Last week, President Trump rescinded Executive Order (EO) 13495, the Nondisplacement of Qualified Workers Under Service Contracts. President Obama issued this order in January 2009, along with two other EOs that directly impact Federal contractors. Under the old EO, companies assuming performance of an existing contract were required to offer employees of the existing contractor first right of refusal when staffing for the new contract. The EO also required all Federal contractors to display a poster informing employees of their rights. This recession also terminated any investigations or compliance actions based on Executive Order 13495.

The OFCCP recovered a record amount in monetary damages in fiscal 2019, which came to a close at the end of September. The agency announced just over $45M in financial remedies, almost equally split between hiring and compensation discrimination claims. The agency indicates this is a $16M increase over its fiscal 2018 enforcement recovery. The number of audits completed is up over last year as well – while complete 2019 data is not yet available, the agency closed just over 800 reviews in 2018 and almost 1100 from October 2018 through the beginning of September 2019.

Implementing two items under the pillar of Transparency, the OFCCP has announced the placement of an Ombudsman and released a Compliance Portal.

OFCCP has announced a new Ombudsman, Marcus Stergio. Director Leen issued a Directive establishing this position in September 2018, and the Ombudsman will serve as a liaison between contractors and the agency. His office will ensure that OFCCP is acting according to the agency’s legal authorities, policies, and procedures while also improving effectiveness of internal OFCCP operations. Marcus holds a Masters degree in conflict resolution and has worked as an administrator of the dispute resolution process for multi-national organizations.

OFCCP recently released a new webpage aimed at providing compliance assistance documents to contractors. This page was developed as a result of the OFCCP town hall meetings and includes an OFCCP overview brochure, which introduces the agency and its enforcement approach to contractors. There is a “what to expect” document, which outlines items the agency expects from contractors as well as the rights contractors have when interfacing with the agency in a compliance review or investigation.

In a 5-4 decision, the U.S. Supreme Court has ruled against including a citizenship question on the 2020 Census form. The Court has sent the question back to the administration to review the decision to add this question to the next Census.  

This week, OFCCP created a webpage to provide contractors more information about the “new” compliance check reviews that will be completed as part of the current round of audits. OFCCP has had the capability to conduct compliance checks for many years but has not opted to schedule them in the recent past. With this round of reviews, OFCCP re-introduced the Compliance Check, to be used in 500 of the 3,000 audits to be scheduled in the coming months. The agency has indicated they intend to schedule up to 1,000 Checks per audit list in the coming years, as a means of ensuring compliance across more contractor establishments.

The U.S. Supreme Court has agreed to take on two issues that directly impact Federal Contractors this week. The first case is based on the Civil Rights Act of 1964 and debates the question of if that statue extends anti-discrimination provisions based on sexual orientation or transgender status. Federal appeals courts have come to opposing conclusions on this provision, from New York, Georgia, and Illinois.

 

This week, OFCCP published a request to extend the Functional Affirmative Action Program (FAAP) process with no changes to the existing requirements. The FAAP is an alternative to typical establishment-based AAPs; contractors provide detailed information to the agency and can receive approval to create functional, rather than geographic, plans. The current Office of Management and Budget (OMB) approval for the FAAP documents expires on April 30, and OFCCP has applied to extend the authorization for another three years. 

Making good on the promise at the recent town hall meetings, OFCCP recently published proposed updates to the scheduling letters, opening a 60-day comment period on these updates. It’s important to note that these changes are proposed and comments from the public are due by June 11. Given the nature of these changes, employers, law firms, consultants, employer associations, and civil rights organizations will likely be weighing in on this change. OFCCP’s current scheduling letters expire (that is, they are due for renewal of the OMB approval) on June 30. We believe it is unlikely that changes to the letters will be implemented by then and anticipate a temporary extension for the existing letters. So, for the foreseeable future, audits initiated in the next six to nine months (including those locations on the recently published CSAL) will probably be conducted under the existing letters.

Continuing with the agency’s commitment to transparency, OFCCP announced two more Town Hall meetings to gather input from the contractor community. These meetings will be held in New York City and are designed to provide a forum for contractors in the financial and legal industries to provide input to the agency on what is important for the agency to consider as they continue to refine their enforcement focus for 2019.