Hunton Employment & Labor Perspectives

The Office of Federal Contract Compliance Programs (OFCCP) budget request for next year reflects its intent to increase aggressive enforcement.  The OFCCP, part of the U.S. Department of Labor, is the agency charged with enforcing the affirmative action obligations of federal contractors and subcontractors.   Approximately 25% of the American workforce is employed by federal contractors and subcontractors, whose federal contracts total more than $700 billion annually.  The OFCCP’s proposed budget for FY 2013 is now available online.

The OFCCP has requested a 1% increase from its FY 2012 budget, for a total of $106,415,000.  The increase is primarily directed to pay and benefits adjustments for its 755 personnel, and rent.  The OFCCP’s funding request focuses on three specific priorities: (1) ensuring quality evaluations by compliance officers; (2) increasing the technical proficiency of OFCCP staff; and (3) expanding the knowledge base of workers and federal contractors.  “OFCCP will continue to conduct more full-desk audits, additional onsite investigations, focus reviews and stakeholder education.”  The OFCCP intends to increase the amount of its “thorough” compliance evaluations by 12% in FY 2013, to 4,530.

In justifying its budget request, the OFCCP said it is “making significant investments in its regulatory activity, primarily in the promulgation of new rules.”  Proposed new rules include: new regulations for the construction industry, regulations to protect workers with disabilities, and regulations revising Section 4212 on veterans’ employment.  Once these final rules are published, the OFCCP will launch an extensive educational campaign directed towards its staff, contractors, and community organizations.  The OFCCP also plans a “look back” review, to assess the rules’ impact after they have been in effect.

The OFCCP articulates several cost-saving measures.  Among them is the accelerated deployment of the Federal Contract Compliance System (FCCS), a modern cloud-computing case management solution.  This new IT system is intended to move the OFCCP from a manual process to an automated one and away from hard copy files.  The FCCS uses imbedded business rules to prevent regional deviations from standard operating procedures.  It also integrates various functions, like word processing, spreadsheets, email and statistical software, to increase efficiency.

Also among the OFCCP’s cost-reduction measures are Quality Assurance Audits and Strategic Case Selection.  QA audits are intended to ensure high quality investigations by monitoring field offices.  They will include random quality audits, self-audits and accountability reviews.  The OFCCP is also updating its compliance evaluation manual with revised enforcement procedures.

Strategic Case Selection refers to the OFCCP’s continued focus on particular areas of affirmative action compliance:  compensation (especially “gender gaps”), hiring, VEVRAA, and Section 503.  The agency intends to prioritize cases based on the strength of evidence of a potential violation.  The OFCCP will also continue its emphasis on systemic noncompliance and patterns of violation within a corporation.  Enterprise-wide investigations will be used in those cases in lieu of single facility audits.

It remains to be seen whether the OFCCP’s budget will pass as proposed.  Either way, the OFCCP will certainly continue to be aggressive in its enforcement efforts under Director Patricia Shiu, and employers must be proactive in their compliance efforts, rather than waiting to review their practices only after the OFCCP initiates an audit.