OFCCP Fall 2021 Regulatory Agenda

The Department of Labor recently announced the release of its Fall 2021 Regulatory Agenda, including several priorities of the OFCCP While the proposed rules are not unexpected, some may prove to be quite significant for federal contractors if finalized. Significant proposals include:

• Religious Exemptions – The Biden administration has long made clear its intention to rescind the “Implementing Legal Requirements Regarding the Equal Opportunity Clause’s Religious Exemption” rule enacted under the Trump administration, and to return instead to aligning EO 11246 with the nondiscrimination principles of Title VII of the Civil Rights Act. Contractors who asserted religious exemption under the expanded exemption rule may want to reevaluate under E.O. 11246 and Title VII.
• Modernizing Components of E.O. 11246 – The OFCCP proposes “changes to modernize its Executive Order 11246 compliance program for federal supply and service contractors and subcontractors, including but not limited to recordkeeping and affirmative action program obligations.  In addition, the proposal will consider modifications in light of Executive Order 13988, Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation.” With this expansive description, many potential changes could be proposed. OFCCP Director Yang has mentioned requiring sub-minority placement goals, changing the establishment-based AAP model in light of the move to remote work, and a more proscribed method for reviewing pay practices as part of a contractor’s annual affirmative action requirements. This proposal is one to watch carefully as more details are released.
• Modification of Procedures to Resolve Potential Employment Discrimination – In November of 2020, following significant contractor feedback, the OFCCP published a final rule regarding its procedures for resolving allegations of potential discrimination in its use of the Pre-Determination Notice and Notice of Violation. This rule was largely viewed as a positive move towards greater transparency and consistency on the part of the agency. While the new proposal would modify the final rule, exactly what modifications will be proposed are not yet available and could represent a shift away from transparency for the agency.
• Access to Records - The OFCCP proposes changes to the agency’s Freedom of Information Act regulations to better align with legal authorities and case law. It is unclear at this point what specific changes would be proposed, thought this proposal may be related to EEO-1 reports gathered by the OFCCP during compliance reviews.
• Notification of Supply and Service Subcontract Awards – In 2019, the OFCCP proposed several changes to its scheduling letters, which are sent to federal contractors to initiate a compliance check, review, or evaluation. One provision that was rejected following significant contractor feedback required that contractors list certain subcontractors based on the recency and value of the contract. The OFCCP is clearly still interested in obtaining this information and states that the new proposed rule would require that contractors provide notice to the OFCCP when supply and service subcontracts are awarded, enabling the OFCCP to “schedule supply and service subcontractors for compliance evaluations”. This would represent a significant change to current enforcement, as well as presenting potential record-keeping challenges to prime contractors.

Additionally, a “nonsignificant” rule to make technical corrections to Section 503 of the Rehabilitation Act and VEVRAA was also listed.

While these goals may or may not be accomplished during 2022 or beyond, federal contractors should at very least consider the OFCCP Fall 2021 Regulatory Agenda for what it is: a means for the agency to inform the public of its regulatory priorities. When the OFCCP offers a peak at its driving goals for the upcoming year, federal contractors should take note and plan accordingly. Berkshire will continue to provide updates as additional details and calls for public comments are released.