OFCCP Week In Review: June 10, 2019

The DE OFCCP Week in Review (WIR) is a simple, fast and direct summary of relevant happenings in the OFCCP regulatory environment, authored by experts John C. Fox, Candee Chambers and Jennifer Polcer. In today’s edition, they discuss:

• OFCCP Released First Opinion Letter
• May Employment Situation
• Compliance Evaluation “Audit” Update
• EEO-1 Component 2 Tracker

Thursday, May 23, 2019: OFCCP Released First Opinion Letter

OFCCP quietly released its first Opinion Letter. Last December Directive 2019-03 introduced the concept of Opinion Letters to OFCCP. Widely used by the Wage and Hour Division, Opinion Letters provide guidance on situations or circumstances that may be unclear to navigate per existing regulations.

The Question

Whether a college’s status as a conduit for Pell Grants makes it a covered Government contractor for the purposes of Executive Order 11246, as amended, (“E.O. 11246”), Section 503 of the Rehabilitation Act of 1973, as amended, (“Section 503”), 29 U.S.C. § 793, and/or the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended, (“VEVRAA”), 38 U.S.C. § 4212.

The Opinion

“Due to their separate statutory definitions, grants do not constitute federal procurement contracts. See University of Rochester v. Hartman, 618 F.2d 170, 176 (2nd Cir. 1980) (holding that a benefit claim was not compensable as a government contract under the Defense Base Act as the Government did not solicit the work nor did it “retain close control over the objectives, methods, or timetable of the project”). As E.O. 11246 applies only to government contracts, defined as “any agreement, or modification of an agreement, between any contracting agency and any person for the purchase, sale or use of personal property or non-personal services[,]” grants, as transfers that do not acquire “property or services for the direct benefit of the United States government” do not constitute federal procurement contracts and therefore are not sufficient to invoke jurisdiction under OFCCP laws and regulations over Non-Construction contractors. See 41 C.F.R. § 60-1.3.

Pell Grants involve the government transferring a sum of value to a recipient in order to further “a public purpose of support or stimulation[,]” in this case, that of a percentage of the recipient’s education. See 20 U.S.C. § 1070(b)(1); 31 U.S.C. §6304(1). They do not constitute an agreement “for the purchase, sale, or use of personal property or non-personal services,” that would qualify for contractor status. Therefore, solely serving as a conduit for Pell Grants does not render a post-secondary higher education institution a covered federal contractor subject to E.O. 11246, Section 503, or VEVRAA.”

Friday, June 7, 2019: May Employment Situation

The release of May’s Employment Situation shows unemployment numbers are relatively flat from last month. U.S. Secretary of Labor Alexander Acosta spotlighted that:

“For 15 months in a row, the unemployment rate has been at or below 4.0% as May’s unemployment rate remained at 3.6%, the lowest rate since 1969. Hispanic-Americans and Americans with disabilities maintained their series low unemployment rates at 4.2% and 6.3%, respectively.”

Friday, June 7, 2019: Compliance Evaluation “Audit” Update

We have received news that some Contractors have begun to receive Audit Scheduling Letters for Compliance Checks about which OFCCP had earlier alerted them via publication of the OFCCP CSAL. Employers, if you have one or more plants or offices on the recent OFCCP CSAL for a Compliance Check for which OFCCP has not yet sent you an audit Scheduling Letter, now is a good time to inform leadership (especially if you have not yet alerted your CEO or the person regularly receiving mail), “it’s coming!”

Additional Details

• See our breakdown of the March 25, 2019, “CSAL”(Corporate Scheduling Announcement List).

The Indy ILG update informed us that the expectation was after closing audits from previous CSALs, Compliance Checks would be first on the new CSAL.

EEO-1 Component 2 Tracker

In light of numerous requests from Members for additional details on the still continuing EEO-1 Component 2 Hours Worked and Pay Data saga, we have decided to dedicate the last section each week in the WIR for updates (when available) and maintain a catalog of events for quick reference.

This week: The EEOC website now includes the following helpdesk information. However, the helpdesk is not scheduled to be fully operational until June 17, 2019

E-mail:  EEOCcompdata@norc.org
Toll-Free: (877) 324-6214

Reminder: DE Members can access a full “E-Book” catalog of all Week-In-Review stories in the Connect Community.

THIS COLUMN IS MEANT TO ASSIST IN A GENERAL UNDERSTANDING OF THE CURRENT LAW AND PRACTICE RELATING TO OFCCP. IT IS NOT TO BE REGARDED AS LEGAL ADVICE. COMPANIES OR INDIVIDUALS WITH PARTICULAR QUESTIONS SHOULD SEEK ADVICE OF COUNSEL.