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

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.

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