Hunton Employment & Labor Perspectives

The OFCCP vowed things would change after President Trump’s election.  It is making good on that promise.  The Agency issued three new Directives in the last two weeks, following four others earlier this year.  One of these Directives was long-awaited new guidance on pay analyses, replacing Directive 307.  And, the OFCCP has a new Acting Director, Craig Leen (see our earlier post for the exciting news about the immediate-past Director, Ondray Harris, joining our firm).

The good news for contractors is that the OFCCP’s actions are almost all pro-business, aimed at making the Agency more transparent, objective, and efficient.

• Directive 2018-09 (Sept. 19, 2018): OFCCP Ombud Service

Establishes an Ombud Service in the national office, largely in response to a 2016 GAO Report.   To facilitate “fair and equitable” resolution of external stakeholders (contractors, subcontractors, law firms, industry and workers’ rights groups, complainants, applicants and employees).

• Directive 2018-08 ( 19, 2018): Transparency in OFCCP Compliance Activities

Lets contractors know what to expect in audits and investigations.  Also designed to improve consistency within the Agency and encourage collaborative resolutions.  Provides specific policies and procedures to OFCCP staff for every stage of compliance.  Most notably, (1) at the desk audit stage, compliance officers are instructed to “close reviews quickly” where there are no indications of discrimination or other violations, ideally within 45 days; and (2) during conciliation, the OFCCP must provide the contractor with its source data, factors used to calculate back pay, and a summary of any anecdotal evidence and non-statistical findings.

• Directive 2018-07 (Aug. 24, 2018): AAP Verification Initiative

Driven by OFCCP’s concerns that not all contractors do annual AAPs.  It directs the OFCCP to develop a program through which contractors would be required to certify their AAP compliance.  The certification information would help identify companies for audit.

• Directive 2018-06 (Aug. 24 2018): Contractor Recognition Program

Permits the Agency to recognize positive actions of contractor “thought leaders.” It would highlight innovative or effective model practices.  It also includes a contractor peer mentoring component.

• Directive 2018-05 (Aug. 24, 2018): Analysis of Contractor Compensation Practices

Provides new guidelines for pay analyses and rescinds Directive 307.  Intended to improve the effectiveness and consistency of audits, increase Agency transparency, and encourage self-auditing by employers.  It somewhat restores a focus on anecdotal evidence: the OFCCP will be “less likely” to pursue a violation without non-statistical corroboration, unless the statistics are “exceptionally strong.”

• Directive 2018-04 (Aug. 10, 2018): Focused Reviews of EO 11246, §503, and VEVRAA

A portion of future audits will be dedicated to investigation of a single issue (e.g., just EO 11246, or §503, or VEVRAA).  The OFCCP will develop a protocol for this, to be released in an FAQ.

• Directive 2018-03 (Aug. 10, 2018): 204(c) Religious Exemption

Reminds compliance officers of the legal principles underlying religious freedom and describes how to apply them in the audit process.

• Directive 2018-02 (May 18, 2018): TRICARE Subcontractor Enforcement Activities

Extends a five-year moratorium on TRICARE enforcement activities, begun in 2014.  The OFCCP will evaluate further, collect feedback, and monitor legal developments before deciding if/how TRICARE subcontractors are subject to AA obligations.

• Directive 2018-01 (Feb. 27, 2018): Use of Predetermination Notices (PDN)

Intended to make the OFCCP’s use of PDN’s more consistent throughout the Agency. It removes Regional discretion over whether to issue a PDN.  Now, a PDN must be issued before a Notice of Violation (NOV), and give contractors 15 days to respond.  OFCCP must obtain approval from the Office of the Solicitor before issuing a PDN.

The OFCCP’s procedures will continue to evolve as compliance efforts adjust to the new Directives.  Contractors may face different audits — with modified focus areas and priorities — than in the recent past.