OFCCP Week In Review: February 19, 2018

If enacted, the OFCCP/USDOL/White House Budget for FY2019 proposes:

• $91.1M “Total, Estimated Obligations.” This is down $12,667,000 (12.3%) from the $103,767,000 for FY2018.

  Context: Last Year = FY2018 (October 1, 2017 – September 30, 2018):

  • The White House had proposed $88M (-16.5%). See OFCCP Week in Review: May 30, 2017.
  • The House had proposed $94.5M (-10.2%). See OFCCP Week in Review: July 24, 2017.
  • The Senate had proposed $103M (-1.4%). See OFCCP Week in Review: September 11, 2017.
  • There is still no Budget for FY2018. The OFCCP is operating on a “Continuing Resolution” which pays the OFCCP FY2017 Budget until an FY2018 Budget deal is struck. See OFCCP Week in Review: February 12, 2018.

Note 1: A debate is in progress in The Congress as to how slowly to “let the air out of the tires.”

Note 2: It is likely the House and Senate will increase OFCCP’s budget from The White House’s FY2019 proposal even while reducing it from OFCCP’s current FY2018 budget.

• 450 employees (down 75 employees (14.2%) from currently authorized 525 employees, nationwide: 521 as of February 2018).

  Context: OFCCP historical staffing levels as of the end of prior Fiscal Years:

  • 2009 = 585
  • 2010 = 788
  • 2011 = 775
  • 2012 = 755
  • 2013 = 729
  • 2014 = 683
  • 2015 = 621
  • 2016 = 615
  • 2017 = 556
• 45% fewer travel funds (down from $900,000/yr. to $500,000/yr., foreshadowing fewer and shorter on-site audits coming if this budget comes to fruition).
• Two major OFCCP Priorities for FY2019:
  1. Systemic Investigations. “Focus on streamlined high-impact systemic compliance evaluations that make efficient use of OFCCP resources and minimize burden on complying employers, and continue its focus on large federal and federally-assisted mega construction projects that have the potential to employ large numbers of diverse workers.”
     • • There is no special call-out for compensation investigations, but noted only a 3% uptick in FY2017 from FY2016 in resolving alleged “systemic pay discrimination” and promising in FY2019 “continued improvement in the percent and quality of systemic pay discrimination investigations.”

     Note 1: OFCCP reported three salary-related conciliation agreement settlements in FY2016 (nationwide) and then in the next year it quietly revised those numbers upward and reported 15 and then 18 salary-related settlements for FY2016 (of which only two were reportedly “systemic” in nature). In FY2017 OFCCP reported 17 salary-related settlements nationwide (one less than in FY2016)

     Note 2: There is no sign in the OFCCP’s FY2019 budget of relief from the OFCCP’s recent audit technique of “Deep Dredge”: i.e., detailed and burdensome audits lasting typically for years, but few of them in number. Rather, OFCCP’s FY2019 Budget proposal specifically reaffirms “Deep Dredge,” for the moment, even while that audit technique is under review. However, ameliorating the burden of Deep Dredge to the Government Contractor community as a whole, albeit NOT to the individual Contractors bearing the brunt of these audits, is that the OFCCP is now starting only approximately 60 audits/month nationwide. Compare to 500/month in the second term Bush (the son), 400/month in the first term Obama, 300/month in the second term Obama and about 90/month in the first year of the Trump Presidency, before the current Trump political appointees arrived at the OFCCP.

  2. Technical Assistance for Covered Government Contractors. “Significantly expanding contractor compliance assistance, contractor training, and education, and providing meaningful incentives that encourage voluntary compliance and contractor recognition programs that highlight best practices related to achieving compliance.”
     1. Seven new and ambitious OFCCP initiatives from Team Trump:
        1. 1. Focus on Apprenticeship Programs. Encourage, in FY2019, contractors to develop or participate in apprenticeship programs to enhance equal employment opportunity (See OFCCP Week in Review: October 16, 2017);
           2. Train Compliance Officers. The OFCCP plans to seek during FY2019 third-party accredited certification (not training just yet) of a compliance officer training program. This program is presumably to be launched in FY2020 or FY2021 since training accreditations take a year or longer to obtain, are 6-7 figure budget busters, and no funds are earmarked in the FY2019 budget to purchase such accredited certifications;
           3. Regional Contractor Training Program. Deployment in FY2019 of this FY2018 initiative which “incentivizes learning and supports voluntary contractor compliance” and is expected to “benefit 1,500 to 3,000 contractors annually;”
           4. Study How to Produce Quality Investigators. As a companion piece to its third-party training certification (#2 above), the OFCCP will also begin to study in FY2019 “the impact of its training on compliance officer behaviors” to “determine the best indicators of quality and consistency when conducting a quality audit,” and “determine if deficiencies in closed cases that undergo a quality audit decrease after compliance officers receive training.” However, there are no training funds earmarked in the FY2019 budget, so this appears to be a plan for an eventual study program to be deployed in later years;
           5. Return, with a Few Twists, the Contractor Recognition Programs begun in the Reagan Administration and Discontinued in the Obama Administration.
              • Planned for launch in FY2019.
              • “This program would seek to provide contractors an opportunity to submit applications for recognition for best or model overall compliance programs [Editorial Note: The OFCCP intends to identify multiple recipients in this category], best programs for disability employment practices under Section 503, and best programs for veterans under VEVRAA.”
              • OFCCP would identify recognition recipients in each category and for “small, medium and large size contractor establishments” (emphasis added).
              • Best overall program recipients would be “granted a one-time exemption from compliance evaluations for up to (emphasis added) a five-year period.”
              • Recognition recipients would have to commit “to working with OFCCP to develop and/or participate in delivering contractor training and education, mentoring their peers on how to achieve their level of success, and providing input into the development of compliance assistance material for a specific period of time;”
           6. Launch a “Contractor Online Community of Practice (COP).” Planned for later this year, this is proposed “as a place where federal contractors come together to learn, share and collaborate with each, and build solutions to common OFCCP compliance problems and challenges;”
           7. Reorganize the OFCCP’s Offices. While being very discreet and circumspect, OFCCP’s proposed FY2019 Budget foreshadows the beginning of a coming (and long overdue) major reorganization of OFCCP’s 50+ District and Area Offices given that:
              • Almost all District Offices are now approximately half empty due to attrition and loss of budgeted positions.
              • The Government Accounting Office in 2016 (See OFCCP Week in Review September 26, 2016) recommended a physical reorganization of OFCCP’s District Offices given the recent reality that OFCCP rarely goes onsite any longer and thus undercuts the former need for numerous local offices built during an era during which OFCCP went onsite in 100 out of 100 OFCCP audits.
              • The Senate Appropriations Committee in 2017 (See OFCCP Week in Review September 11, 2017) directed OFCCP to report to it on the agency’s plans to “right size” the agency and close offices in light of the agency’s now shrunken budget and employee head count.

        No implementation date announced just yet, but it appears that this reorganization will occur over a period of Fiscal Years beginning at the end of FY2019 in tandem with an ongoing unannounced hiring freeze within OFCCP.

        The current unpublicized OFCCP plan appears to be to gradually increase resources in the Northeast, where covered Government Contractors are more heavily concentrated, while establishing “Skilled Regional Centers” (“SRCs”) (more than just the two the Obama Administration had envisioned and had hoped to establish in New York and San Francisco) “staffed with highly skilled and specialized compliance officers,” and to then begin to close OFCCP’s District and Area offices as the OFCCP relies increasingly on the SRCs to conduct audits. Because there is no earmarked funding in the FY2019 budget to create and stand-up the SRCs (earlier budgets had sought about $2M), it appears that operational implementation of the first SRC would occur not earlier than FY2020 while planning went forward in FY2019 to use FY2020 funds.

For a recap of the Plan, see OFCCP Week in Review December 11, 2018.

For a recap of the Program, see OFCCP Week in Review February 5, 2018.