Update on the Proposed OFCCP and EEO Merger

On September 7, 2017, the Senate Committee on Appropriations met and made appropriations for various federal agencies—including the Department of Labor—for the fiscal year ending September 30, 2018.

As part of their actions, the Committee rejected the budget proposal to merge the Office of Federal Contract Compliance Programs (OFCCP) with the Equal Employment Opportunity Commission (EEOC) and instead recommends that the OFCCP find alternate means of cutting costs including consolidating offices based on whether the offices align with the current workload needs of the agency.

The Committee has directed the OFCCP to report back in 180 days with information regarding an inventory of the “current infrastructure and a plan to consolidate and right-size the agency.” The federal contractor community has been anxiously awaiting news regarding the likelihood of such a merger which many organizations opposed for various reasons. Some of these reasons included:

  • Heightened risk for contractors to face potentially increased financial penalties since the OFCCP does not currently have authority to issue punitive damages. The EEOC has the authority to issue punitive damages.
  • Although there is some overlap between both agencies with regards to the protected classes covered under laws and Executive Orders which they enforce, there are some differences between the agencies. For example, the EEOC does not have authority to investigate charges of discrimination due to veteran status.
  • The agencies differ in that the OFCCP is proactive in handling compliance reviews to determine the existence of discrimination. OFCCP also proactively assesses whether contractors are taking affirmative action to recruit, hire, and advance women, minorities, individuals with disabilities and protected veterans. In contrast, the EEOC is reactive in the sense that it handles complaints filed by applicants, employees, or former employees claiming discrimination under the laws it enforces.

The budget proposal was taken from President Trump’s earlier recommendations and included the merger of the OFCCP with the EEOC.

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What Would It Really Take to Merge OFCCP and EEOC?

This is not the first time that there has been talk of such a merger. But if a merger was to take place, significant legislative action would be required, and great consideration would be needed regarding direct and indirect impacts of merger.

For one, it takes an act of Congress to make revisions that would give the EEOC jurisdiction over the Vietnam Era Veterans’ Readjustment Assistance Act and Section 503 of the Rehabilitation Act.

In addition, Executive Order 11246—which requires covered contractors to take affirmative action in the recruiting and placement of women and minorities in the workplace—would have to be rescinded or replaced by the President. (Executive Order 11246 also protects applicants and employees of covered contractor organizations from discriminating in employment decisions with regards to national origin, religion, gender identity, and sexual orientation.)

Follow the Money: Interpreting Proposed 2018 Budgets

Going forward, the Senate’s proposed $103 million budget is a reduction from last year’s $105 million. It also represents potential cost reductions in staffing because of rising costs in other OFCCP budget areas.

There are major differences between the Senate’s recommendation, the White House’s recommended budget of $88M, and the House’s recommended budget of $94M. This must be resolved in the final FY2018 budget, which is due on October 1. However, it’s unlikely the budget will be approved by the deadline, meaning OFCCP will be funded through continuing resolutions or until the FY2018 budget is finally approved.

While this ends the latest chapter on the potential merger of the OFCCP and the EEOC, we expect similar proposals for governmental cost-cutting to involve the OFCCP and EEOC.

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