OFCCP’s Year in Review
Recently, the Office of Federal Contract Compliance Programs (OFCCP) released OFCCP’s Year in Review. Despite the ongoing COVID-19 pandemic and the activities surrounding the presidential election, the agency continued to move forward with reviews, initiatives, rulemaking, and outreach programs. These activities revealed larger trends that made clear some of OFCCP’s priorities. Though these priorities may change under a Biden Administration, it’s worth looking at the actions the agency took last year.
In OFCCP’s 2020 Year in Review, the agency’s divides its accomplishments into five areas:
At the onset of the Trump Administration, many predicted that OFCCP would take a less aggressive posture in enforcement. While the agency has attempted to be more collaborative and consistent during the course of reviews, the agency has been involved in significant enforcement activities. In fact, OFCCP secured more than $35 million in monetary remedies in fiscal year (FY) 2020, which is the second-highest annual amount in the agency’s history. (The highest amount came in FY 2019.) These high numbers are due in large part to the agency’s early resolution procedures (ERP), which were implemented in early FY 2019. (See below for more on ERP.)
OFCCP also sought to expand its enforcement through compliance evaluations focused on specific aspects of the federal affirmative action laws in order to create a “more streamlined version of enforcement”. This expansion began with reviews focused on the implementation of the regulations regarding with individuals with disabilities. These reviews began in FY 2019. In late FY 2019 and early FY 2020, the agency announced three additional types of focused reviews: reviews focused on the classes of veterans protected by the affirmative action law, reviews focused on religious and disability accommodations, and reviews focused on promotions.
It is clear the agency under Director Craig Leen intended to make focused reviews a major part of its enforcement activities. According to OFCCP’s Year in Review, nearly 80% of the compliance reviews included in OFCCP’s Corporate Scheduling Announcement List (CSAL) are focused reviews. However, under new leadership, it is not clear whether OFCCP will continue its use of focused reviews once it exhausts its current scheduling lists.
The final item OFCCP lists in this section of its Year in Review is an updated Memorandum of Understanding (MOU) between OFCCP, the Equal Employment Opportunity Commission (EEOC) and the Department of Justice’s Civil Rights Division (CRD). The stated purpose of this MOU is to “strengthen and streamline interagency coordination in the enforcement of EEO laws.” However, some concern was raised over language in the MOU that indicated OFCCP would be responsible for taking on complaints that are filed with both EEOC and OFCCP. This could be significant for several reasons. EEOC has more resources to investigate complaints and traditionally has been the primary investigator of individual complaints. Routing “dual-filed” complaints to OFCCP instead of EEOC could have a significant impact on victims of discrimination and could exhaust OFCCP’s limited resources. It is likely that OFCCP, DOJ, and EEOC will change the terms of the MOU under a Biden administration in order to avoid these problems.
During FY 2020, OFCCP published three final set of regulations (or “rules” as they are formally known). These rules are as follows:
- Nondiscrimination Obligations of Federal Contractors and Subcontractors: Procedures to Resolve Potential Employment Discrimination
- Implementing Legal Requirements Regarding the Equal Opportunity Clause’s Religious Exemption
- Affirmative Action and Non Discrimination Obligations of Federal Contractors and Subcontractors: TRICARE Providers
The rule regarding TRICARE is relatively limited in scope. For a number of years, healthcare providers that accepted TRICARE (which is a health insurance program for people in or formerly in the military) were unsure if doing so subjected them to federal affirmative action regulations. Until 2020, OFCCP had simply agreed to a moratorium on conducting compliance reviews on healthcare providers involved in the TRICARE program. The rule promulgated in 2020 removes TRICARE providers from OFCCP’s jurisdiction.
The final rule regarding the Religious Exemption in the affirmative action regulations sought to “clarify the scope and application of Executive Order 11246’s religious exemption to make it consistent with recent legal developments.” The final rule is applicable to religious corporations, associations, educational institutions, and societies. It allows these organizations to consider religion in employment decisions. The full scope of this new rule is unclear, and the Biden administration may seek to limit the application of this rule.
Perhaps the most significant final rule from 2020 is the rule regarding procedures to resolve potential employment discrimination. This rule serves to codify the procedures that OFCCP has been using to resolve potential findings of discrimination. With this rule in effect, the agency must now issue a pre-determination notice (PDN) and subsequently issue a Notice of Violation (NOV) when the agency believes there has been discrimination. This rule also clarifies the evidentiary standards OFCCP must meet in order to issue a PDN and codifies the agency’s early resolution procedures (ERP). The final rule serves the dual purpose of creating a more consistent process and an expedited way to resolve potential findings of discrimination.
Transparency in the agency’s operations and methods was a major initiative under Director Leen. In 2020, OFCCP took a number of steps to increase transparency including issuing four new directives and publishing a new Federal Contract Compliance Manual (FCCM). These actions do not have the full force of law like regulations do. However, they do direct the agency’s procedures and affect how OFCCP enforces its laws and regulations.
The agency issued the following directives aimed at increasing transparency in 2020:
- Efficiency in Compliance Evaluations Directive – this directive outlines the steps the agency will take to “expeditiously” resolve compliance reviews and remedy violations.
- Pre-Referral Mediation Program Directive – this directive establishes a mediation program that allows contractors undergoing a review in which potential discrimination has been found to use a third party to explore options of remedying these findings prior to litigation.
- Ombuds Service Supplement Directive – this directive clarifies the protocols of OFCCP’s Ombuds service, which was first announced in 2018. The Ombuds Service was created in part to address concerns about transparency.
- Certainty Directive – this directive reaffirms OFCCP’s commitment to clarity and certainty in the agency’s policies and practices. OFCCP will examine all of its policies and practices at least once a year and create a new avenue through which federal contractors and other stakeholders can request clarification regarding an agency practice, policy, or procedure.
The agency’s revised Federal Contract Compliance Manual is a 527 page document that provides OFCCP Compliance Officers with the procedural framework for conducting compliance evaluations and complaint investigations. It also provides procedural and technical guidance on compliance issues. The FCCM gives valuable insights for federal contractors regarding what OFCCP might examine during a compliance review or complaint investigation.
One of the biggest steps OFCCP has taken in recent years to enhance efficiency is closing out long-standing compliance reviews. An important tool the agency created for this purpose is the Early Resolution Procedures (ERP) program. This program provides a way for contractors who are undergoing a review in which violations have been found to forego a Predetermination Notice and Notice of Violation and move straight to conciliation. The program encourages contractors and Compliance Officers to use this conciliation process to to develop corporate-wide corrective actions. While the agency does not provide numbers specific to ERP agreements signed in FY 2020, OFCCP states that the ERP program has led to over $49 million in back pay, $6.3 million in salary adjustments, 2100 job offers, and ongoing monitoring of employer establishments with approximately 650,000 employees.
The agency also released a new Supply and Service Technical Assistance Guide (TAG), a new Construction TAG, and a new Education Institutions TAG in FY 2020. These all serve to help contractors and subcontractors understand and comply with their federal affirmative action obligations.
Finally, as part of it commitment to enhanced efficiency, OFCCP lists its ongoing support for contractors, employees, and applicants through its Help Desk, responses to public inquiries, and outreach and compliance assistance events. OFCCP conducted 683 outreach and compliance assistance events during a year in which events of these types were difficult to facilitate because of the COVID-19 pandemic. Director Leen has indicated on multiple occasions that employer outreach and education is the only way to ensure 100% contractor compliance due to the agency’s limited capacity to conduct compliance reviews.
Supported Equal Employment Opportunity
For several years, OFCCP has been involved in an initiative to connect federal contractors with college students from Historically Black Colleges and Universities. In FY 2020, it expanded this initiative to include members of the Hispanic Association of Colleges and Universities, Asian Pacific Islander American Associate of Colleges and Universities, and tribal colleges and universities. The expansion to tribal colleges and universities was also part of the agency’s Indian and Native American Employment Rights Program.
As we have previously stated, 2021 may be a time of considerable change for OFCCP. It will take time for the new Labor Secretary, presumably Boston Mayor Marty Walsh, to be confirmed to his post and to announce his priorities. It will also take time for new OFCCP Director Jenny Yang to implement measures that reflect new priorities.
There is no doubt that OFCCP under the Biden administration will make compensation issues a major part of its focus, as made clear by the selection of former EEOC Chair Yang for the OFCCP Director position. However, the agency may decide to change its methods of analyzing compensation during reviews and its approach to settling instances of pay discrimination under Director Yang.
It may take weeks or months to get a complete picture of OFCCP’s additional priorities. Some current focus areas such as compensation and advancement opportunities for women seem like obvious choices for OFCCP to continue. Others, such as religious accommodations and agency transparency, may not be as important. However, it is certain that federal contractors and subcontractors should view the change in presidential administrations as a reason to renew their efforts to meet federal affirmative action obligations.
Please note: HR Analytical Services does not typically editorialize in blog posts. Instead, our writers attempt to provide summaries and analyses to help readers understand how changes in affirmative action and equal opportunity employment affect their respective organizations. In this blog, we do provide some of our own insights in order to make predictions regarding OFCCP’s future actions and priorities.