OFCCP Provides Additional Information and Resources Regarding Audits Focused on Individuals with Disabilities

The new Director of the Office of Federal Contract Compliance Programs (OFCCP) seeks to increase the number of audits conducted by OFCCP, but shorten the duration of them. Therefore, in fiscal year 2019, OFCCP will begin conduct “focused” reviews. The focused reviews will focus on a contractor’s compliance with one of the bodies of law that OFCCP enforces:

  • Executive Order 11246 (focusing on race and gender);
  • VEVRAA (focusing on protected veterans); or
  • Section 503 of the Rehabilitation Act (focusing on individuals with disabilities).

These focused reviews will likely include both a desk audit portion and an onsite audit (including interviews with managers), limited to the specific area of the law that the focused review is scrutinizing. Contractors will be selected for focused reviews using the same neutral selection process used for standard compliance reviews. OFCCP is not discontinuing its standard compliance reviews, but is adding focused reviews as additional forms of review conducted by OFCCP.

OFCCP’s new Director appears focused on enforcing the law pertaining to individuals with disabilities. OFCCP has expanded its resources on its website for contractors as to individuals with disabilities and has provided additional information pertaining to focused reviews focused on individuals with disabilities.

  • OFCCP has posted FAQs. The FAQs note that OFCCP will require contractors undergoing a focused review as to individuals with disabilities to provide both their Section 503 affirmative action plan and their Executive Order 11246 affirmative action plan – even though the latter will not be reviewed to assess compliance with Executive Order 11246. The FAQs also note that the focused reviews will initially be conducted at the contractor’s corporate headquarters, but OFCCP will evaluate whether to expand to other establishments in the future.
  • OFCCP has likewise posted the current 12-part Scheduling Letter for a focused review as to individuals with disabilities. Notably, compensation data is not requested.
  • OFCCP has also posted its recommended practices for creating an inclusive workplace for individuals with disabilities and has provided links to some resources that may be useful in locating disabled candidates and better addressing workplace issues relevant to individuals with disabilities. It is wise for contractors to consider adopting some of these practices, which OFCCP has indicated it recommends.
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OFCCP Will Exclusively Provide CSALs Through Electronic Posting

The Office of Federal Contract Compliance Programs (OFCCP) has announced that it will discontinue the process of mailing Corporate Scheduling Announcement Letters (CSALs)—meaning the notice that a specific establishment of a federal contractor or subcontractor is expected to be audited by OFCCP in the near future. OFCCP will now instead solely post online the names and locations of federal contractors and subcontractors that would otherwise have received CSALs.

Contractors should also note that:

  • OFCCP has indicated that it expects to post the next batch of CSALs on the OFCCP FOIA Library page in mid- to late-March. Contractors are encouraged to check for inclusion on this list and, particularly if listed, immediately take action to be well-positioned when it receives the Scheduling Letter.
  • OFCCP has significantly tightened the lag between CSALs and Scheduling Letters. When OFCCP released CSALs in September 2018, it only provided for a 45-day period before it indicated it would send out Scheduling Letters. Once a contractor receives the Scheduling Letter, it has only 30 days to respond to OFCCP with a significant volume of information, including its affirmative action plans.

Cooley attorneys are happy to assist contractors in better understanding their OFCCP obligations or in undergoing an audit.

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OFCCP Tweaks Scheduling Letter and Itemized Listing, but Diminishes Confidentiality Protection

The Office of Federal Contract Compliance Programs (“OFCCP”) announced that, as of July 1, 2016, it is using a new Scheduling Letter and Itemized Listing when it commences compliance reviews of federal contractors.  Although the new Scheduling Letter and Itemized Listing changes language in a number of places, most of the changes are minor and provide clarification, rather than a new substantive requirement.

A notable change, however, is that OFCCP removed language that previously promised contractors that their submissions would be treated as confidential, unless disclosure was appropriate under the Freedom of Information Act.  The previous language stated, “Rest assured that OFCCP considers the information you provide in response to this Scheduling Letter as sensitive and confidential.”

In contrast, the new language states:

Please also be aware that OFCCP may use the information you provide during a compliance evaluation in an enforcement action.  We may also share that information with other enforcement agencies within DOL, as well as with other federal civil rights enforcement agencies with which we have information sharing agreement.

Finally, the public may seek disclosure of the information you provide during a compliance evaluation.  Under current law and regulations, OFCCP is required to comply with Freedom of Information Act, the Trade Secrets Act, the Privacy Act, and the 1987 Executive Order governing the disclosure of confidential commercial information.

The other changes include:

  • Adding that OFCCP “will” notify VETS if a contractor has failed to comply with the requirement to submit its annual report on veteran hiring/workforce representation (the VETS-4212 form);
  • Splitting the affirmative action plan submissions covering veterans and individuals with disabilities into separate requests;
  • Clarifying that contractors may submit either an organizational profile or a workforce analysis (as many contractors have already been doing);
  • Stating with greater specificity that, if a contractor has failed to accomplish a particular placement goal, then it must describe the good faith efforts “to remove identified barriers, expand equal employment opportunity, and produce measurable results;” and
  • Specifically giving contractors the option to either submit data using the race and ethnic categories found on the EEO-1 survey (Hispanic or Latino, White, Native Hawaiian or Other Pacific Islander, Asian, American Indian or Alaska Native, or Two or More Races) or to use the following racial and ethnic groups: African-American/Black, Asian/Pacific Islander, Hispanic, American Indian/Alaskan Native, and White.

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Filed under Affirmative Action Plan (AAP), Department of Labor

OFCCP Publishes Final Rule Prohibiting Numerous Forms of Sex Bias

The Office of Federal Contract Compliance Programs (“OFCCP”) has issued revisions to the long-standing sex discrimination rules for federal contractors and published the Final Rule in the Federal Register on June 15.  The Final Rule goes into effect on August 15, 2016.

The Final Rule addresses compensation discrimination, pregnancy accommodations, discrimination based on gender identity, and sex stereotypes.

Compensation Discrimination: The Final Rule prohibits discriminatory wages, but specifies that OFCCP will use a case-by-case approach in evaluating the pay practices during an audit.  OFCCP opted not to adopt a prior iteration that would have required contractors to pay equal wages to similarly-situated employees, but instead is requiring fair pay for comparable work.  Therefore, compensation differences stemming from neutral factors, such as tenure, are likely permitted.

Pregnancy Accommodations: The Final Rule is consistent with the 1978 Pregnancy Discrimination Act, which prohibits sex bias on the basis of pregnancy, childbirth, or related medical conditions.  The Final Rule requires contractors to provide accommodations to pregnant employees that are comparable to accommodations that would be provided to disabled employees.  Some examples of potential pregnancy accommodations are more frequent bathroom/hydration breaks and light-duty assignments.

Transgender Bias: The Final Rule reiterates the 2014 rule that discrimination based on gender identity is prohibited.  The Final Rule clarifies that contractors must allow employees to use bathrooms and other segregated specific facilities that are consistent with their gender identity.  The rule does not address how contractors in states requiring bathroom usage to correlate with biological sex, such as North Carolina, are to handle the competing directives.  The Final Rule also requires contractors to provide equal fringe benefits regardless of gender identity.  OFCCP is explicit that excluding medical coverage for an employee’s gender transition will be deemed facially discriminatory.  Recognizing that changes to benefit plans may take time, OFCCP said that it will consider contractors’ good faith progress on this front in determining whether an enforcement action is appropriate.

Sex Stereotypes: The Final Rule prohibits sex stereotyping.  Sex stereotyping includes judging an employee based on his/her conformance to sex-based appearance norms.  Sex stereotyping also encompasses making employment decisions based on stereotypes of “proper roles” of males/females with regard to caregiving.  OFCCP cites studies showing that mothers are less likely to be hired and are typically paid less than non-mothers, so prohibits decisions on account of one’s caregiver role.  The Final Rule also prohibits limiting roles to a specific sex; however, includes a narrow carve-out where sex is a bona fide occupational qualification because it is “reasonably necessary to the normal operation” of a “particular business or enterprise.”

Contractors should review their policies to ensure compliance with the Final Rule prior to the August 15 effective date.

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Filed under Affirmative Action Plan (AAP), Discrimination, OFCCP, Office of Federal Contract Compliance Programs

OFCCP Issues Final Rule Promoting Pay Transparency

On September 10, 2015, the Office of Federal Contract Compliance Programs (“OFCCP”) issued the Final Rule (RIN 1250-AA06) on pay transparency, which goes into effect on January 11, 2016.  The Final Rule implements Executive Order 13665, signed by President Obama signed on April 8, 2014, and stems from the Lilly Ledbetter Fair Pay Act.  OFCCP’s press release explains the rationale for the Final Rule is that pay secrecy policies foster the gender pay gap; if individuals do not realize that they are underpaid, then they cannot address the disparity.  OFCCP states that the pay gap for females remains at 23 cents for every dollar earned by males.  OFCCP also cites a pay gap for minorities.

The Final Rule prohibits federal contractors and subcontractors with government contracts in excess of $10,000 from terminating or otherwise discriminating against employees for discussing, disclosing, or inquiring about their own pay or co-workers’ pay. The Final Rule also protects pay discussions by job applicants.  Employees and job applicants who believe that they have been discriminated against for discussing, disclosing, or inquiring about pay may file discrimination complaints with OFCCP.

The Final Rule contains an exception for where the employee makes the disclosure of pay information based on information obtained in the course of performing his or her essential job functions.  For example, an employee in the human resources department may not disclose employee salaries under the guise of the Final Rule.  Likewise, the Final Rule contains an exception for action taken against an employee pursuant to a workplace rule that does not prohibit compensation discussions.  For example, if an employee violates a policy regarding timeliness, the employer may enforce the policy even if the employee was late in beginning his or her shift because he or she was discussing pay with other employees.

Contractors and subcontractors must incorporate this new non-discrimination requirement into the EEO clause in covered contracts and subcontracts, handbooks, and application materials.

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Filed under Affirmative Action Plan (AAP), Compensation, Department of Labor, OFCCP, Office of Federal Contract Compliance Programs

Executive Order Requiring Paid Sick Leave Is On The Horizon

President Obama is said to have drafted an Executive Order, obtained by the New York Times, which would require federal contractors and subcontractors to provide their employees with a minimum of 56 hours (about 7 days) of paid sick leave annually to use for their own illness or to care for sick relatives.  The draft order would also allow the leave to be used for medical attention, counseling, and legal action relating to domestic violence and sexual assault.  The draft order specifies that the right to take paid leave cannot be contingent upon the employee finding a replacement during the leave.  Unpaid sick leave would carry over from year to year.  Compliance with the Executive Order would be a pre-requisite to obtaining a contract with the Government.

President Obama’s action comes after the Department of Labor (the “DOL”) released a statistic showing that 39% of the private sector work force currently has no paid sick leave.  The DOL is said to be reviewing the draft order, but has stated that no final decision has been made yet.  If the order is issued, the DOL secretary will issue detailed regulations by September 30, 2016.

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OFCCP Revises the VEVRAA Hiring Benchmark

The Office of Federal Contract Compliance Programs (the “OFCCP”) recently reduced the VEVRAA hiring benchmark for protected veterans from 7.2% to 7.0%. The hiring benchmark is intended to reflect the percentage of veterans in the civilian workforce across the country. The OFCCP reduced the hiring benchmark in response to the 2014 year-end data of the Bureau of Labor Statistics.

Federal contractors and subcontractors opting to use the hiring benchmark for their 2015 affirmative action plans should now use this revised benchmark, regardless of where in the country their establishments are located. Federal contractors and subcontractors may still opt to instead use the OFCCP’s five factor method to develop an individualized hiring benchmark.

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Filed under Affirmative Action Plan (AAP), OFCCP, Office of Federal Contract Compliance Programs, Veterans