Compliance Update:OFCCP Releases Proposed Changes to Scheduling Letter

The Office of Federal Contract Compliance Programs (OFCCP) has released a revised version of the scheduling letters for compliance reviews and compliance checks. Both of these documents have been approved by the Office of Management and Budget (OMB) and are now in the public comment period. The proposed new letters are available here and the final version will likely be in place by October 2011. Comments are due to the agency by July 11, 2011, if you would like Berkshire to include your comments in our response, please email them to comments@berkshireassociates.com.

Item 8: The first major change to the itemized listing is item 8 in the support data. Item 8 is an entirely new requirement, asking for the establishment’s leave policies regarding the Family Medical Leave Act, pregnancy leave, and religious accommodations. If these policies are included in the company handbook, the OFCCP requests the handbook be submitted.

 

Item 9: There is no significant change to this request for any collective bargaining agreements in place at the establishment.

 

Item 10: No significant changes are made to the goal attainment request, except to clarify the request is for the immediately preceding plan year. Updated reports are required if the contractor is six months or more into the plan year when the scheduling letter is received.

 

Item 11: This requirement mandates contractors to provide data on employment activity for applicants, hires, promotions, and terminations, and to provide updated reports if the letter is received more than six months into the plan year. The proposed change requires contractors to submit employment activity by gender and by specific racial/ethnicity groups, well as by job group and job title. Additionally, there are some key changes to the analysis pool for each employment activity:

Hires: Contractors are required to submit the count of those applicants who did not disclose their race or gender.

Promotions: Contractors are required to submit the actual pool of candidates considered or who applied for the promotion by job group and by job title. 

Terminations: Contractors would be required to submit the actual pool of candidates considered for termination by job group and by job title and must specify if the termination was voluntary or involuntary.

Item 12: Contractors are required to submit compensation data for all employees “including but not limited to” full time, part time, contract, per diem, day laborers, and temporary workers. The “effective date” for the compensation data would no longer be the plan date, but a point in time as of February 1.

 

The proposed change removes the current standard of reviewing compensation in aggregate form, and reviews each employee on an individual employee level. Information submitted for each employee includes race/ethnicity, gender, hire date, job title, EEO-1 category, and job group. Employee compensation is defined as the base salary, wage rate, and hours worked. Additional compensation or adjustments should be indentified separately and includes bonuses, incentives, commissions, merit increases, geographic differentials, and overtime. The OFCCP encourages contractors to submit any other factors used to determine pay including education, past experience, duty location, department, and function. The last item requires contractors to submit organizational polices to reasonably explain compensation practices.

 

Item 13: This is a new requirement at the desk audit phase, although recently the agency has routinely requested the information in recent audits. This item asks contractors to submit the last three years of VETS-100 or 100A reports, copies of accommodation policies, and records of accommodations the organization has granted.

 

An interesting point about race/ethnicity is the breakdowns that are specifically requested are the five “old” race categories that are still in the implementing regulations. Most contractors have converted to the seven “new” race categories that are required in the EEO-1 report. In a directive issued in 2008, the OFCCP explicitly states two items of note: the only report that requires a racial group breakdown is the Organizational Profile (the workforce analysis or organizational display), and that AAPs that use either the five or seven racial categories are acceptable to the agency. The OFCCP can rescind this directive at any time, potentially putting contractors in a situation where they combine the seven races tracked for EEO-1 reporting purposes into five for AAP purposes.

 

Also included in the documents approved by OMB is a revised compliance check letter. It appears the OFCCP is reinstating compliance checks as a tool to review a contractor’s compliance. The compliance check is a quick review of documents consisting of three items: the results from the prior year’s affirmative action plan, samples of job advertisements and postings with the state, and samples of accommodations made for individuals with disabilities. Previously the compliance check was an onsite review. With the new compliance check, the contractor has the option to mail the information to the OFCCP within 30 days, or to make accommodations for an on-site review. If the information requested is not provided to the OFCCP or is not acceptable, then the establishment will be subject to a more extensive compliance evaluation.

 

Berkshire’s experts will monitor updates to these proposed changes and will issue updates as necessary. In the meantime, if you have any questions, please contact Berkshire at 800.882.8904 or email bai@berkshireassociates.com.