OFCCP Affirmative Action Audits on the Horizon

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The OFCCP is about to commence audits of federal contractors to ensure compliance with their affirmative action obligations.

The Office of Federal Contractor Compliance Programs (“OFCCP”) is focusing on the requirement that federal contractors adopt and annually update affirmative action plans. On August 2, 2018, the OFCCP’s Acting Director, Craig Leen, participated in a public discussion during which he reviewed the current compliance process for contractors.   Currently, contractors simply “check the box” to certify compliance with affirmative action obligations in the General Services Administration’s (“GSA’s”) System for Award Management (“SAM”) registration system.  Mr. Leen expressed concern that many contractors checking the box do not actually possess a valid affirmative action plan.

Mr. Leen’s comments were followed-up by a new OFCCP directive on August 24, 2018:  Directive 2018-07.  The subject of that directive is the commencement of an “Affirmative Action Program Verification Initiative.”  OFCCP “is concerned that many federal contractors are not fulfilling their legal duty to develop and maintain AAPs [Affirmative Action Plans] and update them on an annual basis.”  Therefore,  Directive 2018-07 requires OFCCP to develop a comprehensive program to verify that federal contractors are complying with affirmative action obligations on a yearly basis.  That program will include:

• Development of a process whereby contractors would certify on a yearly basis
compliance with AAP requirements.
• Inclusion of a criterion in the neutral scheduling methodology increasing the
likelihood of compliance reviews for contractors that have not certified compliance
with the AAP requirements.
• Compliance checks to verify contractor compliance with AAP requirements.
• Requesting proffer of the AAP by contractors when requesting extensions of time
to provide support data in response to a scheduling letter.
• Development of information technology to collect and facilitate review of AAPs
provided by federal contractors

Directive 2018-07 does not provide a timeline for implementation.  Nevertheless, it is abundantly clear that compliance audits are coming.  Therefore, federal contractors should carefully review their affirmative action plans for compliance, and make sure that those plan are updated annually.

Federal Contractors: OFCCP Issues Directive on Religious Freedom

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The OFCCP issued a directive requiring recognition of religious freedom.

The Office of Federal Contract Compliance Programs (“OFCCP”) has issued a new directive reminding its staff members of their obligation to recognize the religious freedom of federal contractors.  Here’s a link to the new directive:  Directive 2018-3.  Here’s a link the OFCCP press release about the directive:  Press Release.

The directive was issued in response to several recent decisions from the United States Supreme Court on religious freedom, and President Trump’s executive order which “reminded the federal government of its duty to protect religious exercise — and not to impede it.”  Thus, the OFFCP reminded its staff that:

• They “cannot act in a manner that passes judgment upon or presupposes the
illegitimacy ofreligious beliefs and practices” and must “proceed in a manner
neutral toward and tolerant of … religious beliefs.”
• They cannot “condition the availability of [opportunities] upon a recipient’s
willingness to surrender his [ or her] religiously impelled status. ”
• “[A] federal regulation’s restriction on the activities of a for-profit closely held
corporation must comply with [the Religious Freedom Restoration Act].”
• They must permit “faith-based and community organizations, to the fullest
opportunity permitted by law, to compete on a level playing field for …
[Federal] contracts.”
• They must respect the right of “religious people and institutions … to practice
their faith without fear of discrimination or retaliation by the Federal
Government. “

As a practical matter, the new OFCCP directive does not provide much clarity on a key religious issue:  whether government contractors can discriminate against LGBT persons based upon religious beliefs.  Indeed, I previously wrote that President Trump will not rescind President Obama’s Executive Order prohibiting LGBT discrimination:  Trump and LGBT.  For now, government contractors should proceed cautiously if they want take employment actions based upon religious beliefs.

OFCCP: TRICARE Moratorium Extended to 2021

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The OFCCP extended a moratorium which excuses TRICARE providers from compliance with affirmative action obligations.

Should TRICARE providers be required to implement affirmative action?  That’s the issue that the United States Department of Labor raised when it issued Directive 2014-01 on March 7, 2014.  Here’s a link to that directive:  DOL Directive 2014-01.  TRICARE is a federal healthcare program that provides benefits to American veterans.  The DOL’s Office of Federal Contract Compliance Programs (“OFCCP”) is responsible for enforcement of the affirmative action obligations imposed upon federal contractors.  Directive 2014-01 effectively imposed a five-year moratorium on requiring TRICARE subcontractors to comply with those obligations.  On May 18, 2018, OFCCP extended that moratorium to May 7, 2021.

Federal laws and regulations require federal contractors and subcontractors to take affirmative steps to ensure equal employment opportunity in their employment processes. When it issued Directive 2014-01, the DOL  recognized a difference of opinion as to who is a covered subcontractor under the law and what obligations the TRICARE subcontractor community has under the law.  Because of that difference of opinion, DOL decided that it would impose the moratorium on enforcement.

The moratorium, however, was set to expire in 2019.  OFCCP’s May 18, 2018 press release extended the moratorium.  Here’s a link to the press release:  May 18, 2018 Press Release.  OFCCP provided the following rationale for extending the affirmative action moratorium:  “Active-duty and retired service members, and their families, too often have difficulty accessing health care. There is evidence suggesting that continued uncertainty regarding the extent to which OFCCP requirements apply to TRICARE providers exacerbates these challenges. With the approaching expiration of the moratorium adding additional uncertainty, this extension will provide OFCCP time to receive feedback from stakeholders, relieve uncertainty, and give OFCCP an opportunity to evaluate and address legislation that may be enacted on this issue.”

 

Government Contracts: OFCCP Compensation Audits Might Change

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The OFCCP might make compensation audits more fair for government contractors.

Recent discussions inside the Office of Federal Contractor Compliance Programs (“OFCCP”) indicate that compensation audits of federal contractors might become more fair for employers.  On April 19, 2018, Bloomberg News released an article indicating that OFCCP was contemplating significant changes to its audit rules.  Here’s a link to the Bloomberg article: Bloomberg OFCCP Article.  The OFCCP conducts audits of government contracts and federal contractors to ensure that employers are complying with federal laws and regulations prohibiting pay discrimination.  Under the Obama Administration, the OFCCP issued Directive 307, which allows auditors to compare compensation of employees even if they perform different work.  For example, auditors might find discrimination by comparing the compensation of two “managers,” even though one manager works in accounting and the other in human resources.

Comparisons of dissimilar employees are generally not permitted in discrimination cases arising under Title VII of the Civil Rights Act of 1964.  Instead, an employee suing for pay discrimination must usually compare themselves to another employee doing the same work, in the same location, with the same supervisors.  Because of the discrepancies between OFCCP’s enforcement efforts and traditional employment law, the U.S. Chamber of Commerce released a report in late 2017 critical of the OFCCP.  It’s report, “OFCCP, Right Mission, Wrong Tactics” can be found here.

The Bloomberg article indicates that the OFCCP is about to scrap or significantly change Directive 307.  That’s good news for federal contractors, who need consistency in the law to succeed in business.  Unfortunately, the Bloomberg article caused some concern among civil rights groups, and an article from the Society for Human Resource Management (which can be found here) indicates the OFCCP’s plans may be delayed.  Even with the delays, the information coming from OFCCP is good news for government contractors, because it indicates a willingness by OFCCP to address employer concerns.