On February 13, 2019, the Office of Federal Contract Compliance Programs (OFCCP) released a new policy directive, “to establish a voluntary compliance program for high-performing federal contractors.” According to OFCCP’s press release, “[t]he Voluntary Enterprise-wide Review Program (VERP) provides contractors with an alternative to OFCCP’s establishment-based compliance evaluations with a focus on recognizing contractors that demonstrate comprehensive corporate-wide compliance and model diversity and inclusion programs.”
According to Directive 2019-04, the VERP will “officially recognize the outstanding efforts of its top‐performing contractor participants, and remove VERP participants from the pool of contractors scheduled for compliance evaluations.” The directive provides further details, as set forth below:
OFCCP will develop and implement VERP using the following framework.
- The program will be voluntary for federal contractors.
- The program will recognize two tiers of contractors. The top tier will include top‐performing contractors with corporate‐wide model diversity and inclusion programs. The next tier will consist of OFCCP compliant contractors that will receive individualized compliance assistance to become top performers. Criteria for the top tier will be more stringent.
- The program will present an alternative to OFCCP’s establishment‐based compliance evaluations with a focus on recognizing contractors that have comprehensive, corporate‐wide inclusion and compliance programs.
- Contractors will apply to the program electronically beginning in fiscal year 2020.
- During the application process, OFCCP will conduct compliance reviews of the contractor’s headquarters location as well as a sample or subset of establishments.
- To participate in the program, contractors will demonstrate that they meet established criteria that verifies not only basic compliance with OFCCP’s requirements, but a demonstrated commitment to and application of successful equal employment opportunity programs on a corporate‐wide basis.
- With every contractor accepted into the program, OFCCP will enter into an agreement that removes the contractor from OFCCP’s neutral scheduling process for the duration of the agreement, so long as the contractor abides by all terms of the agreement. The agreement will remain in effect for the duration of the contractor’s participation in the program. OFCCP would retain the right to conduct individual and/or third party complaint investigations of contractors participating in the VERP.
- Contractors qualifying for the top tier can remain in the program for a period of five years and be re‐evaluated to stay in the program at the five‐year mark.
- Contractors qualifying for the second tier can remain in the program for three years and will receive individualized compliance assistance to become a top performer.
- To remain in VERP, OFCCP will expect contractors to maintain a workforce free of discrimination or other material violations, and provide periodic reports and information to OFCCP through which OFCCP can confirm these efforts.
- Program applicants who do not qualify for the program will return to the pool of contractors that OFCCP may schedule for compliance evaluations through OFCCP’s neutral selection process. OFCCP will not automatically place rejected applicants on a scheduling list.
- OFCCP will retain the right to terminate agreements with contractors who do not maintain the requirements of VERP and return these contractors to the pool from which OFCCP may schedule compliance evaluations.
OFCCP’s VERP has similarities to the Occupational Safety and Health Administration’s (OSHA) Voluntary Protection Programs (VPP) in that it is a voluntary program aimed at creating a cooperative relationship between employers and the agency while also recognizing the efforts of employers to comply with regulatory obligations. Many believe the VPP is beneficial because it provides a competitive advantage to employers while also fostering a good relationship between employers and OSHA. It is yet to be seen if the VERP will have the same impact for federal contractors.