OFCCP Touts the Success of its Early Resolution Procedures

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To increase its efficiency in ensuring the regulatory compliance of supply and services contractors, the OFCCP implemented Early Resolution Procedures (ERP) in 2018. The ERP allows contractors to proactively correct violations during compliance evaluations and quickly enter into agreements with the OFCCP without incurring the time and expense of a full compliance evaluation. The ERP requires compliance officers to resolve non-material violations that can be corrected immediately during a desk audit if there are (1) no additional indications of discrimination violations; (2) no evidence of a lack of good faith; and (3) no immaterial technical violations.

For material technical violations, including recordkeeping violations and applicant tracking deficiencies, the agency resolves audits by offering an Early Resolution Conciliation Agreement with Corporate-Wide Corrective Action (ERCA). The ERCA requires contractors to review all of their establishments, correct any violations, and submit progress reports with the results of their efforts. Contractors agreeing to the terms of the ERCA will avoid a new compliance evaluation for five years. If a compliance officer discovers material violations involving discrimination during a desk audit, the OFCCP will prepare a refined analysis to confirm the results of the desk audit and offer an ERCA.

Since the implementation of the ERP in 2018, the agency has signed 18 ERCAs, covering about 312,000 employees under monitoring and reporting at over 850 contractor establishments. The ERCAs have resulted in the payment of $31 million in back pay, and an additional $5 million in salary adjustment commitments. The agency projects that it will have an additional 30 ERCAs signed by September 2020, securing more than $50 million in back pay. Moreover, the ERP contributed to a reduction in the aged case rate from 22.8% in 2018 to 18.1% in 2019 and to 12% in March 2020, which met the agency’s efficiency goal.

The success of the ERP has positive implications for contractors. Contractors have an opportunity to correct violations quickly during desk audits and, if they enter into an ERCA, may provide assurance against compliance evaluations for five years.  It also allows contractors to avoid the process of having to receive Predetermination Notices or Notices of Violation and proceed directly to conciliation, minimizing the potential impact of multiple violations. Contractors should consider taking advantage of these procedures to quickly resolve any compliance irregularities.

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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