to share interesting nuggets as we go.

We’ve previously written about OFCCP’s July 30 and 31 submission of revised proposals for regulations on compliance obligations regarding Veterans and Individuals with Disabilities to the of Management and Budget (“OMB”) for approval.  If OMB determines no additional comment is needed to approve OFCCP’s regulations, OFCCP could soon published final versions in the Federal Register.

Following OFCCP’s recent submission of the regulations to OMB, members of the contracting community – including American Hotel & Lodging Association, Associated Builders and Contractors, Center for Corporate Equality, College and University Professional Association for Human Resources, Equal Employment Advisory Council, Society for Human Resource Management, and the United States Chamber of Commerce – sent a joint letter to the newly‑sworn‑in Secretary of Labor Thomas Perez  requesting a meeting with the Secretary and “key Department officials” to

explore the genuine barriers to increased employment for persons with disabilities and [to] work together to remove them” without creating “unachievable standards and burdensome requirements on federal contractors.

It is unclear whether such meeting with Secretary Perez will occur or if the letter and any follow-up will delay OMB’s final decision on OFCCP’s pending regulations.  Notably however, members of the some of th eabove organizations recently met with representatives from OMB’s Office of Information and Regulatory Affairs (OIRA) to discuss concerns with the proposed regulations.

Yet again, stay tuned. . . .  We’ll have more as it develops.

Spring is long gone but OFCCP has recently been doing some weeding… and replanting.  OFCCP recently released these Directives, some more notable than others:

  • Directive 312 rescinds Directive 261 which established annual best practice awards for federal contractors and service organizations.  The Exemplary Voluntary Efforts , Exemplary Public Interest Contribution and the Secretary of Labor’s Opportunity Awards were last awarded in 2008 but authorization for the awards expired in 2007.  Awards may be available in the future as OFCCP “is currently exploring innovative ways of recognizing federal contractors and community-based organizations for their efforts in promoting equal employment opportunity and affirmative action and will issue guidance in the near future.”
  • Directive 309 rescinded 33 “redundant or outdated” Directives and it certainly appears that none of them had any continuing significance.
  • In contrast, Directive 310, entitled “Calculating Back Pay as a Part of Make-Whole Relief for Victims of Employment Discrimination” works notable changes in the calculation of back pay.  For instance, the Directive purports to explain when OFCCP will use “Formula Relief” versus “Individual Relief” in calculating back pay.  Formula relief allows OFCCP to approximate back pay losses for an alleged group of victims, rather than prove individual losses – an important distinction.  Stay tuned for further blogs about this important Directive.
  • Directive 309 rescinds Directive 239 implementing OFCCPs previous Memorandum of Understanding (“MOU”) with the General Services Administration (“GSA”) regarding “Mega Construction Project.”  OFCCP’s updated MOU with GSA drops the threshold for such projects from $50 million to $25 million.  The MOU obligates GSA to notify OFCCP of Mega Construction Projects so that OFCCP can, from the outset of the project, be directly involved in ensuring that all project contractors and subcontractors comply with affirmative action requirements.  Thus, resources permitting, OFCCP may be directly involved in more mega projects.

It’s been an “exciting” 2013 and will certainly get more exciting when the proposed regulations for veterans and individuals with disabilities are released.

We’ve previously written that the EEOC appears to be converting allegations of individual claims into nationwide, systemic discrimination investigations and we have yet another example to share with you.

According to a recently filed complaint, EEOC is alleged to have engaged in “fishing expeditions” searching for potential class members and complaints of discrimination by directly emailing employees of a company engaged in a complaint investigation with EEOC at their work email addresses  – a hyper-aggressive and ground-breaking approach.

It is important to emphasize that these are just allegations, but – if true – this type of investigation side steps EEOC’s traditional investigation method of working directly with employers and counsel and cause for concern for employers.

This type of conduct is reflective of what appears to be a newly directed Agency perspective, as shared recently by OFCCP Director Shiu  that  OFCCP, EEOC, and the Department of Justice are squarely aligned with plaintiffs’ counsel and believe the role of the agencies is not to “simply enforce” but to actively “bend the arch of the law” in the right direction.

We will continue to cover this case – and its impact – as it develops.

In an opinion released last Friday, the District Court of Maryland granted summary judgment dismissing EEOC’s disparate impact criminal background/credit background lawsuit against the face-to-face marketing services company, Freeman.  This is the second high-profile criminal background back ground case in which EEOC has suffered a significant setback since the April 2012 issuance of the Agency’s Enforcement Guidance on the Consideration of Arrest & Conviction Records in Employment Decision.

The crux of the Freeman decision was EEOC’s inability to produce reliable, statistical analyses to support a claim of disparate impact as well as the Agency’s failure to identify as specific component of the Company’s background check process allegedly responsible for causing the disparate impact.   Because of these deficiencies, the court held the Agency was unable to satisfy its burden to establish a case of discrimination.

Disparate impact claims, if established, can be extremely difficult to defend.   Freeman defeated EEOC (for now; EEOC may appeal) by attacking the Agency’s ability to criticize Freeman’s actual practices.   One way to replicate Freeman’s success, whether subject to scrutiny by EEOC or OFCCP, is by establishing a multi-faceted criminal background review process that takes into consideration the Agency’s recommended targeted and individualized review.

We’ve learned that the VETS-100 and VETS-100A filing systems are currently down, and unable to accept submissions.   VETS hopes to resolve the issue shortly and suggests “checking back periodically” for updates.  Last year, technical difficulties with the VETS reporting system ultimately led to postponements of the filing deadline.  Obviously VETS hopes to avoid any postponements this year and as of now has not extended the September 30 deadline for filing.

We’ll keep monitoring the situation and will post updates as they become available.

As we have written previously, OFCCP continues to focus its investigations on adverse impact in hiring.  This week, one employer received good news in response to its challenge of an Agency finding.

On Monday, a Department of Labor Administrative Law Judge issued a ruling that limited the OFCCP’s approach to investigating and establishing racial discrimination among subminorities.  In the case of VF Jeanswear, OFCCP found adverse impact against a group of “non-Asian” job applicants; VF Jeansware challenged OFCCP’s analytical approach.  In short, the Court held OFCCP may not find discrimination in favor of one subminority group to the detriment of all others when there are no statistical indicators of any potential discrimination against any of the “other” subminority groups.   Relying on the text of the regulations, the Judge explained, contractors “are prohibited from employee selection procedures with a disparate impact on a ‘race’ or ‘ethnic group,’”  explaining further that a manufactured grouping that aggregates “all other” racial classifications “is neither . . . , either by regulatory definition or as used in common parlance.”

OFCCP has the opportunity to appeal this decision to the Administrative Review Board, so we will have to wait and see how this ultimately plays out.  But for now it seems employers have an argument to raise with the Agency over these types of aggregated analyses.