Federal supply and service contractors and subcontractors have long been required to create and maintain written affirmative action plans (“AAP”) if they meet certain contracting thresholds. Unless and until a contractor was audited by the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”), however, there was no real mechanism for the government to confirm that contractors were in compliance with these obligations. Even though contractors are required to certify compliance in order to contract, OFCCP’s experience through audit demonstrated that many contractors were not, in fact, compliant. Indeed, OFCCP found that approximately 85% of contractors selected for audit were unable to submit copies of their written AAPs within 30 days of receipt of the scheduling letter. OFCCP inferred from such failure that many contractors had not timely completed their AAPs at the time of audit.
In order to improve and increase compliance, contractors who are required to have written AAPs will now be required to register through the OFCCP portal and certify compliance each year through a new online contractor portal developed by OFCCP. Contractors who do not certify they are in compliance will be more likely to be selected for audit. While it does not appear that contractors will be required to routinely upload copies of their AAPs (at least not at this time), the portal will provide a means by which contractors can submit copies of their AAPs during audits or compliance evaluations.
Beginning on February 1, 2022, covered contractors and subcontractors may register for access to the portal. OFCCP will also send emails to covered contractors inviting them to register. However, entities are still required to register even if they do not receive an invitation. Registration is similar to registration for other secure sites – contractors will create an account, confirm their email and provide a means of dual authentication. Contractors need only have their EIN available in order to register. The portal is set to pre-populate information from the contractor’s 2018 EEO-1 form, but contractors will have the ability to add or edit company and establishment information. The first person to create a login for the company will be granted administration privileges, but a company can add as many users as it wishes.
Contractors may begin certifying compliance using the portal on March 31, 2022 and must have registered and certified compliance by no later than June 30, 2022. New federal contractors must develop their AAPs within 120 days, and must register and certify compliance through the portal within 90 days of developing the AAPs.
Contractors may access the portal in order to register here. Contractors may also wish to review OFCCP’s FAQs here, which may be updated periodically to provide updated information and resources in the upcoming months.
To prepare for the new requirements, covered contractors who do not already have their AAPs in place or in process should begin now to prepare their required AAPs so that they are in a position to certify they are in compliance by June 30, 2022.
Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.
[View source.]
