On May 12, 2011, the Office of Federal Contract Compliance Programs (“OFCCP”) announced in the Federal Register that it was seeking approval from the Office of Management and Budget (“OMB”) to revise three forms (i.e., the Scheduling Letter, Itemized Listing, and Compliance Check Letter) it uses to collect data from contractors during compliance reviews. Although OFCCP claimed in a Supporting Statement issued with the proposed revisions that the changes to the forms would “reduce overall burden hours on contractors,” it is clear that these proposed alterations, particular those made to the Itemized Listing, would drastically increase contractors’ administrative burdens associated with recordkeeping and preparation of affirmative action plans.
Scheduling Letter/Itemized Listing
OFCCP sends the Scheduling Letter to contractors at the beginning of a compliance review to request submission of the contractor’s affirmative action plan and other data. The Scheduling Letter currently includes an 11-point Itemized Listing that instructs the contractor on the specific data and information that its needs to submit to OFCCP.
Under the proposed revisions, OFCCP makes the following major changes to the Itemized Listing:
- New Item 8: OFCCP would require contractors to submit employment policies relating to the Family and Medical Leave Act, pregnancy leave, and accommodations for religious observances and practices. In addition, if these policies are part of the contractor’s employee handbook, OFCCP requests that the contractor submit the entire employee handbook. OFCCP revealed that it plans to scrutinize these policies when it stated that “[r]eceipt of these policies would assist OFCCP in better determining the existence of sex or religious discrimination indicators within contractor organizations.”
- Changes to current Item 10 (new Item 11): Under the current Itemized Listing, contractors can provide an analysis of their personnel activity (i.e., applicants/hires, promotions, and terminations) for the preceding year by job group or job title, and the analysis only has to show the totals for minorities and females. The new Itemized Listing, however, would require contractors to include more specific demographic information on applicants, hires, promotions, and terminations by mandating that contractors display in their personnel activity analyses the totals for each minority group (i.e., African American/Black, Asian/Pacific Islander, Hispanic, and American Indian/Alaskan Native) rather than a total for all minorities. In addition, the new Item 11 would add to contractors’ administrative burden by requiring them to present the data by both job group and job title.
- Changes to current Item 11 (new Item 12): The most significant proposed change made by OFCCP is to Item 11 in the current Itemized Listing. Under the current Item 11, contractors are required to submit their “annualized compensation data (wages, salaries, commissions, and bonuses) by either salary range, rate, grade, or level showing total number of employees by race and gender and total compensation by race and gender.” This data is aggregated and only includes the contractor’s actual employees and not independent contractors. The new Itemized Listing, however, would drastically change how contractors report this data to the OFCCP by requiring contractors to provide the following:
- Employee compensation data for all employees including, but not limited to, full-time, part-time, contract, per diem or day labor, and temporary;
- Gender and race/ethnicity information and hire date for each employee by job title, EEO-1 Category and job group;
- “Other compensation or adjustments to salary such as bonuses, incentives, commissions, merit increases, locality pay or overtime’’; and
- “Documentation and policies related to compensation practices of the contractor.”
Moreover, contractors would be required to report this information as it existed on February 1 of each year. This means that many contractors could no longer use the compensation data it collects for its snapshot date. Instead, contractors would have to run a separate compensation report that includes the additional information listed above.
- New Item 13: OFCCP would require contractors to provide a copy of their Veterans’ Employment Report (VETS-100 and/or VETS-100A) for the last three years.
OFCCP also proposed to revise the letter it uses to conduct Compliance Checks. The Compliance Check Letter requests similar information as the Scheduling Letter, but it is only used by the OFCCP to determine whether the contractor has complied with its recordkeeping obligations and is not part of a formal compliance review. Although OFCCP is revising the Compliance Check Letter at this time, the OFCCP has rarely used the Compliance Check as a compliance tool over the last several years and it “has not scheduled any Compliance Checks for FY 2011.”
These proposed revisions signal that OFCCP intends to expand significantly the data it obtains from contractors during a compliance review and subject it to a more intensive and searching review. Assuming OMB approves these changes, contractors will undoubtedly face many new compliance burdens.
We encourage interested parties to submit comments by July 11, 2011 by either of the following methods:
- Online by visiting the Federal eRulemaking portal at www.regulations.gov; or
- Mailing comments to Debra A. Carr, Director, Division of Policy, Planning, and Program Development for OFCCP, at 200 Constitution Avenue, N.W., Room C-3325, Washington, DC 20210.
If you would like to discuss these issues further or have questions about this Alert, please contact one of the attorneys listed above.