OFCCP Seeks To Require Contractors To Produce Additional ...€¦ · OFCCP needs approval from the...
Transcript of OFCCP Seeks To Require Contractors To Produce Additional ...€¦ · OFCCP needs approval from the...
ManagementAlert
On May 12, 2011, the Office of Federal Contract Compliance Programs (OFCCP) published for public comment a Notice
announcing its intent to modify the scheduling letter and itemized listing of required data that accompanies it, which are used
to initiate every compliance evaluation of supply and service federal contractors and subcontractors. The Notice is available
online here. OFCCP’s current scheduling letter and itemized listing will expire on September 30, 2011. OFCCP needs
approval from the Office of Management & Budget (OMB) to modify its scheduling letter and itemized listing.
While the Notice provides virtually no detail on the proposed changes, a comparison of the proposed scheduling letter and
itemized listing to the current versions uncovers a number of significant proposed changes. In addition to affecting the
complexity of OFCCP audits from the outset, the changes also may affect the way federal contractors and subcontractors
must develop portions of their annual affirmative action programs and maintain their human resources information systems.
The proposed documents are available here.
Leave Policies, Religious Accommodations and Employee Handbooks
New Item 8 of the proposed itemized listing requests “Copies of your employment leave policies including, but not limited
to, policies related to implementing the Family and Medical Leave Act, pregnancy leave, and accommodations for religious
observances and practices.” It further directs contractors to provide copies of employee handbooks or policy manuals if the
requested policies are contained therein.
Note that OFCCP does not have authority to enforce the FMLA. However, its request for FMLA policies may indicate an
intent to coordinate with the Wage and Hour Division (WHD) of the Department of Labor, which does have FMLA enforcement
authority, or the Equal Employment Opportunity Commission (EEOC), which has indicated recent interest in various types of
leave, including leave available to caregivers. It appears that WHD and EEOC may be leveraging OFCCP’s broad authority to
audit employment-related policies to find employers against whom they may file enforcement actions.
Employment Activity Data
OFCCP proposes to add requirements to current Item 10 (proposed Item 11) related to applicants, hires, promotions and
terminations as follows:
• Contractors will be required to submit data by job group and job title; the current itemized listing allows the contractor to
choose one or the other;
• May17,2011
OFCCP Seeks To Require Contractors To Produce Additional Information During All Audits
Management Alert
• Applicant, hire, promotion and termination data must be provided by particular race/ethnicity group (specifically, African-
American/Black, Asian/Pacific Islander, Hispanic, American Indian/Native Alaskan, and White) instead of just minorities
and non-minorities;
• Contractors will be required to provide the gender and particular race/ethnicity composition of the “actual pool of
candidates who applied or were considered for promotion,” which will require contractors to modify their internal
promotions policies and processes, including their internal applicant tracking technology, to allow them to identify
specific pools. It also will require adequate training for managers and human resources professionals involved in the
competitive promotion process to accurately record the pool of employees considered for each competitive promotion
opportunity; and
• Contractors will be required to provide the gender and particular race/ethnicity composition of the “actual pool of
candidates who were considered for terminations,” which will require contractors to identify all employees for whom
termination was considered but not effectuated during the preceding twelve months, as well as identifying whether
terminations were voluntary or involuntary. This proposed change has particular implications for reductions in force
and other group terminations. For the first time in the arena of OFCCP compliance, it will be essential for contractors
to record the pool of employees considered for any reduction in force. Just as a proper applicant tracking system
ties pools of applicants to particular job requisitions, employers should review their internal systems for tracking
terminations to ensure that the discrete pool of employees considered for termination are “tied” to a particular termination
“requisition.” Because many employers’ HRIS systems do not currently have this functionality, contractors and their HRIS
or applicant tracking vendors may need to explore methods for designing, implementing and training on the use of such
a tool.
Additional Compensation Data
Also significant is OFCCP’s proposed change to current Item 11 (proposed Item 12), concerning the initial compensation
data submission. Proposed Item 12 seeks the following (in Excel format, if available): (a) “employee level compensation
data;” (b) data broken down by particular race/ethnicity group rather than for minorities as a whole; (c) gender and particular
race/ethnicity data for each employee by job title, EEO-1 category and job group in a single file; and (d) hire dates for
all employees. Compensation data must include base salary, wage rate and hours worked, and bonuses, incentives,
commissions, merit increases, locality pay and/or overtime should be identified separately for each employee. Contractors
are invited to produce data on factors used to determine employee compensation, such as education, past experience,
duty location, performance ratings, department or function, and salary level/band/range/grade; and they must produce
documentation and policies related to compensation practices, especially those used to explain the factors and reasons for
compensation decisions.
This will require every contractor to provide significantly more compensation information to OFCCP than current practice,
including most of the information OFCCP requests if the current initial data submission shows indicators of potential, alleged
compensation discrimination.
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Support Data for Section 503 and VEVRAA
Finally, OFCCP seeks data related to veterans, including VETS-100A reports for the past three years, and disabled
individuals, including copies of accommodation policies and records of accommodations actually provided by the contractor.
What Contractors Should Do Now
OFCCP takes the implausible position (without explanation) that the revised scheduling letter and itemized listing will reduce
the overall burden on contractors. It is certain, however, that the extensive, additional data sought by OFCCP at the outset of
a desk audit will affect federal contractors and subcontractors in significant ways. Among other things, the proposed revised
itemized listing would require contractors to track information not currently recorded and design and implement new human
resources information technology.
OFCCP’s effort to seek approval for the proposed changes to the scheduling letter signals that it finally is seeking appropriate
permissions from OMB to broaden its request for information during audits. There is some controversy regarding whether
OFCCP’s routine requests for such information during the desk audit phase, without evidence of a compliance issue, are
appropriate.
Because of the impact and importance of these proposed changes, contractors and subcontractors should consider
submitting comments to the Notice, providing OFCCP and OMB with practical information about, among other things, the
increased burdens that would be imposed by the revised itemized listing. Seyfarth Shaw will submit comments, and we
welcome your thoughts and observations if you would like them to be reflected in our comments, with or without attribution.
If you have any questions about this Management Alert, submitting comments to OFCCP, or anything else related to affirmative
action compliance, please contact the Seyfarth attorney with whom you work or any attorney on our OFCCP & Affirmative Action
Compliance Team.