Office of Federal Contract Compliance Programs (OFCCP) audits can be complex, which is why it’s so important federal contractors understand the latest requirements and trends impacting enforcement.
Here are some of the latest OFCCP audit trends and expectations you should be aware of:
Section 503 and VEVRAA regulation enforcement
OFCCP is still expecting full compliance to the revisions that were made to the Individuals with Disabilities (IWD) and Protected Veterans (PV) regulations. Current audit activity shows the agency is focusing heavily on these requirements. In fact, actual requests posed by officers in recent reviews are asking for information including:
- A snapshot of the company’s online application system and its flexibility for users.
- Documented mandatory job listings.
- Verification of outreach activities for the period under review
- List of each job posted during the prior year and current year review period.
- Physical or reasonable accommodations made.
- Medical examination requirements statement.
- Subcontractor/vendor notifications.
- Proof of EEO language in job advertisements.
The list above is not exhaustive since individual officers and OFCCP offices have a lot of discretion to request additional information during an audit. They may even contact you before you submit your affirmative action plan (AAP) with specific requests.
Outreach and recruitment efforts
It’s also clear from audit activity OFCCP is still focusing on hiring/promotion selections and outreach/recruitment activities. Toward the end of 2015, OFCCP was more focused on personnel actions—asking for details about selection decisions in an effort to discover discrimination that could result in a financial settlement. Now, more than ever, it is imperative you examine selection rates and ensure your outreach and recruitment efforts are effective. For example:
- The IWD and PV AAPs now contain applicant and new hire data so contractors (and OFCCP) can assess the effectiveness of your outreach and recruitment efforts, hiring, and selection procedures. This data must be maintained for three years so ongoing efforts can be evaluated over a period of time.
- As noted earlier, an officer may request proof you are engaging in efforts to identify and recruit IWD and PV. This includes proving you made the mandatory job listings with the Employment Service Delivery System offices required by VEVRAA. OFCCP may contact individuals who represent your recruitment and outreach partners to determine the extent of your engagement with them. Are you just pushing out job postings to them? Or, are you interacting and communicating your company’s needs and requirements ensuring you get qualified referrals for open jobs?
- Outreach and recruitment activities in job groups where there are goals for women and minorities are also important. You will be expected to show progress toward those goals and identify what actions you took.
A focus on compensation compliance
OFCCP continues to focus on compensation. Two events have already taken place this year to underscore the importance of fair pay to this administration. First, Executive Order 13665, Pay Transparency, became effective in January and it prohibits federal contractors from taking adverse action against employees or applicants who disclose or discuss compensation information.
Next, you may have heard the EEOC has proposed revisions to the EEO-1 Report for the 2017 reporting cycle. These revisions would require submission of aggregated compensation data and hours worked by EEO-1 category, race, and gender using salary bands. All federal contractors, and private employers with 100 or more employees, would be required to submit the reports in the revised format. The comment period closed April 1, 2016, and more details will be available soon.
OFCCP is working with EEOC on this proposal, but the agency does not have to wait for the EEO-1 changes to evaluate a contractor’s compensation practices because employee level compensation data is submitted for a compliance review. Officers continue to evaluate compensation in many ways, including the workforce in total, by grouping similar jobs together by job group, and comparing individuals in the same or similar job titles.
Pat Shiu, OFCCP’s Director, recently commented in a Wall Street Journal article that the agency has been focusing on pay discrimination cases involving multiple workers, and it is pursuing “…dozens of very big systemic discrimination cases throughout all kinds of industries. You’ll see a real uptick in 2016, 2017, 2018,” she says.
Shiu has made it crystal clear one of OFCCP’s primary roles is to protect workers and believes that ferreting out unexplained differences in pay is a major way to provide this protection.
Contractors are advised to continue to perform annual pay equity analyses to be prepared for challenges to their compensation practices. Recently we have seen an increase in OFCCP requests to interview compensation managers and those who make compensation decisions. Interview topics include:
- Starting pay
- Merit increases
- Compensation policy and practice
- Other types of compensation—bonus, commission, awards, overtime, etc.
- Self-audits and adjustments made as a result of a self-audit