On August 24, 2018, the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) issued three new directives, 2018-05, 2018-06, and 2018-07. While directive 2018-05 has received most of the attention because it focuses on reviewing a contractor’s compensation practices during a compliance evaluation, directives 2018-06 and 2018-07 should not go unnoticed.
During OFCCP Town Hall Meetings earlier this year, contractors suggested a return to recognition programs such as the Exemplary Voluntary Efforts (EVE) Award or the Secretary of Labor’s Opportunity Award. Both programs were instituted in the late 1980s to recognize federal contractors for exemplary efforts in advancing fair employment practices and programs. Both programs were ultimately rescinded in 2013. Recognizing that awards and recognition programs may incentivize contractor compliance, the OFCCP issued directive 2018-06 titled, “Contractor Recognition Program.” While short on details, the directive describes several tools and resources under development:
- A contractor recognition program that highlights implementable best or model contractor practices;
- A contractor mentoring program that uses contractors to help their peers improve compliance; and
- Other initiatives that provide opportunities for contractors to collaborate or provide feedback to OFCCP on its compliance assistance efforts.
The directive clarifies that the recognition programs are not about what is required, i.e., complying with legal requirements, but are designed for contractors that are thought leaders in the diversity and inclusion spaces.
Directive 2018-07, on the other hand, was not born out of OFCCP’s Town Hall Meetings, but instead is a product of the U.S. General Accounting Office’s September 2016 report, Equal Employment Opportunity: Strengthening Oversight Could Improve Federal Contractor Nondiscrimination Compliance. In this report, the GAO noted that although contractors must develop an affirmative action plan (AAP) within 120 days of commencement of a qualifying federal contract, there is, in fact, no real process for ensuring that contractors are meeting this requirement or the one to update an AAP annually thereafter.1
Based on this report and the current regulatory scheme,2 OFCCP issued directive 2018-07 titled, “Affirmative Action Program Verification Initiative.” Under this directive, OFCCP proposes to establish a verification program that would initially be a certification review, followed by potential compliance checks, and perhaps the annual submission of AAPs to OFCCP for review.
Additionally, the directive notes that the verification initiative will allow the OFCCP to incorporate AAP certification information into its compliance evaluation scheduling methodology. This is consistent with commentary by OFCCP’s Acting Director at the 2018 National Industry Liaison Group conference, and is designed to make it more likely contractors that have not developed and maintained the required AAPs will be scheduled for a compliance evaluation.
It is important to note that while this directive lacks specifics, OFCCP is clearly looking at making AAP verification an integral part of its compliance efforts moving forward. As such, contractors that have never prepared an AAP or who are not diligent in their annual efforts to update their AAPs should begin planning accordingly for this new initiative.