OFCCP To Ramp Up Audits In Fiscal Year 2019

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Federal contractors beware: the U.S. Department of Labor Office of Federal Contract Compliance Programs (OFCCP) intends to increase significantly the number of audits it performs in the current Fiscal Year 2019 to 3,500. Federal contractors and subcontractors will be notified electronically by the OFCCP in mid-to-late March if they have been identified for a potential audit. Now is the time to review information and organize data gathering processes to ensure compliance in the event of receiving an audit notice. 

Specifically, the OFCCP is tasked with ensuring that federal contractors comply with their equal employment opportunity and affirmative action obligations. Under Executive Order 11246, as amended, federal contractors and subcontractors are prohibited from engaging in discrimination based on race, religion, sex, sexual orientation, gender identity or national origin. Section 503 of the Rehabilitation Act of 1973, as amended, prohibits employment discrimination against individuals with disabilities. Finally, the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA), as amended, makes unlawful employment discrimination against protected veterans.

Wave of Corporate Scheduling Announcement Letters Expected in March

The OFCCP will be electronically publishing (not mailing as in the past) Corporate Scheduling Announcement Letters (CSAL) directed to federal contractors and subcontractors in mid-to-late March 2019. These notifications, which will be posted in the agency’s online FOIA Library, are designed to advise contractors and subcontractors that they were identified for possible scheduling of a supply and service compliance evaluation and to encourage them to completely, accurately and timely produce materials and information for a forthcoming audit. In furtherance of OFCCP Directive (DIR) 2018-04, among the CSALs will include notices for more limited “Focused Reviews” reviewing contractor compliance with Section 503 (Individuals with Disabilities) and VEVRAA and compliance checks consistent with the Affirmative Action Program Verification Initiative Directive (DIR) 2018-07. Contractors should take note that the OFCCP will be using this Scheduling Letter for Focused Reviews (OMB form 1250-0003).

In view of OFCCP’s new practice of electronically posting CSALs, contractors should regularly monitor the agency’s online FOIA Library. In the event the OFCCP posts a CSAL online, federal contractors and subcontractors should advise each establishment within their company of OFCCP postings and notify their human resources department.

Preparing for an Audit

A federal contractor or subcontractor who has been selected from a CSAL should immediately:

  • Collect copies of its Affirmative Action Plans (including for individuals with disabilities under Section 503 and protected veterans under VEVRAA) for the current and prior year and raw data concerning applicants, hires, terminations, promotions and employee compensation.
  • Perform an analysis to determine whether the entity complies with all federal affirmative action requirements.
  • Prepare an Impact Ratio Analysis using its raw data to determine whether women, minority, individuals with disabilities, protected veterans and individual minority groups experience an adverse impact in hiring, promotion or termination.
  • Prepare a compensation analysis to determine if existing wage disparities exist based on race, gender, disability or protected veteran status; and, if disparities exist, determine whether they are defensible.
  • Gather documentation of outreach efforts in job groups that do not meet availability percentages with women, individuals with disabilities, protected veterans and minorities.
  • Gather documentation of outreach efforts regarding veterans and individuals with disabilities.
  • Gather any EEO-1 Reports and Vets 100A Reports that have been filed for the previous three years.

Federal contractors or subcontractors who are listed as the target of a CSAL on the OFCCP FOIA Library that have questions or concerns regarding affirmative action requirements, preparations for a potential audit or compliance issues, should consult with experienced counsel for guidance.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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