Introduction
Proposed changes
Comment


Introduction

On 22 November 2022, two days before the Thanksgiving holiday, the Office of Federal Contract Compliance Programs (OFCCP) issued a proposed scheduling letter and itemised listing seeking a number of additional documents and data at the initial stage of a compliance review. The proposed scheduling letter and itemised listing were published for public comment on 21 November 2022. The OFCCP last revised its scheduling letter and itemised listing in April 2020. This most recent proposal, if approved, will exponentially increase the compliance burden on federal contractors and will ensure that every compliance review is a deep dive into contractors' equal employment opportunity (EEO) practices, regardless of whether such a detailed level of review is necessary.

Proposed changes

Scheduling letter
Post-secondary educational institutions and federal contractors with "a campus-like setting" will experience significantly more burdensome compliance reviews. If the proposed scheduling letter is approved, campus-like contractors will be required to submit the information requested in the scheduling letter for all affirmative action plans (AAPs) associated with the selected institution or entity located in the city and state identified in the scheduling letter.(1)

This proposed change is not entirely surprising, but it is questionable. Since the former director, Pat Shiu, initiated a focus on higher education contractors, the OFCCP has struggled with defining the scope of compliance reviews where the contractor has multiple establishments in one location. The appropriate regulatory course of action to address this issue would be to amend the regulations themselves to address campus-like settings. This proposed change to the scheduling letter is an attempt by the OFCCP to circumvent rulemaking in the hopes of getting a quick fix.

Itemised listing
The proposed changes to the itemised listing largely focus on fleshing out contractors' obligations under the regulations to annually conduct an in-depth review of their good faith efforts to make progress towards goals and to ensure their personnel processes are not discriminatory. Most AAP narratives provide a generic statement that the contractor has conducted an in-depth review of all personnel processes and found no areas for concern. If the new scheduling letter is approved, the OFCCP will no longer accept the standard narrative.

Executive Order 11246
The proposed scheduling letter, if approved, will require contractors to provide a list of all action-oriented programmes designed to correct any problem areas identified pursuant to a 2.17(b) assessment, which requires contractors to perform in-depth analyses of their total employment process (recruiting, hiring, promotion, termination and compensation) to determine whether and where impediments to equal employment opportunity exist. 2.17(b) should sound familiar to contractors as this is the regulation on which the OFCCP's recently revised pay directive is based.

Section 503
If the proposed scheduling letter is approved, a cursory statement that the contractor has undertaken an assessment of its outreach and recruiting efforts and has determined that its efforts were effective is no longer sufficient to demonstrate compliance. The proposed scheduling letter requires contractors to submit documentation of outreach and positive recruitment efforts targeting individuals with disabilities and an assessment of the effectiveness of each recruiting effort undertaken. The assessment must include the criteria used to evaluate the effectiveness of each effort, and a determination of whether each effort was effective. Additionally, contractors must indicate whether the totality of their efforts were effective, and if not, provide documentation of the alternative efforts that will be undertaken.

Contractors who are six months or more into their current AAP year when they receive a scheduling letter must provide updated information for at least the first six months of the current AAP year.

Vietnam Era Veterans' Readjustment Assistance Act
Similarly, with respect to protected veterans, contractors' response to the scheduling letter must include:

  • documentation of outreach;
  • positive recruitment efforts to attract qualified protected veterans;
  • an assessment of the effectiveness of these efforts, including the criteria used to evaluate the effectiveness of each effort; and
  • an assessment the effectiveness of the contractor's overall efforts.

Contractors who are six months or more into their current AAP year on the date they receive the scheduling letter must provide updated information for at least the first six months of the current AAP year.

Proposed amendments to request for personnel activity data
The proposed changes to the scope of the personnel activity data collection is where the most drastic movement from desk audit can be seen– which is intended to be the "triage" stage of a compliance review – to a deep dive audit from the outset. If approved, the new scheduling letter will eliminate the initial triage stage in favour of moving directly to an expansive data analysis. The following amendments are made:

  • promotions – under the proposed changes to the itemised listing, promotion data must be broken out by competitive and non-competitive movements. Additionally, for each promotion, contractors must identify the previous and current supervisors, and previous and current compensation. Contractors will also be required to submit policies related to promotions; and
  • terminations – the proposed changes require that termination data be broken out by the reason for termination such as retirement, resignation and conduct. Simply reporting terminations as voluntary or involuntary will no longer be acceptable. Additionally, contractors will be required to report the total number of employees, by gender and race/ethnicity, as of the start of the immediately preceding AAP year for each job title or job group.

Compensation data
Proposed changes to the current item 19, which seeks compensation data, are significant. In addition to the item 19 data currently provided in response to a scheduling letter, contractors will be required to provide the following if the proposed scheduling letter is approved:

  • a second snapshot of compensation data as of the start date of the prior year's workforce analysis;
  • compensation data for temporary employees provided by staffing agencies, and data related to factors that determine staffing agency employees' compensation;
  • documentation and policies, including training documents, related to initial compensation decisions, compensation adjustments, the use of salary history in setting pay, job architecture, salary calibration, salary benchmarking, compensation review and approval;
  • documentation of the contractor's 2.17(b)(3) compensation assessment, including date of the assessment, number of employees the compensation assessment included and excluded, forms of compensation assessed and method of analysis.

Additional documents requested
The following additional documents are requested:

  • integrated Postsecondary Education Data System data collection reports for the last three years from post-secondary educational institutions;
  • written employment policies and practices related to complaint procedures, anti-harassment, recruiting, screening and hiring mechanisms, including the use of "artificial intelligence, algorithms, automated systems, or other technology-based selection procedures" and arbitration agreements that impact employees' EEO rights;
  • the contractor's most recent assessment of personnel processes, which must include a description of the assessment, any impediments to EEO identified through the assessment, and any actions taken, including modifications made or new processes added, as a result of the assessment.

Comment

The OFCCP estimated the average time (or burden) for complying with the recordkeeping requirements associated with the amended scheduling letter is 97.6 hours per establishment and 39 hours for responding to each scheduling letter. The total estimated burden per establishment is approximately $7,400. Given past experience, this estimate does not reflect the reality for most contractors, particularly those with dozens of AAPs and a centralised compliance function.

Contractors have until 20 January 2023 to submit comments to the proposed changes to the scheduling letter and itemised listing.

For further information on this topic please contact Consuela A Pinto or Nancy Holt at FordHarrison by telephone (407-418-2300) or email [email protected] or [email protected]. The FordHarrison website can be accessed at www.fordharrison.com.

Endnotes

(1) The proposed scheduling letter refers to AAPs only. But its proposed changes likely apply to functional affirmative action plans (FAAPs) as well.