The Office of Federal Contract Compliance Programs (“OFCCP”) recently sent Corporate Scheduling Announcement Letters (“CSALs”) to 2,500 federal contractor establishments warning of possible audits. OFCCP sends CSALs to contractors’ specific establishments as a courtesy to let contractors know that certain locations have been identified for potential audit. CSALs do not mean that the contractor has been selected for an audit, but rather put contractors on notice that their establishments may be audited. The audit does not actually begin until the contractor receives the Scheduling Letter from OFCCP.
Most OFCCP audits for supply and service contractor establishments are based on the Federal Contractor Selection System (“FCSS”). The FCSS generally releases names of contractors for audits two times per fiscal year. This latest round of CSALs marks the first release of the FY 2015. According to OFCCP’s FAQ, 993 distinct companies and 25 industries are represented among the 2,500 establishments on the FY 2015 scheduling list. This list includes 27 Corporate Management Compliance Evaluations where OFCCP investigates glass ceiling issues. Contractors can confirm whether one or more of their establishments were mailed CSALs by faxing a written request on company letterhead to OFCCP’s Division of Program Operations at (202) 693-1305.
Because contractors receiving CSALs are scheduled for audits in most cases, contractors receiving these notices should start to review their compliance and prepare for a potential audit as soon as possible. This is particularly important in light of OFCCP’s new Scheduling Letter, which drastically expanded the data required to be submitted to OFCCP at the outset of an audit. You can learn more about the new Scheduling Letter here.
The government shutdown announced yesterday is already making an impact on how companies comply with their obligations as federal contractors. Congress’ failure to agree on a new budget for the 2014 Fiscal Year has resulted in a furlough of over 800,000 federal workers, temporary closing of numerous federal agencies, and suspension of many services federal contractors rely upon to fulfill their compliance obligations.
Those effects are already being felt by contractors who use E-Verify. E-Verify is the internet-based system that federal contractors must use to verify the employment eligibility of their new hires and employees. The Department of Homeland Security (“DHS”), who oversee the E-Verify program, announced yesterday that E-Verify will be unavailable during the government shutdown. This means that contractors will not be able to enroll in E-Verify, verify employment eligibility of any new hires or existing employees, or take any administrative actions relating to their E-Verify accounts.
In addition, employees who receive Tentative Non-confirmations (“TNCs”), indicating that their employment eligibility could not be verified through the E-Verify system, will not be able to resolve those TNCs during the government shutdown. The time for employees to resolve TNCs, however, will be extended by the days that the government is closed. DHS has also warned that contractors cannot take any adverse action against an employee because of an E-Verify interim case status during the government shutdown.
Contractors will still need to timely and accurately complete I-9 forms for all new hires within three business days of hiring any employee. Contractors must use the new I-9 form that was issued earlier this year.
OFCCP Closed for Business
Contractors who have open audits with OFCCP may also experience difficulties due to the government shutdown. OFCCP has announced that it will be completely closed during the shutdown because it has been declared as part of the “non-essential” government staff. Contractors who have recently received a scheduling letter or who have an open OFCCP audit with a pending request will need to carefully consider whether they should respond to OFCCP’s during the shutdown.
We recommend that contractors conduct “business as usual” and timely submit all submissions in order to ensure full compliance. Contractors should acknowledge the government shutdown in their submissions and request OFCCP contact them after it resumes normal operations. There may be situations, however, where contractors are concerned about submitting materials by mail to OFCCP that contain confidential and sensitive information since there is no staff at OFCCP to receive the submission. In that situation, contractors should consider e-mailing the compliance officer to inform him or her that the contractor will send the submission once the government shutdown is over.
Filed under E-Verify, OFCCP
Contractors usually have thirty days from the day they receive a scheduling letter and itemized listing from OFCCP to submit their affirmative action plan and other requested documents and data. In the past, many regions have afforded contractors short extensions on that deadline.
However, certain OFCCP Regions have prohibited compliance officers from granting extensions. For example, the Southeast and Mid-Atlantic Regions have been directed not to grant extensions beyond the 30-day deadline for responding to scheduling letters. In the Mid-Atlantic Region, all requests for extensions must be approved by the District Director for the District to which the compliance officer is assigned. On the other hand, other regions have continued their practice of granting extensions.
Given these new policies, contractors should undertake periodic “pre-audits” to confirm that all of the information and data they need to respond to a scheduling letter is prepared and can be submitted within the 30-day deadline.
On May 8, 2012, the Administrative Review Board for the Department of Labor (“ARB”) reversed a very favorable ruling for contractors, holding that the Office of Federal Contract Compliance Programs (“OFCCP”) could request data from contractors during desk audits concerning hiring, terminations and promotions after the period covered by OFCCP’s initial Scheduling Letter.
On November 14, 2011, Judge Royce C. Lamberth, the Chief Judge for the Federal District Court for the District of Columbia, held in United Space Alliance, LLC v. Solis, et al. that the Office of Federal Contract Compliance Programs (“OFCCP”) had the right to request compensation data from United Space Alliance, LLC (“USA”) for periods beyond its initial scheduling letter.
On September 29, 2011, the Office of Federal Contract Compliance Programs (“OFCCP”) published a Notice that it was submitting a revised scheduling letter and itemized listing to the Office of Management and Budget (“OMB”) for approval. In May of this year, OFCCP sought OMB’s approval and public comment on a proposed new scheduling letter and itemized listing. Continue reading
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. Continue reading