On November 30, 2018, the U.S. Department of Labor, Office of Federal Contract Compliance Programs (OFCCP) announced 3 new directives for the 2019 fiscal year. The first directive signed by OFCCP Acting Director, Craig Leen, rescinds DIR 2011-01, Active Case Enforcement (ACE) Procedures.
In December 2010, ACE procedures replaced the former Active Case Management (ACM) procedures used for supply and service compliance evaluations. While ACM focused on cases in which indicators of systemic discrimination under Executive Order 11246 existed and generally shorter audits, ACE procedures required full audits under all three regulations enforced by the OFCCP.
Compliance Review Procedures
Under DIR 2019-01, compliance evaluations will be handled in accordance with the Federal Contract Compliance Manual (FCCM) and any additional OFCCP guidance, as needed. The OFCCP intends to increase the number of compliance evaluations, shorten desk audits, and conciliate issues more efficiently.
For contractor establishments that have undergone a compliance evaluation, they will be exempt from another neutrally scheduled compliance evaluation for 24 months—either from the date of closure of the compliance evaluation or the date OFCCP accepts a final progress report.
If the compliance officer (CO) comes onsite as part of the compliance evaluation, the CO may evaluate any aspect of compliance under EO 11246, VEVRAA, or Section 503 of the Rehabilitation Act where indicators or concerns existed that triggered the onsite review.
Early Resolution Procedures (ERP)
The second, Directive 2019-02, promotes early and efficient supply-and-service compliance, which will benefit the OFCCP, federal contractors, and workers. The OFCCP encourages contractors to proactively work alongside the OFCCP to resolve issues through the ERP during compliance evaluations.
According to the directive, compliance evaluations resolved through the ERP won’t require a Pre-determination Notice or Notice of Violation to be issued. The directive addresses three types of violations:
1. Non-Material Violations
If the OFCCP finds non-material violations (e.g., unacceptable AAP element) during the desk audit phase of the compliance review, the CO can seek to resolve the evaluation during this phase and issue a closure letter referencing the non-material violations and their remedies.
Note: If the contractor has other issues, such as indicators of potential discrimination, lack of Good Faith Efforts, or material non-discrimination violations, a closure letter wouldn’t be issued.
2. Material Violations: Non-Discrimination
- Compliance review desk audit phase – After the CO completes this phase of the compliance review for a contractor with multiple establishments, the OFCCP will seek to resolve these types of violations through an Early Resolution Conciliation Agreement with Corporate-Wide Corrective Action (ERCA).
These violations include record keeping, applicant tracking, non-compliant internal audit and reporting systems, and failure to conduct self-analysis.
- Issuance of an ERCA – Contractors are required to review the rest of its establishments during the progress report-monitoring period to determine if similar violations exist and take corrective action, as needed, to fix the issues.
Contractors would be required to prepare and submit progress reports that outline results of analysis, findings, and any correction actions taken by the contractor.
- Terms of the ERCA – Contractors agreeing to the terms would be exempt from receiving another compliance evaluation at that establishment for a 5-year period—from the effective date of the ERCA, during which time the contractor will submit progress reports to the Agency.*
3. Material Violations: Discrimination
If the contractor has multiple establishments, OFCCP will seek resolution through ERCA utilizing the following steps:
- Discuss findings and potential resolutions – Within 14‐calendar days of completing the desk audit, the CO will review the findings with the appropriate OFCCP staff. After considering the potential for ERP resolution, the CO will seek to resolve the matter through ERP.
- Interview and request information – The district office may schedule interviews with appropriate company employees, rejected applicants, or HR staff by phone or video conference.
The CO can also request additional information needed to refine indicators, which may include applicant flow logs or data from HRIS. The OFCCP requests a typical turnaround time of 14 calendar days.
- Refine the analysis – Once the CO receives the requested information, they will expedite improvements within 14 calendar days. If there are still indicators of potential discrimination, the contractor will be offered the ERP option.
- Gather for further subsequent meeting – The OFCCP and the contractor must meet within 14 calendar days of the agreement to discuss findings, remedies, and corrective actions.
During ERP, the contractor may provide additional info for CO consideration. For the establishment under review, the OFCCP will seek make-whole relief for affected class members and monitor implementation of ERCA for a 5-year period, during which the establishment won’t be evaluated.
If conciliation fails during Early Resolution Procedures, the Office will immediately request additional records and data to continue the compliance evaluation—ideally lasting no more than 60 calendar days from the initial meeting between CO and contractor.
Opinion Letters and Help Desk
Directive 2019-03 refers to the Agency’s continuing goal to provide guidance to the contractor community. During the OFCCP Town hall meetings that took place in 2018, stakeholders expressed that they wanted the OFCCP to provide more guidance and resources to help them understand the requirements of federal contractors.
Through this new directive, the Agency will provide additional compliance assistance by enhancing its Help Desk, making certain Help Desk inquiries and responses are dynamically available and searchable as a self‐service option on OFCCP’s website. The Agency also intends to provide fact-specific guidance by utilizing Opinion Letters to employers and employees.
Looking Toward 2019
These 3 directives are aligned with the messaging heard by OFCCP leaders in regard to offering more transparency and additional guidance and resources for its stakeholders.
As we look forward to the next FY, expect to see more helpful updates to the OFCCP’s website and continued conversation between the OFCCP and stakeholders on improving communication between the Agency and contractors and increasing compliance with the regulations it enforces.
* The 5-year scheduling exemption is limited to neutrally scheduled compliance evaluations. If, for example, the OFCCP receives a complaint of discrimination against the contractor, it retains the right to investigate the establishment covered by the ERCA.