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OFCCP Proposes Burdensome Changes To Its Compliance Review Scheduling Letter – Employee Rights/ Labour Relations

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Executive Summary: Just two days
before the Thanksgiving holiday, the Office of Federal Contract
Compliance Programs (OFCCP) issued a proposed scheduling letter and
itemized listing seeking a number of additional documents and data
at the initial stage of a compliance review. The proposed scheduling letter and itemized listing
were published for public comment on November 21. The OFCCP last
revised its scheduling letter and itemized listing in April 2020.
This most recent proposal, if approved, will exponentially increase
the compliance burden on federal contractors and will ensure that
every compliance review is a deep dive into contractors’ EEO
practices regardless of whether such a detailed level of review is
necessary.

Proposed Changes1

  • Scheduling Letter: Post-secondary educational
    institutions and federal contractors with “a campus-like
    setting” will experience significantly more burdensome
    compliance reviews. If the proposed scheduling letter is approved,
    campus-like contractors will be required to submit the information
    requested in the scheduling letter for all
    affirmative action plans (AAPs) associated with the selected
    institution or entity located in the city and state identified in
    the scheduling letter.

    This proposed change is not entirely surprising, but it is
    questionable. Since former Director Pat Shiu initiated a focus on
    higher education contractors, the OFCCP has struggled with defining
    the scope of compliance reviews where the contractor has multiple
    establishments in one location. The appropriate regulatory course
    of action to address this issue would be to amend the regulations
    themselves to address campus-like settings. This proposed change to
    the scheduling letter is an attempt by the OFCCP to circumvent
    rulemaking in the hopes of getting a quick fix.

  • Itemized Listing: The proposed changes to the
    itemized listing largely focus on fleshing out contractors’
    obligations under the regulations to annually conduct an in-depth
    review of their good faith efforts to make progress towards goals
    and to ensure their personnel processes are not discriminatory.
    Most AAP narratives provide a generic statement that the contractor
    has conducted an in-depth review of all personnel processes and
    found no areas for concern. If the new scheduling letter is
    approved, the OFCCP will no longer accept the standard
    narrative.

    1. EO 11246: The proposed scheduling letter, if
      approved, will require contractors to provide a list of all
      action-oriented programs designed to correct any problem areas
      identified pursuant to a 2.17(b) assessment, which requires
      contractors to perform in-depth analyses of their total employment
      process (recruiting, hiring, promotion, termination, and
      compensation) to determine whether and where impediments to equal
      employment opportunity exist. 2.17(b) should sound familiar to
      contractors as this is the regulation on which the OFCCP’s
      recently revised pay directive is based.

    2. Section 503:

      • If the proposed scheduling letter is approved, a cursory
        statement that the contractor has undertaken an assessment of its
        outreach and recruiting efforts and has determined that its efforts
        were effective is no longer sufficient to demonstrate compliance.
        The proposed scheduling letter requires contractors to submit
        documentation of outreach and positive recruitment efforts
        targeting individuals with disabilities and an assessment of the
        effectiveness of each recruiting effort undertaken. The assessment
        must include the criteria used to evaluate the effectiveness of
        each effort, and a determination of whether each effort was
        effective. Additionally, contractors must indicate whether the
        totality of their efforts were effective, and if not, provide
        documentation of the alternative efforts that will be
        undertaken.

      • Contractors who are six months or more into their current AAP
        year when they receive a scheduling letter must provide updated
        information for at least the first six months of the current AAP
        year.


    3. VEVRAA:

      • Similarly, with respect to protected veterans, contractors’
        response to the scheduling letter must include documentation of
        outreach and positive recruitment efforts to attract qualified
        protected veterans, an assessment of the effectiveness of these
        efforts, including the criteria used to evaluate the effectiveness
        of each effort, as well as the effectiveness of the
        contractor’s overall efforts.

      • Contractors who are six months or more into their current AAP
        year on the date they receive the scheduling letter must provide
        updated information for at least the first six months of the
        current AAP year.


    4. Proposed Amendments to Request for Personnel Activity
      Data:
      The proposed changes to the scope of the personnel
      activity data collection is where we see the most drastic movement
      from desk audit – that is intended to be the
      “triage” stage of a compliance review – to a deep
      dive audit from the outset. If approved, the new scheduling letter
      will eliminate the initial triage stage in favor of moving directly
      to an expansive data analysis.

      • Promotions: Under the proposed changes to the
        itemized listing, promotion data must be broken out by competitive
        and non-competitive movements. Additionally, for each promotion,
        contractors must identify the previous and current supervisors, and
        previous and current compensation. Contractors will also be
        required to submit policies related to promotions.

      • Terminations: The proposed changes require
        that termination data be broken out by the reason for
        termination
        such asretirement, resignation, conduct,
        etc. Simply reporting terminations as voluntary or involuntary will
        no longer be acceptable.

      • Additionally, contractors will be required to report the total
        number of employees, by gender and race/ethnicity, as of the start
        of the immediately preceding AAP year for each job title or job
        group.


    5. Compensation Data: Proposed changes to the
      current Item 19, which seeks compensation data, are significant. In
      addition to the Item 19 data currently provided in response to a
      scheduling letter, contractors will be required to provide the
      following if the proposed scheduling letter is approved:

      • A second snapshot of compensation data as of the start date of
        the prior year’s workforce analysis.

      • Compensation data for temporary employees provided by staffing
        agencies, and data related to factors that determine staffing
        agency employees’ compensation.

      • Documentation and policies, including training documents,
        related to initial compensation decisions, compensation
        adjustments, the use of salary history in setting pay, job
        architecture, salary calibration, salary benchmarking, compensation
        review and approval.

      • Documentation of the contractor’s 2.17(b)(3) Compensation
        Assessment, including date of the assessment, number of employees
        the compensation assessment included and excluded, forms of
        compensation assessed, and method of analysis.


    6. Additional Documents Requested

      • Integrated Postsecondary Education Data System (IPEDS) data
        collection reports for the last three years from post-secondary
        educational institutions.

      • Written employment policies and practices related to complaint
        procedures, anti-harassment, recruiting, screening and hiring
        mechanisms, including the use of “artificial
        intelligence, algorithms, automated systems, or other
        technology-based selection procedures
        “and
        arbitration agreementsthat impact
        employees’ EEO rights.

      • The contractor’s most recent assessment of personnel
        processes, which must include a description of the assessment, any
        impediments to equal employment opportunity identified through the
        assessment, and any actions taken, including modifications made or
        new processes added, as a result of the assessment.

The OFCCP estimated the average time (or burden) for complying
with the recordkeeping requirements associated with the amended
scheduling letter is 97.6 hours per establishment and 39 hours for
responding to each scheduling letter. Total estimated burden per
establishment is approximately $7,400. Given past experience, this
estimate does not reflect the reality for most contractors,
particularly those with dozens of AAPs and a centralized compliance
function.

Contractors have until January 20, 2023 to
submit comments to the proposed changes to the scheduling letter
and itemized listing.

Footnote

1. The proposed Scheduling Letter refers to
“AAPs” only. But, its proposed changes likely apply to
FAAPs as well.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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