The Office of Federal Contract Compliance Programs (“OFCCP”) announced last week that it received approval to change its standard audit Scheduling Letter and accompanying Itemized Listing. Together, these documents specify in detail what records and information federal contractors must supply to OFCCP when they are selected for a compliance review. The changes are significant and will go into effect for compliance reviews beginning on October 15, 2014. OFCCP’s new Scheduling Letter and Itemized Listing are available here. Highlights of some of the more significant changes are summarized below.
“Individualized” Compensation Data
Contractors will now be required to provide compensation data at the individual employee level (including full-time, part-time, temporary and per diems) rather than in aggregate form. In addition, more types of compensation data will be required than before, including: base salary or wage rate, hours worked, bonuses, overtime pay, commissions, incentive pay and merit increases.
Compliance with New VEVRAA and 503 Regulations
Contractors will also be required to provide evidence of compliance with OFCCP’s newly published regulations amending the affirmative action laws regarding protected veterans (“VEVRAA”) and individuals with disabilities (Section 503 of the Rehabilitation Act). Specifically, the following information must be provided:
- Results of the evaluation of the effectiveness of outreach and recruitment efforts intended to identify and recruit qualified individuals with disabilities and protected veterans;
- Documentation of all actions taken to comply with the audit and reporting system requirements;
- Documentation of the computations and comparisons of the new data collection requirements related to the hiring and employment of individuals with disabilities and protected veterans;
- Documentation regarding the hiring benchmark adopted for protected veterans and utilization analysis for individuals with disabilities;
- Copies of reasonable accommodation policies as well as a list of all employee requests for reasonable accommodations and the resolutions thereof; and
- Documentation of the results of required periodic assessments of personnel practices and mental and physical job qualifications.
Personnel Activity Data
Contractors will now be required to submit applicants, hires, promotions and terminations data by racial subgroups rather than simply “minorities” and “non-minorities.” Contractors will also have to provide their definition of “promotion” as applied to their personnel procedures.
Familiarity with These Changes Will Make Audits Go More Smoothly
Although OFCCP has attempted to downplay the significance of these changes, there is no question that the burden has increased substantially on contractors that receive OFCCP audit letters. Familiarity with the changes and advanced preparation are more important than ever given that contractors will still only have 30 days to respond to the audit letter.