The OFCCP has released a new directive – the Active Case Enforcement Directive (ACE) – to replace the Active Case Management directive (ACM) which was rescinded by OFCCP in December 2010. The ACE procedures will result in more in-depth OFCCP audits and will greatly increase the chances of OFCCP making findings that are adverse to the companies they audit.
Under the ACE Directive, the OFCCP will conduct full desk audits of every contractor selected for a compliance evaluation. This is in contrast to the previous ACM procedure that required full desk audits only for every 25th contractor audited or for any contractor for which an abbreviated desk audit revealed indicators of potential class-wide, systemic discrimination. Under the ACE Directive, every 25th contractor audited will be selected for a full compliance review – desk audit, onsite review, and possible offsite analysis – regardless of the findings of the initial desk audit. This will generate far more full reviews than the old procedures, which required a full compliance review only of every 50th contractor or when there were indicators of class-wide or systemic discrimination.
At the beginning of every audit , OFCCP will contact the EEOC and State fair employment practices agencies to determine the nature, status, and outcome of any complaints filed against the contractor. The directive says OFCCP will expand this effort to also include gathering information from other federal enforcement agencies, such as OSHA and the Wage Hour Division, to determine if the employer has a history of violating other employment statutes that might be looked to as a possible indicator of discrimination.
Perhaps of greatest significance is the fact that OFCCP will now proceed to an onsite review where there are any "indicators of discrimination." In the past, other than doing an onsite of every 50th contractor, the agency did an onsite only where there were indicators in the desk audit of systemic or class-wide discrimination. Under the ACE Directive, an onsite will be triggered by indicators of any sort of discrimination. The Directive says that discrimination can be indicated by statistical indicators, anecdotal evidence, patterns of individual discrimination, patterns of systemic discrimination, patterns of major technical violations involving recordkeeping or failure to maintain an AAP, and indications of noncompliance with other labor and employment laws administered by other federal agencies. Stating that discrimination may be indicated by patterns of "major" recordkeeping violations or by non-compliance with other laws that have nothing to do with discrimination is a very aggressive and some might argue unfair approach. For example, the ACE directive says that a contractor's violation of wage hour laws can be an indicator of possible discrimination.
OFCCP has said that it intends to conduct fewer audits in the future but that those it does conduct will be more detailed and thorough. The procedures adopted in the ACE directive certainly confirm that when OFCCP calls on you for an audit in the future there is a far greater likelihood of a longer, more aggressive encounter with the agency.