Two new Office of Federal Contract Compliance Programs (OFCCP) proposals with significant potential impact on federal contractors and subcontractors are currently subject to public comment (and potential change based on the comments received). One is a proposed rulemaking that imposes substantially increased data collection and affirmative action plan requirements for protected veterans under the Vietnam Era Veterans Readjustment Assistance Act, as amended (VEVRRA), for which the comment period expires on June 27, 2011. The second is a proposal that the Office of Management and Budget (OMB) approve substantially more burdensome requirements in the OFCCP’s audit Scheduling Letter and “Itemized Listing,” for which the comment period expires on July 11, 2011.

Scheduling Letter and “Itemized Listing” Proposal

OFCCP has made a “stealthy” proposal to the OMB that will make compliance audits far more burdensome and costly. OFCCP has asked OMB to approve changes in the current scheduling letter (commonly known as the “30-day letter”) and information requests that go to federal contractors and subcontractors when OFCCP initiates a compliance audit under Executive Order 11246, the Rehabilitation Act and VEVRAA. Notice of the comment period on this proposal was provided in the Federal Register on May 12, 2011 (Vol. 76, No. 92, p. 27670), under the heading “ Proposed Extension of the Approval of Information Collection Requirements: Comment Request.” The comment period expires on July 11, 2011.

The innocuous title, and the fact that (a) neither the text nor a description of the proposed changes appears in the notice, and (b) no mention is even made on OFCCP’s website, may cause this to “slip under the radar” with most contractors and subcontractors. The way to see what is actually in the proposal is to contact the individual listed in the notice and ask for copies, which we have done, and you can access by clicking below.

While characterized in the notice as a “proposed extension” of OMB approval of the current scheduling letter for service and supply contractors (which expires on September 30, 2011), there are significant and problematic changes, especially in the “Itemized Listing” that is typically attached to the scheduling letter. Significant proposed new requirements include the following:

  1. There would be 13 required data submissions in the Itemized Listing request, instead of 11.
  2. Copies of company personnel documents must be submitted with the initial response to the 30-day letter. This includes company leave policies, including FMLA leave, pregnancy leave, accommodations for religious practices, and other employee manual policies. This is a new requirement, and would mean company policies will now be evaluated at the desk audit stage. Moreover, the FMLA policy request is consistent with the Department of Labor’s announced FMLA enforcement coordination between the Wage and Hour Division and OFCCP.
  3. Employee activity data regarding applicants, hires, terminations and promotions must be submitted by job title as well as by job group. Currently, such data were only required to be submitted by job group.
  4. Application, hire, promotion and termination data must be displayed by racial/ethnic group (African-American/Black, Asian/Pacific Islander, Hispanic, American Indian/Alaskan Native, and White), no longer by just minority/non-minority and gender. Unknown ethnicity and unknown gender must also be included.
  5. Promotions must include the actual pool of candidates considered for promotion. In addition, terminations must include the actual pool of candidates considered for termination, and whether termination was voluntary or involuntary. In the past, “pools” were estimated by OFCCP based on prior year job group data. This change will require contractors to identify actual pools of employees from whom promotions were made. With terminations, this will mean identifying employees among whom reduction in force decisions were made during the review period.
  6. Compensation data must be provided in the initial response to the 30-day letter for every employee as of the nearest February 1, to include race/ethnicity, gender, date of hire, job title, EEO-1 category and job group. Compensation includes base salary/wage rate, bonuses, incentives, commissions, merit increases, locality pay and overtime, separately for each employee. Documentation and policies that explain compensation factors must be included as well. Further, the data are to be provided electronically. This is a major change from the current requirement that the contractor submit annualized total compensation data by salary range, rate, grade or level, grouped by race/ethnicity and gender, rather than individualized compensation.
  7. Data must be submitted showing compliance with VEVRAA and the Rehabilitation Act, including copies of company accommodation policies and records of accommodations provided, as well as copies of VETS-100/100A reports for the last three years.
  8. The 30-day letter also notifies contractors that OFCCP will verify compliance with veterans’ reporting requirements, and provides an email address for electronic data submissions.

In addition, the OFCCP proposes a new “compliance check” letter, which it may use instead of the regular 30-day letter when it decides not to do a full compliance review. The compliance check letter requests more limited data and offers the contractor the option of sending the response to OFCCP for review within 30 days or making it available for OFCCP review on-site. It also advises the contractor of its more extensive obligations in the event of a full compliance review. The proposed data to be submitted in response to a compliance check are:

  • AAP results for the preceding year.
  • Examples of job advertisements, including listings with the state employment service.
  • Examples of accommodations for persons with disabilities.

The OFCCP’s proposed compliance check letter seeks to assure contractors about confidentiality. For example, the proposed letter advises contractors to “[r]est assured that OFCCP considers the information you provide in response to the Scheduling Letter as sensitive and confidential” and states that “any disclosures we may make will be consistent with the provisions of the Freedom of Information Act.” However, OFCCP is not subject to the statutory confidentiality requirements that apply to the EEOC under Title VII. While it does contain some protection for confidential information, FOIA is fundamentally a disclosure statute. This coupled with the OFCCP’s announced referral relationship with plaintiffs’ lawyers under the auspices of the American Bar Association, gives contractors reason to be concerned about confidentiality as well as the burdensomeness of these proposed requirements.

VEVRRA Data Collection and Affirmative Action Plan Proposal

This Notice of Proposed Rulemaking (NPRM) was published in the Federal Register on April 26, 2011 (Vol. 76, No. 80, pp. 23358 – 23425) and is discussed on OFCCP’s website. The NPRM is quite lengthy, and the full text can be accessed here.

The new requirements proposed by OFCCP include:

  1. Contractors must take mandatory actions in recruitment, training, recordkeeping and dissemination of affirmative action policies relating to protected veterans.
  2. Contractors must increase data collection relating to protected veteran referrals, applicants and hires.
  3. Contractors will be required to collect, maintain and produce to OFCCP data that are not currently required, including:
    • Number of protected veterans referred by the state employment service.
    • Number of protected veterans who applied for employment.
    • Number of protected veterans hired.
  4. For the first time, OFCCP will require contractors to set “benchmarks” (aka goals) on an annual basis for hiring protected veterans. Benchmarks are to be set in reference to the percentage of veterans in the civilian labor force in the state and the number of veterans who participate in the state employment service referral program. However, these data may not identify the number of protected veterans.
  5. Contractors must invite protected veterans to self-identify at the pre-offer stage as well as the post-offer stage of the hiring process. The results will be included in the data collection and monitoring process.
  6. Mandatory job listing requirements with the state employment service are spelled out, with priority referrals of protected veterans to be requested at each location in the state, and contact information to be provided for each location in the state. Any outside job search sources are to be told to provide contact information to the state employment service.
  7. Rather than simply suggesting outreach sources, the proposed regulations require a minimum of three types of specified outreach and recruitment activities, provide a list of optional outreach and recruitment activities, and require the contractor to annually review and evaluate the effectiveness of their outreach efforts.

Contractor Comments

If these proposals are going to be blocked or modified, contractors need to make themselves heard by filing comments that the OFCCP will have to address. The agency does not understand the private sector or have any apparent concern about the burdens and confidentiality issues these proposals place on contractors. The Federal Register notices contain instructions for filing comments. The deadlines are June 27, 2011 (VEVRRA NPRM) and July 11, 2011 (Scheduling Order proposal). Employer and industry groups are likely to be filing comments, but comments and specific concerns from actual employers sometimes seem to get more consideration.