OFCCP Proposes Updates to Scheduling, Compliance Check, and Focused Review Letters
On April 12, 2019, the OFCCP submitted new forms of its scheduling, compliance check, and Section 503 focused review letters to the Office of Management and Budget (OMB) for approval. OFCCP also sought OMB’s approval of a new scheduling letter for VEVRAA focused reviews. OMB’s authorization of the current versions of the scheduling and compliance check letters is scheduled to expire on June 30, 2019. Government contractors and other interested parties have until June 11, 2019 to submit comments to OMB regarding the new form letters.
If approved, the changes to the OFCCP’s letters will impose significant new data reporting requirements on contractors. Some of the major changes are described below:
Contractors must identify their three largest subcontractors to OFCCP.
In addition to the percentage of minority and female incumbents within each job group, contracts must also submit the specific race of each employee within the job group.
In addition to placement goals for minorities and women generally, contractors must submit data from which OFCCP can determine disparities in the utilization of particular minority groups, or men or women of particular minority groups, to create separate goals for these groups.
Significantly, OFCCP will require contractors to submit the results of their most recent compensation system analysis.
Contractors must identify the pool of candidates from which promotions were selected by gender and race/ethnicity.
In submitting data regarding terminations, contractors must state whether terminations were voluntary or involuntary.
Section 503 Focused Review Letter
Contractors must submit information provided by each applicant or employee who self-identifies as an individual with a disability.
Contractors must submit applicant and employee-level employment activity data concerning applicant flow, hires, promotions, and terminations of disabled and non-disabled employees and applicants.
Contractors must submit employee-level compensation data of disabled and non-disabled employees.
In addition, all of the data required to be submitted to OFCCP must now be submitted electronically to facilitate OFCCP’s analysis.
OFCCP’s supporting statement for the proposed letters reveals that OFCCP intends to increase the number of audits it conducts. For fiscal year 2018, OFCCP audited 3,500 contractor establishments, divided between full compliance audits, compliance checks, and Section 503 focused reviews. In its submission to OMB, OFCCP stated that it anticipates conducting 2,500 full compliance audits and 1,000 compliance checks, and that the number of Section 503 and VEVRAA focused reviews will increase from 500 in fiscal year 2019 to 1,500 by fiscal year 2021.
OFCCP’s submission shows that the agency intends to seek increasing amounts of data, at an increasingly granular level, from an increasing number of contractor establishments and functional units. Contractors would be well served to reevaluate their data collection and analysis and other compliance procedures with the assistance of experienced counsel to ensure that they are meeting all applicable requirements and identify and address potential issues before they are discovered in an OFCCP audit.