Category Archives: OFCCP Compliance & News

Proposed Merger of the OFCCP & EEOC – The Trump Administration Wants to See This Happen!

It’s officially on the table.  The 2018 budget proposal released yesterday by the Trump Administration officially calls for the merger of the OFFCP with the EEOC by the end of fiscal 2018 (September 30, 2018).  The proposal states:

“The proposed merger will benefit employers, workers, and the public by consolidating the oversight of federal equal employment opportunity under one roof.”

The budget also reduces funding for the OFCCP from $105M to $88M, a reduction of 16%.  This is expected to reduce Agency headcount from 571 employees in 2017 to 440 in 2018, a reduction of 131 employees or 23%.

The proposal also calls for establishing two Skilled Regional Centers, located in San Francisco and New York staffed with “…highly skilled and specialized compliance officers capable of handling various large, complex compliance evaluations in specific industries, such as financial services or information technology.”  The budget goes on to state that having these Centers, “…reduces the need for a network of field area and district offices.”  All of this points to the elimination of many of the District and Regional offices, and their staffs.

It is not clear what is meant by the phrase, “…handling various large, complex compliance evaluations…”  It could imply conducting compliance reviews of multi-establishment locations of a single contractor instead of the current focus on a single establishment.  This would be a major new development in the scope of compliance evaluations as well as conducting self-audits.

The budget anticipates that the Agency will continue to focus on systemic compensation discrimination and that 35% of conciliation agreements will be based on pay.  The other major focus will be on “…larger federal and federally-assisted construction projects…”

As an aside, since the proposal specifically references banks and IT organizations, this should be taken as a heads-up to these organizations that they should be anticipating in-depth reviews of their compensation practices. 

Preliminary reactions from the U.S. Chamber of Commerce and civil rights organizations have been to oppose the merger.  It is important to note that this is merely one of many proposals.  Comments from Senate and House Republicans have included statements that the budget will be “dead on arrival” when it reaches the respective legislative bodies.

It is important to keep in mind that even if the two Agencies do not merge, the OFCCP may still be looking at the loss of 16% of its funding and 23% of its staff as well as the fundamental restructuring of its operations.  This is just the opening salvo in the 2018 budget war.  Current indicators point to the legal concept of Affirmative Action and the associated compliance obligations continuing.  However, whether or not there is a merger, the enforcement protocols could be vastly different from what contractors have grown accustomed to under past administrations.

These remain interesting times.  We will keep you advised as further developments occur. 

The Future of the OFCCP, the Executive Order and Affirmative Action

It is with some trepidation that I even bring up this topic. However, as a practitioner of close to 40 years in the areas of affirmative action and EEO, I find myself more uncertain than ever before about the future of the Office of Federal Contract Compliance Programs (OFCCP), Executive Order (EO) 11246, and the legal principles behind affirmative action.

Ever since the election of Donald Trump, the future of affirmative action and the OFCCP has been a topic of discussion and conjecture in the legal, HR, and various stakeholder communities.  To the extent that commentators have been willing to weigh-in on the topic, most predictions have come down on the side that both the OFCCP and affirmative action as a legal principle are for the most part, “safe.”  However, just how “safe” things really are is far from certain.

On March 13, 2017, President Trump signed a new Executive Order directing the head of the Office of Management and Budget (OMB) to review every executive branch agency to identify “where money can be saved and services improved.”  OMB is to consider “… (ii) whether some or all of the functions of an agency, a component, or a program are redundant, including with those of another agency, component, or program…” and “… (iii) whether certain administrative capabilities necessary for operating an agency, a component, or a program are redundant with those of another agency, component, or program…”

Then, on March 16, 2017, President Trump’s 2017 budget was released.   The budget proposes a 21% reduction in funds for the Department of Labor (DOL).  There is nothing that indicates that the reductions will be spread evenly throughout the Department.  Some agencies and programs could experience larger reductions than others.

Six days later on March 22, 2017, Alexander Acosta, the nominee for Secretary of Labor, had his Senate confirmation hearing.  During the hearing, there was no discussion regarding his take on the future of the OFCCP.  However, in response to questioning, Acosta responded that he would follow the March 13, 2017 executive order.  Continue reading The Future of the OFCCP, the Executive Order and Affirmative Action

Corporate Scheduling Announcement Letters (CSALs) Mailed Out By OFCCP

The first CSAL mailing since 2014 was issued on February 17, 2017.  The letters were sent directly to establishments to the attention of the Human Resources Director.

CSALs are mailed directly to all establishments identified on the scheduling lists developed for a given scheduling cycle. Unlike previous years, OFCCP will not send notice to a corporation’s headquarters. Instead, the CSAL directs the establishment to forward the notice to corporate headquarters, if such is corporate policy.

There are 800 establishments on this first mailing for FY 2017, which covers 29 industries (based on reported NAICS codes) and 375 distinct companies.  This first release also includes 30 Corporate Management Compliance Evaluations (CMCEs). This means some organizations will receive letters for multiple establishments and some may receive a CMCE letter at their headquarters location.  OFCCP has not confirmed if/when another round of mailings will go out.

However, OFCCP clarified that a contractor’s establishment may be selected for a review outside of those receiving a CSAL notice.  The revised FAQ states, “These compliance evaluations may be scheduled by OFCCP when it receives credible information of an alleged violation of a law or regulations the agency enforces, including those deriving from individual or class complaints filed with the EEOC, or state or local fair employment practice agencies (FEPAs) that allege employment discrimination covered under the laws that OFCCP enforces.”

Corporate compliance officials should contact their local HR representatives at their company’s establishments to ensure they are aware that a letter from OFCCP or the Department of Labor may arrive in the next few days. Additionally, they should be aware that a CMCE letter may arrive at their corporate headquarters. Since OFCCP has once again given contractors advance notice of upcoming audits, it is highly recommended that employers take full advantage of this extra time to ensure they are prepared to submit complete and compliant AAPs and supporting documentation once they receive the audit scheduling notice.

Please contact us if there are any questions regarding the above.

New OFCCP Scheduling Letters Being Released?

Two independent sources have reported that the OFCCP is sending out new scheduling letters that were not preceded by the release of a Corporate Scheduling Announcement Letter (CSAL).  Previously, the OFCCP sent CSAL letters to contractors notifying them of the locations where the Agency planned to conduct compliance reviews.  The CSALs gave contractors a heads-up on pending reviews enabling them to begin preparation for the receipt of the scheduling letter.  In the past, CSALs had been sent out twice a year.  More recently, CSALs went out only once a year.  The last round of CSALs were sent out on November 10, 2014.  Compliance review activity for 2015 and 2016 was based on this last mailing.

While none of our clients have received a new scheduling letter, other sources are reporting that some contractors are receiving OFCCP scheduling letters for establishments not listed in the last CSALs.  These scheduling letters are being sent directly to the establishment the OFCCP plans to review.  The receipt of the scheduling letter triggers the thirty (30) day time period in which the targeted contractor must collect the data requested, conduct their own analysis of the data, and submit the data to the OFCCP.

A scheduling letter will typically be addressed to the General Manager or the HR Manager.  The letter is sent by “Certified Mail, Return Receipt Requested.”  The date the “Return Receipt Requested” card is signed triggers the start of the 30-day clock, not the date that the letter actually gets to someone who knows what the letter means and what is required.  For example, if the letter arrives at an establishment on March 1, 2017, addressed to the establishment’s General Manager who does not open it until March 10th, and he/she does not give it the HR Manager until March 17th, who does not notify corporate HR until March 20th, the Company only has ten (10) days in which to respond (by March 31st).

As such, we strongly recommend that all AAP locations be notified to stay alert for a possible letter from the OFCCP.  The OFCCP may call the facility prior to the receipt of the letter to confirm the name of the General/HR Manager as well as the correct mailing address.  Any calls from someone identifying themselves from the U.S. Department of Labor should be immediately reported to corporate HR and to our office if you work with our firm.  The receipt of any letter from the OFCCP should likewise be reported immediately.

Please contact us if there are any questions regarding the above.

Disability Self-ID Form Renewed for Three Years

On January 31, 2017, the Office of Management and Budget (OMB) approved the renewal of the Voluntary Self-Identification of Disability Form for an additional three (3) years.  The form now expires on January 31, 2020.

Although no changes were made to the form, contractors must immediately begin using the form with the expiration date “1/31/2020” in the top-right corner.

Depending on your organization, you may need to update your career site or applicant tracking system where the forms exist, as well as update all paper copies of the form.  To avoid any confusion, we recommend discarding all copies of the prior version.

Be advised that because the Self-ID form is an OMB-approved form, its content cannot be altered or changed.

For copies of the renewed form in English and other languages, please visit:

https://www.dol.gov/ofccp/regs/compliance/sec503/Self_ID_Forms/SelfIDForms.htm?utm_campaign=reengage2B&utm_medium=email&utm_source=govdelivery

If you would like to discuss the Self-ID form in more detail as it pertains to your specific organization, please do not hesitate to contact us.

EOs & Regulations – Promise to Repeal

A cornerstone of President-Elect Trump’s election campaign was the promise to roll-back and eliminate regulations and Executive Orders (EOs) issued and implemented by the outgoing administration.   In just the employment arena affecting federal contractors, this includes:

  • EO 13658 – Minimum Wage for Federal Contractors
  • EO 13665 – Pay Transparency
  • EO 13672 – LGBT regulations
  • EO 13673 – Fair Pay and Safe Workplaces (“blacklisting” – currently blocked by federal courts)  EO 13706 – Paid Sick Leave
  • New regulations for affirmative action for Veterans and the Disabled
  • New regulations on discrimination on the basis of sex

In addition, there are regulations, rules, and expanded/new interpretations of existing rules affecting all employers regarding eligibility for overtime (blocked last week by a Texas district court); expedited union representation elections; “ban-the-box” limitations; increased OSHA fines; the Pregnant Workers Fairness Act; and the revised EEO-1 report requiring compensation data.

Continue reading EOs & Regulations – Promise to Repeal

Prohibitions Against Pay Secrecy

As announced last September, OFCCP’s rule on Prohibitions Against Pay Secrecy Policies and Action is now effective.  The rule applies to new or modified federal supply and service contracts and subcontracts, as well as federally assisted construction contracts of more than $10,000 in value entered into or modified on or after the effective date of January 11, 2016.  It also applies to contracts or subcontracts that, in the aggregate, total more than $10,000, or financial institutions holding federal funds, or who are issuing and paying agencies for U.S. savings bonds in any amount.

The rule prohibits federal contractors and subcontractors from discriminating against employees and applicants who discuss, inquire about, or disclose information regarding compensation acquired through ordinary means, such as a discussion between coworkers or through an anonymous note from a coworker.  Compensation consists of all items currently defined by the OFCCP including elements such as base pay, commissions, bonuses, stock options, incentives, overtime, shift differentials, vacation and holiday pay, etc.  The rule does not require employers to disclose information regarding compensation in response to a demand from an employee or an applicant.

Continue reading Prohibitions Against Pay Secrecy

New Posting & Notice Requirements – CORRECTION

This is a correction to last week’s New Flash on new posting and notice requirements under the “Pay Secrecy” regulations. In last week’s release, it was stated that additional verbiage was required to incorporate by reference the new regulatory language into contracts and purchase orders.
This was incorrect. No new language is required. Rather, the existing reference to 41 C.F.R. Part 60-1.4 will meet the incorporation by reference obligation.

The recommended language appears below:

EEO CLAUSE
TO BE INCLUDED ON ALL COVERED CONTRACTS, SUBCONTRACTS AND PURCHASE ORDERS
As applicable, the provisions of the Equal Opportunity Clauses pursuant to Section 202 of Executive Order 11246, as amended, and 41 CFR Section 60-1.4; as well as 29 C.F.R. Part 471, Appendix A to Subpart A, are herein incorporated by reference. Further, sellers who (1) are not otherwise exempt as provided by 41 CFR 60-1.5, (2) have 50 or more employees and, (3) have a contract, subcontract or purchase order amounting to $50,000 that is necessary to the completion of a covered federal contract or subcontract are hereby notified of their obligations to file EEO Standard Form 100 and to prepare an affirmative action plan(s) as required under the regulations set forth above.
This contractor and subcontractor shall abide by the requirements of 41 CFR §§ 60-300.5(a) and 60-741.5(a). These regulations prohibit discrimination against qualified individuals on the basis of protected veteran status or disability, and require affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified protected veterans and individuals with disabilities.

We apologize for any confusion or inconvenience caused by this error.

Reminder: New Posting And Notice Requirements

This is a reminder that there are two new notice and posting requirements under recent OFCCP regulations. The first is adding the “EEO is the Law” Poster Supplement to comply with the LGBT Discrimination and Pay Secrecy regulations. The LGBT discrimination regulation was effective April 8, 2015 and applies to either new contracts entered into or contracts modified after that date. The regulation requires the addition of “Sexual Orientation/Gender Identity” as prohibited bases of discrimination. EEO policies in employee handbooks, union contracts and policy statements posted on bulletin boards must be updated to include these bases.

These bases must also be added to the “EEO is the Law” poster. While a new poster has not yet been published, the additional language has been included in a supplement that is to be posted along with the prior version. A copy of the supplement is attached. This should be printed out and posted with the current version of the poster. 

In addition, what was originally called the “Non-Retaliation for Disclosure of Compensation Information” under Executive Order 13665, is now referred to as “Prohibitions Against Pay Secrecy Policies and Actions” in the implementing regulation. This rule forbids contractors from prohibiting employees and applicants from voluntarily sharing information regarding their compensation with each other or from retaliating against employees or applicants if they do share such information. It does not require contractors to divulge pay/compensation information upon request. It also prohibits the disclosure of compensation information by employees who obtain such information as part of their essential job functions. So for example, a human resources supervisor or generalist could not disclose information about someone else’s pay that was obtained in the performance of the HR professional’s job. However, they could disclose information about their own compensation/wages to others. 

This regulation is effective January 11, 2016 and applies to contracts either entered into, or modified after that date. The regulation has two notice/posting requirements. The first is the posting of the “Pay Transparency Policy Statement” on bulletin boards and inclusion of the Statement in employee handbooks, and policies. A copy of the “Pay Transparency Policy Statement” is likewise attached. The statement must be used exactly as written and without modification. 

The second part is the inclusion of the statement in the EEO clause that is included in all covered contracts and subcontracts. Contractors/subcontractors may also meet this obligation through “Inclusion of the equal opportunity clause by reference” in the covered documents. Sample language referencing the EEO Clause is attached. 

In conclusion, while we have not yet seen the OFCCP inquire into the EEO is the Law Poster Supplement, and the pay secrecy rule will not be effective for another two months, it would be prudent for contractors to start preparations to be in compliance as soon as possible.

Threshold For Coverage Under VEVRAA/4212 Increased To $150,000 For A Single Contract

Effective October 1, 2015, the threshold for coverage under Vietnam Era Veterans Readjustment Assistance Act (VEVRAA) increased to $150,000 for a single contract. This means unless a contractor/subcontractor holds a single covered federal contract or subcontract of at least $150,000, they are not required to comply with the provisions of VEVRAA, including the preparation of an affirmative action plan (AAP) for protected veterans, listing covered job opportunities with the appropriate state jobs delivery system, or engaging in outreach for protected veterans.

An infographic published by the OFCCP showing the coverage thresholds for Executive Order 11246, Section 503 of the Rehabilitation Act, and VEVRAA/4212 is attached. Please note that depending on the value of the contract, a contractor/subcontractor may have to prepare an AAP for minorities, females and the disabled, but they may not have to do so for Protected Veterans.

It is recommended that contractors and particularly subcontractors, review the value of their federal contracts/subcontracts to determine whether the value of those contracts meets the jurisdictional threshold amount.