A recently issued directive from the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) outlines the agency’s new compliance evaluation protocol. In addition to OFCCP’s general protocol for compliance reviews, federal contractors and subcontractors should be aware that the new directive provides that every 25th employer on the agency’s scheduling list will be selected for a full compliance review, which includes an onsite investigation by OFCCP compliance officers.
All supply and service compliance evaluations scheduled from OFCCP’s Federal Contractor Scheduling System (FCSS) are subject to the following requirements:
- Increased Inter-Agency Coordination: When OFCCP mails a scheduling letter, the agency will contact the EEOC and the applicable state or local agency to determine the status and outcome of any complaints that have been filed against the contractor at the establishment under review.
- Full Desk Audits for Every Compliance Review: Compliance officers will conduct a desk audit in every compliance review and evaluate the contractor’s compliance with its obligations under Executive Order 11246, Section 503, and VEVRAA. The desk audit will, among other things, scrutinize employers’ impact ratio and compensation analyses, and generally assess the reasonableness and acceptability of each AAP.
- Looking for Patterns of Non-Compliance: The compliance officer will review the contractor’s compliance history for the past three years to assess the contractor’s recent compliance history, and determine if there are patterns of non-compliance.
- Discrimination Indicators Vary: In addition to statistical and anecdotal evidence of discrimination, indicators of potential discrimination/violations will include, but are not limited to, patterns of individual or systemic discrimination, recordkeeping deficiencies, failure to maintain an AAP, and non-compliance with other labor and employment laws (e.g., wage and hour laws).
- Onsite Review Permitted: If a contractor’s AAP or supporting documentation is insufficient to make a compliance determination, the compliance officer may proceed to an onsite review.
- Onsite Visits Will Increase: Notwithstanding, as a quality control measure, every 25th federal contractor establishment will be selected by FCSS for a “full compliance review.” A full compliance review means that a contractor will be subject to a desk audit, an onsite visit by OFCCP compliance officers, and where necessary, an offsite analysis.
- Scope of Onsite Review: An onsite review is not limited to the nature or scope of the indicators that triggered the onsite review.
- Onsite Visits Will Check Whether Employees Have Been Informed of NLRA Rights: Whenever an onsite review is conducted, the compliance officer will document the contractor’s compliance with Executive Order 13496, which requires notification to employees of their rights under the National Labor Relations Act. For more information on complying with Executive Order 13496, please see our previous alert on the matter.
This new agency directive underscores the importance of conducting internal audits before the agency contacts a company for a desk audit. For example, internal audits should examine whether an AAP is current and accurate, and whether a company complying with Executive Order 13496. If a contractor denies OFCCP access or refuses to provide requested information, a compliance officer will implement “show cause” notice procedures.
Contractor establishments that have undergone a compliance evaluation will be excepted from scheduling from the FCSS for another compliance evaluation of any kind for 24 months from the date of closure of the compliance evaluation.
For more information on compliance with this new OFCCP directive, or additional government contracting matters, please contact a member of Buchanan Ingersoll & Rooney’s government contracts team.