Compliance reviews of federal contractors and subcontractors by the Office of Federal Contract Compliance Programs will focus more intensely on the employers’ lack of Affirmative Action Plan (AAP) documentation.
Last February, the office announced its intention to conduct affirmative action Compliance Audits of 1,000 federal contractor employers this year (AA, 2-28-15, P. 4).
One problem is that because contractors are not required to file AAPs with the government, OFCCP has had to rely on contractors' voluntary and largely unsupervised compliance, note attorneys Mark Neuberger and Angelica Boutwell of the law firm of Foley & Lardner.
It is estimated that up to 85% of government contractors don’t maintain current AAPs but engage in "back-end compliance," waiting to prepare their AAPs after receiving an audit notice.
It is OFCCP's intention to require all contractors to file an as-yet-designed annual certification form. Submitting a false certification would be a crime.
Focused Review Warning
OFCCP also plans to implement more Focused Reviews of contractors’ compliance with equal opportunity laws, including recently strengthened measures protecting employees from discrimination based on their religion or military veteran status.
Different from Compliance Audits, Focused Reviews have been available to the OFCCP since the 1997, but were rarely – if ever – used. In a Focused Review, a compliance officer will examine compliance with regulations pertaining to just one law.
This review likely will include examining documentation showing compliance and interviewing managers and employees responsible for equal employment opportunity compliance, such as the affirmative action officer, Americans With Disabilities Act coordinator and perhaps the Family and Medical Leave Act administrator to check leave issues.
Employees will be interviewed, including some protected by the relevant law, to check for policy awareness, training and compliance. In such a situation, OFCCP also could be expected to evaluate hiring data and the contractor’s handling of accommodation requests.
Equal Compensation Examined
In another directive, OFCCP also warned contractors to expect it will pay particular attention to equal compensation issues. It points out that compensation disparities can be created through inequities in monetary compensation, inequitable training or advancement opportunities, and assignment/placement differences.
If a contractor cannot rebut OFCCP’s statistical and anecdotal findings of pay discrimination, the agency has several remedies available to it, explains attorney Leigh M. Nason of Ogletree Deakins.
These include seeking back pay and benefits, interest, salary adjustments and other monetary relief. Others can include modifying policies and procedures or providing training opportunities, work assignments, promotions and job placements.
Should conciliation fail, and in cases where OFCCP finds strong evidence of discrimination, the agency may seek sanctions including cancellation of current federal contracts and debarment from future ones.
The government’s FY 2019 starts on October 1, 2018, which means companies selected for audit in the next round of scheduling may find themselves facing a Focused Review.
“In the meantime, we recommend that contractors familiarize themselves with OFCCP’s expectations relating to affirmative action for individuals with disabilities and protected veterans, particularly the requirements relating to outreach and the documentation of affirmative action efforts,” say attorneys Lance Gibbons and David J. Goldstein of the Littler Mendelson law firm.
Because OFCCP audits focus on the employer’s past efforts, improvements must be made now in order to be prepared for a Focused Review in 2019 and beyond, Gibbons and Goldstein stress.
The week before the directive was issued, OFCCP Acting Director Craig Leen at a recent industry conference said he expects the agency will pursue about 200 Focused Reviews each year.
Contractors need to pay attention to the directive implementing the revised Vietnam Era Veterans’ Readjustment Assistance Act. Not only are federal contractors and subcontractors banned from discriminating against veterans in employment, the employers also must take – and show that they have taken -- affirmative action to recruit, hire, promote and retain these veterans.
Contractors must establish annual hiring benchmarks for protected veterans. A protected veteran means any veteran who served on active duty in the U.S. military in conflicts for which a campaign badge has been authorized by the Department of Defense.