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The U.S. Department of Labor’s Office of Federal Contract
Compliance Programs (OFCCP) has been issuing policies suggesting
more aggressive tactics as well as more pervasive monitoring of
federal contractors and subcontractors. Here are four things that
federal contractors should know.
1. The affirmative action verification deadline is next week
– June 30, 2022
Supply and service contractors and subcontractors for the
federal government who meet the designated jurisdictional
thresholds for creating Affirmative Action Plans (AAP) must certify
that they have developed and maintained their plan by June 30,
2022. Federal contractors can register via the OFCCP’s online
Contractor Portal. New contractors have 120
days to develop their AAPs and must register and certify compliance
within 90 days of developing their AAP. After the initial
certification year, the OFCCP will set a date by which existing
contractors must renew their annual certification. If you have not
yet certified your compliance or prepared an AAP, you should do so
now.
2. OFCCP released the names of federal contractors on its audit
list
OFCCP published a new Corporate Scheduling Announcement List for Supply
& Service Contractors for fiscal year 2022. The new list
includes 400 federal contractors and, for the first time in several
years, subcontractors. In another retreat from prior practice, the
new list includes numerous employers with 49 or fewer employees. If
your company is identified, or you received a Scheduling Letter,
you should contact legal counsel to begin preparing to
appropriately respond. Importantly, as discussed next, the
extensions that were routinely granted for responses have now been
rescinded.
3. OFCCP signaled that it will impose tighter timelines and may
take a more aggressive stance during audits
On March 31, 2022, OFCCP issued Directive 2022-02, Effective Compliance
Evaluations and Enforcement. The directive repeals four Trump-era
directives that gave contractors more notice of OFCCP
investigations and more transparency into how the investigations
were conducted and the results derived. The new directive imposes a
more stringent set of rules. Here are some key changes associated
with Directive 2022-02:
- The 45-day delay between OFCCP publishing its scheduling list
for contractors and auditing those contractors is rescinded. As a
result, the entities identified on the scheduling list mentioned
above may be subject to audits immediately. - The automatic 30-day extension for contractors to produce
whatever data is initially requested by the agency is repealed,
except in “extraordinary circumstances,” which is
narrowly defined. - It is up to the discretion of the investigator whether to share
source data so that contractors can assess OFCCP’s statistical
findings and instruction. - OFCCP may request personal contact information for former
employees, including Social Security Numbers. In addition, it
asserts that the employer has no right to be present for interviews
of former employees.
Contractors should be prepared for tougher timelines and more
scrutiny from the OFCCP during audits, which makes preparation all
the more critical.
4. OFCCP may seek a contractor’s privileged pay audits
Contractors have been required to conduct reviews of their
compensation practices for many years. Indeed, affirmative action
regulations require that federal contractors evaluate their
compensation systems to determine whether there are any gender-,
race-, or ethnicity-based disparities. During compliance
evaluations, OFCCP may seek the results of internal pay analysis.
If the analysis was subject to the attorney-client privilege,
contractors have typically objected on those grounds. In Directive 2022-01, OFCCP explains that although
federal contractors retain counsel to assist with the preparation
of the pay audit, federal contractors must make available to OFCCP
documentation of their compliance. Consequently, contractors cannot
withhold pay audits by invoking attorney-client privilege or work
product protections. Contractors should confer with counsel on a
strategy for responding to requests for privileged analyses and for
strategy when performing such analyses in the future.
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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