Hunton Employment & Labor Perspectives

By proposing to amend its Scheduling Letter and Itemized Listing, the Office of Federal Contract Compliance Programs (“OFCCP”) is at it again, imposing greater burdens on federal contractors.  Following its recent proposal to strengthen contractors’ affirmative action efforts for veterans, the OFCCP has now issued a proposal to modify its Scheduling Letter and Itemized Listing used in compliance reviews and compliance checks.  On May 12, 2011, the OFCCP published Notice in the Federal Registry requesting comments on its proposed changes.  The current Scheduling Letter and Itemized Listing are set to expire on September 30, 2011.  Comments on the proposed changes must be submitted by July 11, 2011.

If the proposed changes are accepted as drafted, contractors will face increased compliance obligations when responding to audits.  Although several of the proposed changes merely clarify requests in the current Itemized Listing, many of the changes will require contractors to provide new information and detailed data that was not previously requested in audits.  Several of the more significant proposed changes are explained below.

Leave Policies.  Under the proposed changes contractors must provide employment leave policies including policies that address pregnancy leave, the Family and Medical Leave Act and accommodations for religious observances and practices.  If these policies are contained in employee manuals or handbooks, contractors should provide the handbook or manual.  This proposed change is notable because the current Itemizing Listing does not address these issues,  which are typically handled by the Wage and Hour Division of the Department of Labor or the Equal Employment Opportunity Commission.

Detailed Demographic Information.  The proposed Itemized Listing requires contractors to provide applicant, hire, promotion and termination data by specific race/ ethnicity group, instead of by categories of minority and non-minority.  The OFCCP explains that contractors should list this data based on the following race/ ethnicity categories; African American/Black, Asian/ Pacific Islander, Hispanic, American Indian/Native Alaskan, and White.

Job Title and Job Group.  The OFCCP has proposed that applicant, hire, promotion and termination data be submitted by both job group and job title.  Currently contractors may submit this information by either job group or job title.

Pool Data.  The proposed changes would also require contractors to provide the “actual pool of candidates who applied for or were considered” for promotions and additionally the “actual pool of candidates who were considered for terminations.”  Under the current Itemized Listing contractors need only provide the number of individuals promoted or terminated, the pool data is not required.

Additional Compensation Data.  The amended Itemized Listing makes major changes to its request for compensation data.  The proposed changes would require contractors to provide individual employee compensation data rather than aggregate compensation data, which is requested in the current scheduling letter.  This information would need to be provided by particular racial/ethnicity group rather than by minorities as a whole.  The proposed changes also require contractors to identify separately the following information; base salary, wage rate and hours worked, bonuses, incentives, commissions, merit increases, locality pay and/or overtime.  Finally, contractors would be required to produce any documentation and policies relating to compensation practices, including such policies used to explain the factors and reasons for compensation decisions.

Veterans’ Employment Reports.  The OFCCP’s proposed changes would require contractors to provide their VETS 100 and/or VETS 100A reports for the last three years.

Although in explaining the proposed changes the OFCCP states that the revisions “will reduce the overall burden on contractors,” the opposite seems to be true.  If the proposed changes are accepted contractors will not only have to provide more information and more detailed data in an initial response to an audit, but they will need to track and collect this new information.  This will likely require contractors to make significant adjustments to both their human resources practices and technologies.  Because the current Scheduling Letter and Itemized Listing are set to expire in September 2011, contractors should be aware of these possible changes so they can respond to future audit letters appropriately.