In April 2019, OFCCP Proposed six Scheduling Letters. Four of these were new altogether:
- Section 503 Focused Review (which previously went live in February 2019)
- VEVRAA Focused Review
- Construction (Direct Contract)
- Construction (Federally Assisted)
…and two were revisions of existing Supply & Service audit Scheduling Letters:
- Compliance Evaluation
- Compliance Check
Now, a year later, the Office of Management and Budget (OMB) has reviewed the comments, made changes, and finalized the six Letters. All six will remain active for the standard 3-year period through April 2023. OMB holds the official Letters on three websites. One website page with the four Supply & Service Letters, another with the Direct Construction Letter, and another for the Federally Assisted Construction Letter. We have parsed them out below for quick reference.
We broke down the proposals in one of our meatiest WIRs of the year 2019. Many of the suggested changes left us, and our Members, with severe heartburn. As such, DirectEmployers conducted a Member survey, compiled the extensive comments and concerns, and submitted DE Comments to OFCCP for review on behalf of DE Members. We are very pleased to report that OFCCP heard the one collective voice of DE Members, and accepted all of the significant changes Members asked DE to submit to OFCCP regarding its proposed audit Scheduling Letters.
Scheduling Letter #1 (Compliance Evaluations for Supply & Service Contractors)
The OFCCP audit “Scheduling Letter” for Supply & Service contractors is a multi-faceted Letter the agency uses for:
- “Regular” Compliance Evaluations
- Functional Affirmative Action Program Compliance Reviews (FAAPs)
- Corporate Management Compliance Evaluations (CMCEs i.e., “Glass Ceiling Reviews” of corporate headquarter offices)
Of particular concern were the proposed new requests for contractors to provide:
- A list of the Contractor’s three largest subcontractors based on contract value;
- Results of the most recent analysis of the compensation system(s) to determine whether there are gender-, race-, or ethnicity-based disparities.
Contractors may sigh in relief as neither of these proposals ever passed “Go,” as you can see from the linked FINAL OFCCP audit Scheduling Letter for Supply & Service contractors and attached 22 paragraph Itemized Listing.
Main body of the Scheduling Letter:
- No Significant changes to the original OFCCP Letter
- See DE Comment Letter #1, #3
|Executive Order 11246||Items 1-6
|All proposals rejected – no changes to the original OFCCP audit Scheduling Letter
|Section 503||Items 7-10||All proposals rejected – no changes to the original OFCCP audit Scheduling Letter
|VEVRAA||Items 11-14||All proposals rejected – no changes to the original OFCCP audit Scheduling Letter
|Support Data||Items 15-22||Minimal revisions to the original OFCCP Itemized Listing:
Note: Same change and requirement for the Focused Reviews.
Note: Same change and requirement for the Focused Reviews.
DE Comments with Final Outcome
|1||Scheduling Letter||“A list of your three largest subcontracts based on contract value, excluding those expiring within six months of receipt of this letter”||Inability or Difficult to Provide a List of Subcontracts||Success!
|2||Scheduling Letter||“Results of the most recent analysis of the compensation system(s) to determine whether there are gender-, race-, or ethnicity-based disparities as explained in 41 CFR § 60-2.17(b)(3).”||The Requested Compensation Analysis May Not Be Documented or It May Be Privileged||Success!
|3||Scheduling Letter||“All information must be submitted in an electronic format.”||Electronic Submission of Data Poses Security Issues||Success!
Final changed the Proposal to: “We encourage you to submit your information in an electronic format to reduce the amount of time it takes to complete our evaluation…”
|4||Scheduling Letter||The estimated public reporting burden for OFCCP’s proposed new Scheduling Letter was 29 hours, including the time for evaluating instructions, searching existing data sources, gathering and maintaining the data needed, and completing and evaluating the collection of information||It will take significantly longer than 29 hours for contractors to compile the Requisite Data.||Final changed the Proposal (lower) to 28 hours. However, the majority of the additional requirements were removed.
The original Scheduling Letter the OFCCP has been using an estimated 27.9 hours. Thus, OFCCP has added an additional .1 of an hour for the changes from the existing OFCCP audit Scheduling Letter.
|5||Focused Reviews||#8 Applicant and employee level information on self-identification maintained for individuals with a disability, as required by 41 CFR § 60-741.42(e).
||Creating a unique identifier as required by OFCCP’s 503 & VEVRAA Focused Reviews scheduling letters will be burdensome and costly||Success!
Proposal Rejected, entire item removed.
Supply & Service Compliance Check PDF
|Main Letter||The end of paragraph one, which outlines “other investigative procedures,” now removes the specification that Focused Reviews “are on-site reviews limited to one or more organizational components or employment practices.”
Note: This is not necessarily related to Compliance Checks, but interesting nonetheless that the description of Focused Reviews has now deleted this specification – perhaps indicating Focused Reviews may not be on-site in future instances?
|Items 1-3||#1 – (AAP results for the previous year)
|#2 – (Example of job advertisements, including listings with state employment services)
|#3 – (Examples of accommodations for IWD)
New Scheduling Letters
OFCCP has been conducting Focused Reviews for Section 503 (throughout 2019) and will soon start first-ever VEVRAA Focused Reviews (beginning later this calendar year). The Section 503 Letter used throughout 2019 included a list of 12 items to submit for review. The Proposed Letters included significant expansions by way of a new item 11 (applicant & employee data) and item 12 (compensation data). In addition, as outlined in DE’s Comments, the inclusion of a request for additional self-identification information would have been extremely burdensome, if even possible at all. This was a proposed new #8: “Applicant and employee level information on self-identification maintained for individuals with a disability, as required by 41 CFR §60-741.42(e).
This review went from 12 to 9 items. Items no longer required to submit for a Section 503 Focused Review include:
- (Formerly #3) “The formation of job groups (covering all jobs) consistent with criteria given in 41 CFR § 60-2.12;”
- (Formerly #5) “Documentation of all actions taken to comply with the audit and reporting system requirements described in 41 CFR § 60-741.44(h);”
- (Formerly #8) “Copies of your Employer Information Report EEO-1 (Standard Form 100 Rev.) for the last three years;”
However, although OFCCP removed item #5 (41 CFR § 60-741.44(h) self-audit documentation) from its new Section 503 Focused Review audit Scheduling Letter, keep in mind that the self-audit provisions of .44(h) are a “required ingredient” of #2 of the new OFCCP Section 503 Focused Review audit Scheduling Letter which requests your Section 503 AAP: “A copy of your current Section 503 AAP prepared in accordance with the requirements of 41 CFR §§ 60-741.40 through 60-741.47.”
Additional changes: See the minimal changes to the assessments (no specific date required) as outlined in the Scheduling Letter’s revisions of #21 and #22.
The only significant difference between the new Section 503 Focused Review audit Scheduling Letter and the VEVRAA Focused Review audit Scheduling Letter is paragraph #5, which reflects the different types of data each Program requires to be collected.
Section 503 #5: “The utilization analysis evaluating the representation of individuals with disabilities in each job group, or, if appropriate, evaluating the representation of individuals with disabilities in the workforce as a whole, as provided in 41 CFR § 60-741.45. If you are six months or more into your current AAP year on the date you receive this Letter, please also submit information that reflects current year progress.”
VEVRAA #5: “Documentation of the hiring benchmark adopted, including the methodology used to establish it if using the five factors described in § 60-300.45(b)(2).”
Construction Contractor OFCCP Compliance Check Audit Scheduling Letters
OFCCP has now published two Construction Contractor Compliance Check audit Scheduling Letters:
- One for so-called “direct” contractors (meaning those contractors signing a “prime” covered federal Government contract)
- A similar, but separate Construction Contractor Compliance Check audit Scheduling Letter for those contractors which are covered ONLY by virtue of a “federally assisted” contract the Contractor has signed (i.e., federal construction “grant” money)
NOTE: One of the primary differences between the two kinds of federal construction contracts is that “direct” contractors are also covered by Section 503 and potentially also by VEVRAA (if the contract is sufficiently large in dollar value). See this OFCCP FAQ for more details. Accordingly, OFCCP created the “direct” audit Scheduling Letter first, and then used it as a template to draft the “federally assisted” Letter by simply deleting references to Section 503 and VEVRAA.
OFCCP Proposed, and we reported back in December 2019, a Scheduling Letter for Direct Construction Contractors. The Proposal included an attachment known as an Itemized Listing, which cataloged eight deliverables. The final approved Letter removed number seven (documentation of data collection analysis) and number eight (documentation of adopted hiring benchmark), requiring Contractors to include only:
- “Examples of (emphasis added) personnel records that list construction trade employment activity (applicants, hires, promotions, layoffs, recalls, voluntary terminations, and involuntary terminations), including the name or ID number, job classification, gender, race and/or ethnic designation for each employee or applicant (41 CFR § 60-1.12(a) and (c)).”
- “Examples of (emphasis added) payroll records for some construction trade employees working in (as appropriate insert either 1) the name(s) of Standard Metropolitan Statistical Area(s) (SMSA) or 2) the name(s) of Non-SMSA) which is comprised of the following county(ies) and/or county equivalents: (insert all applicable county(ies) and/or county equivalents) during the specified review period. The payroll records should be submitted by project and include each employee’s name or ID number, gender, race/ethnicity, hire date, trade(s), total hours worked in each trade and overtime hours worked in each trade (hours could include the sum of regular and overtime hours worked, with overtime hours listed separately, or regular and overtime hours each listed separately), wage rate(s) for each trade, apprenticeship status, and employment type (e.g., full-time, part-time, temporary, contract, per diem, day labor) (41 CFR § 60-1.12(a) and (c)).”
- “Examples of (emphasis added) job advertisements and postings (41 CFR § 60-1.12(a), § 60-300.80, and § 60-741.80).”
- “Examples of (emphasis added) accommodation requests received (e.g., accommodation requests for pregnancy, childbirth, or related medical conditions, and for religious observances and practices), if any (41 CFR § 60-1.12(a), § 60-300.80 and § 60-741.80).”
- “A copy of your current Section 503 AAP prepared in accordance with the requirements of 41 CFR § 60-741.40 through § 60-741.47.” (“Direct” construction contractors, only)
- “A copy of your current VEVRAA AAP prepared in accordance with the requirements of 41 CFR § 60-300.40 through § 60-300.45.” (“Direct” construction contractors, only)
The OFCCP Compliance Check audit Scheduling Letter for Federally Assisted Construction Contractors requires the submission of the same itemized numbers one through four above, but omits any documents or information related to either Section 503 or VEVRAA (i.e., #5 & #6 above seeking AAPs for 503 and VEVRAA).
The Bottom Line
We are chalking this round up as a win for the Contractor community and crediting OFCCP and OMB with listening to the sincere concerns of DE Members. All in all, no drastic or overly burdensome new requirements have hit Supply and Services contractors, and OFCCP’s audit gating-information requests are now far less demanding than OFCCP had originally proposed across all six of the Letters.