After two rounds of public comments, OFCCP implemented Directive No. 305 earlier this month with little fanfare.  Directive 305 provides guidance to employers who desire to create affirmative action plans based on functional business units rather than by individual establishment – also known as FAAPs.  Implementation of Direction 305 rescinds the previous FAAP directive, in effect since March of 2002, and has put an end to the year-long suspension on the Agency’s acceptance of requests to develop or renew agreements with employers who wish to develop FAAPs.

There are several changes to note in the new FAAP directive – the first of which is the lengths employers have to go to be approved to develop a FAAP.   The new Directive has eliminated the provision providing for automatic approval if the OFCCP does not act upon a FAAP request within 120 days.  Contractors are now required to receive written approval by the OFCCP Director before developing (or renewing) a FAAP. 

Another addition to the process is the guarantee of at least one OFCCP FAAP audit during the 3 year duration of an approved FAAP in order to be eligible for renewal– a burden not imposed on employers who choose to prepare establishment based AAPs. 

Given the significant changes put into place by Directive 305, it is imperative employers who prepare, or are thinking of preparing, functional affirmative action plans carefully review and evaluate OFCCP’s new process and its potential compliance implications.

Kicking off the new year, the Department of Labor has announced Executive Order 13495, “Non-displacement of Qualified Workers Under Service Contracts,” will go into effect on January 18, 2013. 

Under Executive Order 13495, when a new contract succeeds an existing government service contract, the contractors and subcontractors under the new contract are required to offer the predecessor contractors’ employees a right of first refusal of employment.  This is a required obligation, however, only if the work performed by the employees under the new contract is the same or similar and at the same location as the work under the prior contract.

For more information about the implementation of Executive Order 13495, including compliance tips for affected contractors, check out the Jackson Lewis Workplace Resource Center.

Changes are afoot at OFCCP.  We have learned that long-time OFCCP Pacific Region Director Bill Smitherman will retire at the end of the month.  Director Smitherman held the Pacific Regional Director position for many years, initially as Acting Director before assuming the position on a full-time basis several years ago.  His replacement has not been announced.  We can think of a few OFCCP management-level personnel who may be good picks for the job.  

OFCCP also will look outside the Agency for candidates.  The Pacific Regional Director position sits in the Regional Office in San Francisco.  Interestingly, OFCCP National Director Pat Shiu lived and worked in San Francisco for many years before relocating to DC to take her OFCCP leadership position.  In her jobs prior to joining the Agency, Director Shiu acted as legal counsel on behalf of plaintiffs in employment and housing related class-action discrimination lawsuits. One possibility is that the Agency may consider former colleagues of Ms. Shiu based in the San Francisco area for the soon-to-be-vacant Pacific Regional Director position.  Stay tuned.

Jackson Lewis Partners Mickey Silberman and Matthew Camardella recently delivered a webcast regarding anticipated Office of Federal Contract Compliance Programs initiatives under a second-term Obama Administration.  Given the OFCCP’s latest wave of advance notification letters these insights into the Agency’s regulatory agenda and what you can do to prepare are all the more instructive.

 Click here for highlights from the “Election 2012 Is Over – What Can We Expect from OFCCP?” webcast.

We just spoke with OFCCP’s National Office and confirmed 1,762 CSALs were sent out last week to individual establishments.   There were no Functional Affirmative Action Plan (FAAP) notifications and no Corporate Management Compliance Evaluations (CMCEs) notifications sent in this latest round of CSALs.

OFCCP confirmed that this is the first round of CSALs for OFCCP’s current fiscal year which began October 1, 2012.  The Agency has not decided whether there will be a second round of notices.

The OFCCP National Office informed us that the Agency is continuing to assess moving forward with the technology for the web-based notification system.  The Agency is also considering received feedback from several employer associations about potential confidentiality concerns with the CSAL information being available to the general public on OFCCP’s website.

Stay tuned for future updates . . .

With great fanfare OFCCP announced in August at the ILG National conference in Hawaii that it would be forgoing the mailing of advance notification letters to employers in exchange for publishing the list of likely compliance reviews via the Agency’s website.  Despite its previous announcement of a move to the web-based notification system, last week OFCCP mailed out hundreds of Corporate Scheduling Announcement Letters (CSALs) to ensuing employers.

 As you may have experienced, rolling out a new system (of any type), takes time.  By opting to send out hard-copy CSALs this time around, the Agency doesn’t have to experience any delay in slating companies for audits while waiting for the online notification system to get up and running.

 Like the last round of letters, these CSALs appear to have been sent directly to the facility to be audited and are addressed ambiguously to “Human Resources Director.”  Thus, it’s time again to get the word out to those in the field to keep their eyes open for correspondence from the OFCCP.

 With Obama’s Re-election we anticipate OFCCP will continue to enhance its already vigorous enforcement efforts.  This includes the Agency’s growing reluctance to grant extension requests.   OFCCP likely will point to the latest round of CSALs as justification for continued denial of request for additional time to submit an audit response.  Given this, employers who receive advance notification of a compliance review should take advantage of the “heads up” and start preparing for a compliance review . . . NOW.

 As an update to our recent post discussing the latest chapter of the OFCCP/TRICARE saga, OFCCP has asked the United States Department of Labor’s Administrative Review Board to reconsider their “deeply divided” decision in which a plurality of the ARB decided the National Defense Administration Act (NDAA) precluded OFCCP’s jurisdiction over Florida Hospital.  

 In requesting the ARB take another look at the issue, OFCCP explicitly stated the lack of a majority ruling on OFCCP jurisdiction under “Prong One” of the Agency’s definition of a subcontract

means the only way OFCCP can obtain a ruling on this issue is to continue to notice TRICARE network providers for compliance reviews where Prong One is applicable.

 The Agency states further that, without resolution of this issue by the ARB, 

 “OFCCP will be forced to bring another enforcement action [a.k.a. Litigation] against one or more TRICARE network providers” in order to obtain resolution of this critical question.

 In its Motion for Reconsideration, OFCCP argued the ARB’s recent “splintered decision” left unanswered the “critical issue” of whether the NDAA prevented OFCCP from asserting jurisdiction over Florida Hospital (and similarly situated healthcare industry employers) on the basis of Florida Hospital’s performance of services “necessary to the performance” of the TRICARE contract – also referred to as “Prong One” under OFCCP’s definition of a subcontract. 

 As we mentioned before, despite last month’s ruling, the question of OFCCP’s jurisdiction over employers involved in TRICARE remains unsettled, and it looks as though OFCCP will take the opportunity to continue to flex its compliance muscle . . .

As the country honors all of the men and women who have sacrificed to serve our country, it is a good time to assess compliance with veteran focused OFCCP obligations.  

 Not missing a chance to focus on employing veterans, Department of Labor Secretary Hilda Solis issued a statement urging employers to commemorate the Veterans Day holiday by hiring veterans saying

 “the best way we can honor our veterans is to employ them.” 

She went on to further underscore the assistance veterans need in gaining employment by citing the dropping unemployment rate for Iraq and Afghanistan veterans.

Despite the fact OFCCP has been unable to finalize its proposed veterans’ regulations, the Agency is readily issuing violations to employers in connection with veterans obligations. 

Specifically, OFCCP is expecting employers to:

  •      Be able to demonstrate a commitment to outreach and not appear as having just gone through the motions.
  •      Monitor the number and quality of applicants referred by these sources and, as appropriate, change these sources.
  •      List all appropriate jobs with state employment services

It’s too late to start thinking about good faith recruitment efforts and posting with the state once you receive an OFCCP scheduling letter.  You need to think about getting into compliance now because OFCCP will expect to see 12 months worth of documentation in an audit. 

If recent OFCCP enforcement trends aren’t motivation enough to get into compliance, the fact that we can only expect to see continued enhanced enforcement for veterans and individuals with disabilities in a second Obama Administration should be.

Jackson Lewis  Webinar – November 14th 2:00 EST

 As most of the country watched last night, Barack Obama won re-election as President of the United States.  During his first term in office, the President made pay equity one of his top civil rights enforcement agenda items – and OFCCP responded by becoming more aggressive in its enforcement of pay discrimination.  It remains to be seen how the agency will respond to another four years in an Obama administration, but its likely OFCCP will re-double its efforts in the area of pay discrimination enforcement.

In line with the President’s civil rights agenda for the increased protection of employee rights, OFCCP has recently proposed several regulatory measures that, if passed, will have a profound impact on the contractor community.  These include:

  • Veterans Regulations
  • Regulations regarding Individuals with Disabilities
  • Proposed Changes to the Scheduling Letter
  • Pay Data Collection Tool

Up till now OFCCP has been unsuccessful in actually implementing these propositions.  The question is whether the Agency will have greater success finalizing these initiatives in a second Obama presidency and what type of modifications (if any) the Agency will need to get them “on the books.”

 Though the question of who will be sleeping in the White House for the next four years has been decided, the question of whether OFCCP will increase is already more aggressive enforcement approach remains open – though if the last four years have been any indication, employers need to prepare for increased enforcement activity.  

 Please join us on November 14, 2012 as we continue this discussion of the impact of Obama’s re-election on OFCCP’s enforcement agenda.

We hope this post finds our friends and colleagues back East safe and recovering quickly from the effects of Sandy.

 We wanted to pass along a quick note that we have heard from the EEOC.   While the Agency is  not granting formal extensions for EEO-1 filings, it will delay issuing Notices of Violations for 2 weeks to aide those affected by last week’s storm.

 In addition, we have learned the VETS office is accepting formal requests for extensions for the filing of VETS-100/A reports.  The Agency will provide you with a confirmation number once you make the request and should call back with a response; however, the Agency has received a high volume of calls because of the storm so responses could be delayed.