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Important Updates from the OFCCP
WHAT: There has been a series of long-awaited developments at the Office of Federal Contract Compliance Programs (OFCCP) that should have a significant impact on contractor compliance with the OFCCP’s equal opportunity and affirmative action directives. First, Director Ondray T. Harris announced his resignation on July 27, 2018. Following his resignation, Craig Leen, Senior Advisor to the OFCCP, stepped in as Acting Director. Subsequently, the OFCCP released guidance related to the Agency’s efforts to foster a more cooperative and transparent approach when working with the business community.
WHEN: On August 1, 2018, during a keynote address at the OFCCP’s Industry Liaison Conference (ILC), Acting Director Leen detailed an initiative to foster a more cooperative approach when working with the business community. In his remarks, Mr. Leen addressed the familiar four pillars of the OFCCP’s new vision which he and former director Harris have been speaking of publicly for several months. These pillars are transparency, certainty, efficiency, and recognition. As part of this initiative, the OFCCP has now released a document addressing the standards of conduct the OFCCP will use in dealing with covered contractors: “What Federal Contractors Can Expect.”
WHAT IT MEANS FOR THE INDUSTRY: In making the aims of these pillars a reality, the OFCCP has indicated that it intends to make the compliance and audit process less adversarial, with compliance officers being instructed to answer questions as well as provide documents and underlying data. As one example of this initiative already in place, the OFCCP has started issuing pre-determination notices (PDNs) once a compliance audit has been conducted but before a notice of violation (NOV) has been issued. The PDNs are intended to provide a clear process for contractors to more quickly resolve findings, and to do so in a confidential manner that reduces the substantial additional expense of challenging and resolving an NOV. Moreover, it provides the contractor with an opportunity to submit evidence that is targeted to address specific concerns before the OFCCP has made a final determination.
The aims and initiatives outlined in the newly released “What Federal Contractors Can Expect” include the following:
- Access to Accurate Compliance Assistance Material - The OFCCP maintains it is “committed to providing clear, concise, and practical compliance assistance.” It states that it will be providing contractors assistance in various written forms, including FAQs, guidance documents, directives, webinars, and emails.
- Timely Responses to Compliance Assistance Questions - Contractors can expect to receive meaningful responses to questions submitted to the OFCCP help desk within three to four business days, and will be notified if responses require more time.
- Opportunities to Provide Meaningful Feedback and Collaborate with OFCCP - Contractors will be invited to submit feedback on the OFCCP’s compliance assistance programs, as well as on their experiences dealing with the OFCCP during audits. The OFCCP commits to working on identifying ways to collaborate on new compliance assistance materials, contractor training, and other matters supporting contractor compliance.
- Professional Conduct by OFCCP’s Compliance Staff - The OFCCP states that contractors should expect to receive “prompt, courteous, and accurate information” during audits and complaint investigations.
- Neutral Scheduling of Compliance Evaluations - The OFCCP states that contractors may be auditing using a “neutral selection system” that meets “applicable Fourth Amendment standards.” The agency further commits that individual contractors will never be “targeted,” but the OFCCP may continue to focus on specific industries or sectors, geographic regions, or types of employment practices.
- Timely and Efficient Progress of Compliance Evaluations - When undergoing an audit, contractors can expect to receive written notice that they have been scheduled for a compliance evaluation, as well as an initial list of information requests, including reasonable production timelines for all document production requests. Contractors should also expect “clear explanations” of the compliance evaluation processes and periodic progress updates.
- Confidentiality - The OFCCP assured contractors that information submitted during an audit will be kept confidential “to the maximum extent allowed by law.”
- Reasonable Opportunity to Discuss Compliance Evaluation Concerns - The OFCCP outlines a process by which contractors may progressively escalate their discussions with OFCCP officials, in the following chain of progression: compliance officer, local district management, regional office, and national office.
While these aims and initiatives may be laudable, it remains to be seen if and how this new commitment to transparency and cooperation will be adopted by investigators and compliance officers in the field. Contractors may seek to capitalize on these new guidelines, including by invoking these standards in discussions with local investigators and compliance officers. At the least, the invitation to escalate concerns to higher-level officials offers a promising mechanism to resolve issues before they result in a formal adverse finding that is time consuming and costly to challenge.
In guiding clients through recent compliance evaluation and conciliation efforts, it is clear that many OFCCP compliance officers are still refusing to provide the specific underlying methodologies that were relied upon in reaching an adverse determination. This renewed commitment to transparency, cooperation, due process, and an open dialogue to resolve disputes should help mitigate the harms caused by this practice. Contractors should also take the opportunity to clearly and persuasively set out the business justifications for their compensation and hiring determinations early on in the audit process. Similarly, contractors should be prepared to invoke the applicable guidelines and policy statements in the audit process to ensure that they are given the opportunity to correct any unsupported assumptions, findings, or methodologies.