At the Industry Liaison Group Conference held in August 2018, then acting OFCCP Director Craig Leen spelled out the agency’s go-forward strategy—transparency, certainty, efficiency, and recognition.
As a quick summary, the agency will be focusing on discovering real problems and holding contractors accountable. But they also expressed willingness to collaborate with contractors to resolve issues.
Available Pools for Audit Selection
On March 19, 2018, the OFCCP published its methodology to identify and select establishments to include on future audit scheduling lists. In the past, it was understood that establishments with 50 or more employees were possible targets for an OFCCP audit, and that the selection process was neutral.
That threshold has now changed. The OFCCP’s current methodology produced an Available Pool, containing establishments with 100 or more employees that are eligible for audit selection.
The OFCCP filtered the Available Pool by removing establishments using EEO-1 data, Lexis-Nexis Corporate Structure, and Duns and Bradstreet Family Tree and under specific stipulations like audit history and review status.
The final list was capped at 1000 establishments and distributed to the OFCCP District offices based on available FTE resources.
On October 22, 2018, the OFCCP published a supplement to the 2018 Supply and Service scheduling list, producing a revised Available Pool. The original list was further filtered by removing all establishments with contracts expiring on or before December 31, 2018 and capped at 750 establishments.
This information was used to produce the Corporate Scheduling Announcement Letters (CSALs).
Regardless of the 100 employee threshold, we still believe it’s a best practice to properly prepare an affirmative action program for every establishment with 50 or more employees. Contractors are still obligated to prepare and update their affirmative action program regardless of audit expectations or the OFCCP’s audit selection process.
Focused Audits are Here
Recent OFCCP announcements note that starting this year, a select number of future audits will be scheduled as Focused Audits. This means that establishments selected for audit will be audited under one of the specific regulations—Section 503, VEVRAA, or EO 11246. Clearly, it’s imperative that contractors be well prepared for each of these requirements.
Spotlight on Section 503 and VEVRAA
Contractors should be fully prepared to meet all record-keeping requirements under both obligations, covering a 3-year window.
If an establishment is selected for audit, you will be required to provide an analysis of the effectiveness of programs put in place to address shortcomings in your Disability and/or Veteran AAPs.
Note that Compliance Officers expect actual proven results of your programs. Simply stating that programs have been implemented will not be sufficient.
In particular, contractors should review their process and records for self-identification of disability status.
During the first year of the Section 503 program, contractors were required to invite employees to voluntarily identify as having a disability as defined in 60-741.2(g)(1)(i) or (ii).
To ensure full compliance, contractors should verify the date their program became active and plan to re-invite employees to self-identify their disability status within the 5-year window. Contractors must also remind employees of their ability to update disability status, at least once between these invitations.
Update on Corporate Scheduling Announcement Letters
Federal Contractors subject to Executive Order 11246, Section 503, and Vietnam Era Veterans Readjustment Assistance Act of 1974 (VEVRAA) should take proactive steps to develop their affirmative action programs in advance of receiving an audit scheduling letter.
One thousand CSALs were mailed in the first release on February 1, 2018 with 750 additional CSALs sent on September 22, 2018. It’s important to note that universities were not included in the supplemental release, but it did contain Functional AAPs.
Get Answers: What’s an FAAP and is it right for you?
The contents of the first mailing were taken into consideration to limit audit scheduling so that it included no more than 10 establishments of any parent company.
The OFCCP encourages contractors to be proactive and timely in submitting audit material, but fewer than 20% do so (PDF).
The next round of CSALS is expected to be published in February or March 2019. Establishments included in this round of CSALs could be targeted for a focused review.
Recognition for High-Quality Programs
Under OFCCP Directive 2018-06, the agency’s Contractor Recognition Program became effective on August 24, 2018.
The OFCCP will be recognizing contractors who have implemented high-quality programs and initiatives that drive results. Specifics haven’t yet been published, as the OFCCP will be reaching out to the federal contractor community to solicit details to define the final program.
So far, two programs have been announced:
- Excellence in Disability Inclusion
- Leadership in Equal Access and Disability.
The comment period closed in December 2018, and both of these programs are subject to approval by the Office of Management and Budget (OMB).
The key takeaway here is contractors who earn these awards will receive a two- and three-year moratorium, respectively, from scheduled compliance evaluations.
In addition to this benefit, recognition for excellence as an employer has great potential to help attract and retain employees.
This could tip the balance in ROI as contractors weigh the cost vs. benefit of these programs. The application process will present a burden, certainly, but the benefits offer significant value for contractors who are proactive in engaging job seekers and employees with disabilities.
From Compliance to Competitive Advantage
By fully embracing the true purpose behind affirmative action, your company can reap benefits well beyond compliance and risk mitigation. When successfully planned and executed, a strong AAP increases diversity in thought, skill, background, and education across your organization. And that diversity will seed and inspire innovation, engagement, and competitive advantage.