Receiving an email from OFCCP with a compliance evaluation scheduling letter can create fear and panic. Instead of panic, it’s time to buckle down and focus on what you need to prepare and submit to OFCCP by the 30-day deadline.
The compliance evaluation process typically starts before your letter even arrives. OFCCP frequently calls or emails the company in advance of sending the letter to ensure that they have the right contact person. Upon verification of the correct contact, OFCCP sends the official audit letter, referred to as the Scheduling Letter and Itemized Listing. Receiving the letter officially begins the countdown clock.
The OFCCP purposely updated their Scheduling Letter and Itemized Listing recently to promote the use of technology, clarify existing requirements, and strengthen enforcement. To hear more about the updates, you can review the 20-minute course in the OFCCP Contractor Compliance Institute (CCI) site. You can also listen to Berkshire’s recent webinar Understanding the 2023 OFCCP Scheduling Letter Updates.
The new scheduling letter significantly expands the volume of information contractors are required to submit for audits scheduled on or after August 24, 2023. Here are 8 steps you can take to prepare for your audit after receiving your letter.
- Build a Strong Compliance Team
Identify all internal and external key resources who will be part of the process. This could include your HR Team (e.g., Compensation, Talent Acquisition, and HRIS), the top-level management, IT experts, OFCCP compliance experts, and legal counsel. Your goal is to build a team that will operate like an orchestra through the audit period. The information you provide to the OFCCP should mirror your organization’s commitment and actions towards equal employment opportunity for employees and qualified applicants. AAP compliance is not one person’s job, and your submission must reflect the hard work your organization has put into complying with all affirmative action requirements. Your team must be familiarized with your AAP results, and by now you should have already taken the proper steps to address any problem areas in your AAP.
- Prepare the Best Submission Possible
Upon receipt of the scheduling letter via email, the read receipt confirmation will signal the start of the 30 calendar days to respond with your initial submission. Review your entire AAP with an AAP expert prior to submission to understand the types of questions OFCCP may ask based on the personnel activity, compensation, and other data you will submit.
Allow enough time to double check for accuracy and organize the information listed in all 26 items listed in the letter for each of the establishments under audit. Ensure all the reports are properly identified and in a format that meets the requirements of the OFCCP. Plan to complete the electronic submission on or before the due date. If you’d like to use OFCCP’s secure file sharing system to submit your data electronically and ensure confidentiality and integrity, request an access link to Kiteworks.
If you are a post-secondary institution or federal contractor with a campus-like setting, you are now required to submit the requested information for all AAPs covering the campus located in the same city.
If you cannot meet the deadline for initial submission, you must notify the compliance officer assigned to your case. Be prepared to provide a reason for your request as OFCCP is likely to only grant extensions in the event of extraordinary circumstances.
- Know Your Data
Be familiar with the results of your AAPs. Take a deep dive into the areas of underutilization and any high-risk personnel processes you’ve identified. Surprises are not always fun, and certainly this is not the best time to receive them. Act proactively to find the cause of the problems and take immediate action for remediation if you have not done so at this point.
Make sure you carefully evaluate the personnel activity data you submit to OFCCP to ensure the information accurately reflects your hiring, promotion and termination decisions. Evaluate the data for selection rate differences by race and gender and be prepared to explain your decisions to OFCCP.
When you know what to expect in an audit, you can better prepare for the types of questions you will receive from the agency. Depending on the complexity of these questions, you might want to consult with an OFCCP compliance expert for help in preparing your responses.
- Be Prepared to Demonstrate Your AAP Implementation Efforts
The revised itemized listing in the scheduling letter requires significantly more documentation of your outreach and recruitment activities and the steps you took to correct any identified problem areas. These items include:
- Documentation of all outreach and recruitment activities for individuals with disabilities and qualified protected veterans that took place during the audit period. This should include an assessment of the effectiveness of all your efforts. Be prepared to provide details on alternative efforts if the totality of your efforts were not effective.
- Documentation regarding efforts to meet the 7% utilization goal on individuals with disability if there is underutilization.
- Documentation on the annual hiring benchmark adopted for protected veterans and hiring data to measure against your benchmark.
- Documentation on your good faith efforts to meet any prior year placement goals.
- Documentation of any action-orientated programs you created to address identified problem areas.
Gathering this data and recording action steps throughout your plan year will make it easier to respond to these parts of the new scheduling letter.
- Gather and Analyze Requested Compensation Data
A key difference in the new scheduling letter is the amount of employee-level compensation data you must provide in your initial submission. In addition to the typical request to provide employee level compensation data including base salary, wage, and hours worked, you must now provide other compensation data such as bonuses, incentives, and commissions. You must also provide information on the factors used to determine compensation (e.g., education, experience, performance metrics, grade, etc.) This request could be challenging unless you maintain this information in a single database.
If you think gathering all this information for the employees in your AAP snapshot is challenging enough, you are not done yet…the submission also requires you to provide the same information for those employees as of the date of the prior year’s AAP snapshot.
Plan also to specify details about your annual review of your “compensation system(s) to determine whether there are gender-, race-, or ethnicity-based disparities,” as part of the contractor’s “in-depth analyses of its total employment process” required by 41 CFR 60-2.17(b)(3).”
Beyond gathering this information and ensuring its accuracy, you also want to understand how OFCCP will evaluate the data for pay equity concerns. For further insight into how to best prepare for the Compensation items, check out our recent blog from one of our pay equity experts here.
- Audit Technology-based Selection Tools
Prepare to provide information and documentation on all tools used to recruit, screen, and hire. This includes the use of artificial intelligence (AI), algorithms, and automated systems. Have you evaluated how these tools may have impacted your selection decisions?
If are planning to implement these tools in the future, or are using them now, consider a thorough and reliable bias audit conducted by an expert analyst to rule out any negative impact on any group before and after its implementation.
- Gather Personnel Policies and Procedures
Gather copies of equal employment opportunity policies that were in place during the audit period, including;
• antiharassment policies,
• policies on EO complaint procedures,
• policies on employment agreements that impact employee’s equal opportunity rights and complaint processes,
• policies on reasonable accommodation,
• policies on promotion practices, and
• policies related to your compensation practices.
If you do not have written policies or procedures covering any of the listed items, you do not need to create them, however, any documentation that you do have is requested to help the compliance officer understand your processes and how they impact equal employment at your organization.
- Understand the Cost of Non-Compliance
As an enforcement agency, OFCCP can issue a notice of violation if it identifies any non-compliance with the federal contractor affirmative action regulations. Non-compliance remedies can include additional reporting to OFCCP, assessment of monetary remedies for discrimination violations, or debarment to prevent your organization from holding current or future government contracts.
Your time preparing for your audit is crucial to successfully surviving an OFCCP audit. Use the time you have to ensure your organization’s compliance with all affirmative action requirements.
If you have received your official OFCCP scheduling letter, do not panic – act today. Understanding what to expect and taking the proper steps can help you strategically prepare for your initial submission and the subsequent stages of the audit process. For more information on developing an AAP, contact an OFCCP compliance expert at Berkshire at 800.882.8904 or check out our Audit Support Page.