Compliance Update—OFCCP Regulatory Agenda

The Office of Federal Contract Compliance Programs (OFCCP) has been extremely busy in the first six months of fiscal year 2011. Based on the statistics provided during a recent regulatory web chat, the OFCCP has completed 44 financial conciliation agreements that amount to $5.6 million, and 657 job offers for 8,090 applicants or employees. In comparison to the same period last year, these numbers represent a 25 percent increase in conciliation agreements, and financial remedies have more than doubled. Below you will find detailed information on the updates outlined during the OFCCP web chat:

The comment period for the Notice of Proposed Rule Making (NPRM) is closed. Approximately 80 comments were received and the process of reviewing and analyzing all the comments has begun. The OFCCP anticipates publishing a final rule in the spring of 2012. This final rule will include the dates by which revisions to Affirmative Action Plans (AAPs) will be required. The OFCCP indicated it fully intends to move forward with these changes. The agency is in contact with other Department of Labor (DOL), federal, and state agencies to develop Veteran initiatives. One issue brought up to the OFCCP was in regards to returning Veterans lacking the necessary credentials to be hired while the NPRM holds employers accountable to "hiring benchmarks.” The OFCCP acknowledged this was a challenge and it will coordinate with the Department of Education and the Veterans Employment Training Services at DOL to see how the issue can be addressed.

 

This ANPRM is in the final stages of review and the OFCCP expects to publish it within the next few weeks. The tool under development will focus on the collection of compensation data. The OFCCP reiterated it has no plans to reissue the old EO Survey. Director Shiu also noted in response to the rescission of the statistical guidelines, contractors have made the OFCCP aware of the need to develop new guidance. The agency’s position on the use of tools for compensation analysis is that non-statistical tools that are consistent with Title VII principles can be used in conjunction with other evidence. In response to a question on the timeline of compensation data submission in the event of an audit, Director Shiu noted currently there is no set period of time for analyzing compensation data; rather it is determined on a case-by-case basis.

 

The OFCCP will publish the NPRM for public comment once the Office of Management and Budget (OMB) review is complete. Publication in the Federal Register is due in August 2011. Director Shiu declined to comment on the specifics of the NPRM when asked if it will mirror what is proposed in the NPRM for Section 4212.

 

This is scheduled to be published in February 2012. The OFCCP noted the current guidance is more than 30 years old. Employers’ policies, practices, and the nature and extent of women’s participation in the labor force have changed significantly. Hence, in this NPRM the OFCCP is proposing to create sex discrimination regulations that reflect today’s conditions.

 

The OFCCP is in the process of developing updated proposed construction regulations, and is planning to publish the proposal in November 2011. The agency is also reviewing minority and female construction goals and considering appropriate revisions that will update these affirmative action requirements. In response to avoiding duplication of efforts in reviewing highway construction contractors for compliance, Director Shiu noted the OFCCP has a Memorandum of Understanding (MOU) with the Federal Highway Administration, and the field offices coordinate on construction reviews.

 

 

·         New Compliance Manual: the new Federal Contract Compliance Manual (FCCM) will be published sometime this fall.

·         New Census data: The OFCCP is working with the Census Bureau, the Equal Employment Opportunity Commission (EEOC), and the Department of Justice in creating the special file. It will be available in the next 12 months. Berkshire’s projected date is the end of 2012.

·         Personnel Changes in OFCCP: The OFCCP is currently recruiting for a Regional Director in the Midwest region, and Deputy Regional Directors in the Northeast, Mid-Atlantic, Midwest, and Southwest and Rocky Mountain regions.

·         New scheduling letter: The comment period for the revised scheduling letter is closed. The OFCCP’s goal is to complete the review of comments, make revisions as needed, and return the document to OMB by end of July. Director Shiu indicated the OFCCP is following the Office of Information and Regulatory Affairs protocol and will provide an opportunity for a second round of comments on the proposed updates to the scheduling letter. The OFCCP does not anticipate the need to seek an emergency extension for the current scheduling letter, which expires on September 30, 2011. 

·         Functional Affirmative Action Plans (FAAP): The OFCCP sent notification letters to all existing FAAP contractors informing them they should contact the OFCCP regarding their intent to renew their agreements in accordance with the new directive. The new FAAP directive can be found here.

·         American Recovery & Reinvestment Act (ARRA) Reviews: ARRA funds for conducting compliance evaluations ended on September 30, 2010. The OFCCP is currently completing its reviews of contactors that were scheduled prior to that date.

·         Audit Trends: In response to a question on whether the OFCCP has observed any trends, Director Shiu noted when the OFCCP identifies major violations, contractors have invariably failed to implement internal audit procedures and corrective actions. 

·         Determination of Federal Contractor status: Director Shiu revealed the OFCCP uses several databases to make the determination of an employer as a federal contractor. Some examples provided were: Central Contractor Registration (provides registration information of federal contractors), Federal Procurement Data System—New Generation (captures all transactions related to federal contracts), EEO-1 Reports (businesses self report as federal contractors), and Dun & Bradstreet (provides name and address for all facilities and subsidiaries of a business). 

·         Worker Misclassification: The agency will continue to focus on classification of employees as independent contractors. According to the OFCCP, many contractors misclassify employees in part so they do not have to include them in the AAPs. The OFCCP is working with other DOL agencies on this misclassification issue.

 

Berkshire will continue to monitor these changes and keep clients informed of any further developments. For further information, please contact Berkshire Associates at 800.882.8904 or email bai@berkshireassociates.com.