On December 22, 2020, the Office of Federal Contract Compliance Programs (“OFCCP”) sent two proposed audit Scheduling Letters to the Office of Management and Budget (“OMB”) seeking OMB’s approval for OFCCP to use them to launch “focused reviews on promotion” and “focused reviews on disability and religious accommodations.” But neither of these two new audits is in fact what the name states: rather, both are full scope compliance reviews also covering Executive Order 11246 AAP compliance, failure to hire and promote systemic discrimination analyses, involuntary termination analyses, full-on compensation analyses and Section 503 and VEVRAA AAP compliance and Section 503 goals.
What OFCCP has done here is to simply repeat its regular full scale Compliance Review audit Scheduling Letter and attached Itemized Listing and to then heavily trim the Itemized Listing attached to regular audit Scheduling Letters to tailor it to each of the two new kinds of audits as follows:
“Focused reviews on promotion”: The Itemized Listing accompanying this audit Scheduling Letter, if OMB approves it, would cherry-pick only 11 of the 22 Items OFCCP collects pursuant to its regular Compliance Review Itemized Listing (i.e., all six of the Items on the Executive Order 11246 section of the Itemized Listing; and Items 15 through 19, inclusive, of the Support Data section of OFCCP’s regular Compliance Review Itemized Listing, and NO ITEMS from the Section 503 or the VEVRAA portion of the regular Compliance Review Itemized Listing).
“Focused reviews on disability and religious accommodations”: The Itemized Listing accompanying this audit Scheduling Letter, if OMB approves it, cherry-picks only eight of the 22 Items appearing on OFCCP’s regular Compliance Review Itemized Listing (Item 10 (one of the four Section 503 Items) and Items 16 through 22 (all but Item 15 (EEO-1s) of the “Support Data” Items), and NONE of the VEVRAA-related Items).
It is significant to note the four overlap data requests from the Itemized Listings attached to the two new focused review letters and the Itemized Listing attached to OFCCP’s regular audit Scheduling Letter (i.e., the Items OFCCP thinks are REALLY important to obtain in every kind of OFCCP audit), which include:
- Item 16 (on the regular OFCCP Compliance Review Itemized Listing) [Collective Bargaining Agreements]
- Item 17 [Information on your EO 11246 affirmative action goals]
- Item 18 [Data on your employment activity (applicants, hires, promotions, and terminations]
- Item 19 [Employee level compensation]
The way to think about these coming two new audits is that they mimic regular compliance reviews, but with a slightly different audit process and an added special focus. First, OFCCP Director Craig Leen has stated publicly that these two new kinds of OFCCP audits will consist of only “Desk Audit” and an “On-site” phases, and NOT the traditional three-phase audit approach indigenous to regular audit Scheduling letters of Supply and Service contractors (which include a third, “Off-Site Analysis” phase). Second, these “focused reviews on promotion” AND “focused reviews on accommodations” will NOT focus JUST ON “promotions” or focus JUST on “accommodations.” And, oddly, there are no data requests in the two new audit Scheduling Letters seeking either promotions or accommodations documents or information. Rather, contractors will apparently only know it is a focused review on promotions or a focused review on accommodations in two ways, because:
- the audit Scheduling Letter will so state, and
- presumably, OFCCP will seek a standardized battery of promotions and accommodations documents and information during the course of the on-site phase of the focused review audits.
Note: During the Desk Audit, OFCCP is not permitted to obtain additional information or documents beyond those documents described in the audit Scheduling Letter or its attached Itemized Listing if OFCCP makes the same or similar document or information request of contractors 10 or more times. That is the point of OMB’s approval of the audit Scheduling Letter: OMB will approve OFCCP’s standardized document collection for these two kinds of promotion reviews. However, if OFCCP wants to use additional standardized document or information requests, orally or in writing, (and wants to use them 10 or more times), OFCCP must come on-site to collect those documents relevant and pertinent to the audit in progress pursuant to 41 CFR Section 60-1.43. As a further Note, please know that 41 CFR Section 60-1.3 does not authorize OFCCP to undertake interviews, either on-site or off-site. If a contractor allows interviews of its employees or managers, it does so out of its discretion and not because OFCCP has a legal right to force an interview.
OFCCP is referring to these new audits in lower case (not first letter caps): i.e., focused promotion review or focused accommodation review…NOT Promotion Focused Review. Also, OFCCP places the name of the type of review after the phrase “focused review”: i.e., “focused review on promotion” or “focused review on disability and religious accommodations” …NOT promotions focused review. And, finally, no hyphens: “focused review on promotions” …NOT focused-review on promotions.
OFCCP Director Craig Leen first announced to the National Industry Liaison Group (“NILG”) that OFCCP would begin conducting focused reviews on promotion and focused reviews on accommodations of covered federal contractors. Then, OFCCP announced in September 2020 its latest Corporate Scheduling Announcement List (CSAL), including the names and locations of the 500 federal contractors OFCCP had selected for focused reviews on promotion and the 500 federal contractors OFCCP had also selected for focused reviews on accommodations.
Some Bad News
With the publication of these two new audit Scheduling Letter drafts, Director Leen has also stated that he sees these two new forms of focused reviews to be in search of “qualitative” and “pipeline” data. Despite the heavy emphases in the proposed Itemized Listings applicable to both forms of these new focused reviews, OFCCP Director Leen does not expect OFCCP audits to revolve around “quantitative” measures. We will see how long that view lasts in the Biden OFCCP (since most contractors expect the Biden OFCCP to revert to the “quantitative” “gotcha” numbers games which were the bane of contractors during the Obama OFCCP.
Some Good News: OFCCP has also made a quiet statement that it is mindful of the need to homogenize its 12 currently authorized investigative tools by adopting a common center core of investigative analyses. This new focused review architecture is reminiscent of the regular OFCCP audit Scheduling Letter while adding an emphasis area to each kind of audit. This is the audit architecture OFCCP adopted in 1991 when it created its first audit tool beyond the agency’s regular Compliance Review audit Scheduling Letter to allow for the introduction of “Glass Ceiling” audits (or more formally known as Corporate Management Compliance Evaluations). OFCCP used the regular audit Scheduling Letter for Glass Ceiling audits, but announced it would spend some special attention on promotions issues among mid-level and senior-level positions and on compensation paid these higher-level employees. The more things change, the more they stay the same.
With the issuance of these proposed audit Scheduling Letters for OMB approval, OFCCP is slowly, step-by-step, educating federal contractors about what they need to know about these new focused reviews. Unfortunately, the proposed scheduling letters provide no greater insight as to how these focused reviews may differ from regular OFCCP Compliance Reviews after OFCCP’s Desk Audit. Nonetheless, federal contractors may wish to review other written materials OFCCP has published on its website landing pages discussing focused reviews on accommodation and promotion to help anticipate what OFCCP may do after its Desk Audit.
We have no news about training materials for OFCCP investigators or training classes for investigators. OFCCP is currently assessing its 2021 budget which it (and all federal agencies) just received this week as part of the second Stimulus Package. The budget will answer the question whether there are funds sufficient to expect OFCCP Compliance Officers to be trained in these audits…and when.
The Starting Gun
There is also no word when OMB will allow OFCCP to start these audits, since there is no deadline operating on OMB to review/approve OFCCP’s two new focused review audit Scheduling Letters. Other than that, it will take a month or so for OFCCP District Offices to launch the first of these letters once OMB approves them, all 1,000 of these audits will start by giving contractors under audit 30 days to prepare their documents responsive to the focused review audit Scheduling Letters.
Start Your Response Preparation Now
You now know what’s coming, so you could start NOW to retrieve, organize and quality control check almost all of the needed documents responsive to the Itemized Listings. We say “almost all” because any needed “6-month updates” (because you may be 6 months or more into your AAP year at the time your company receives OFCCP’s focused review audit Scheduling Letter) may have to wait until your company receives the Scheduling Letter…unless you are already 6 months or more into your AAP year, or knocking on that door. Nothing holds you back on any document responsive to either focused review Itemized Listing in that instance.
Go for it! Have fun! Be proud of your data.
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.
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