OFCCP Week In Review: December 6, 2021

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:

• Two Rapidly Approaching Vaccine Mandate Public Comment Periods Employers and Federal Contractors Should Note
• Vaccine Mandate Litigation Recap: Vaccine Challengers 4; Biden 0
• Decision Striking Down the Federal Contractor/Subcontractor Vaccine Mandate Portends Difficulty for OFCCP to Enforce its AAP Certification Portal
• OFCCP’s AAP Verification Interface Gets Set to Open – Contractors Must Now Decide Whether to Voluntarily Comply with OFCCP’s Unenforceable “Requirement” Since the Agency Has Now “Thrown Down Its Gauntlet”
• Big Budget Bill Busts Again: Federal Government Funded Through Only February 18, 2022
• International Day of Persons with a Disability Sparks Global Movement
• Amid a Strong Economy, Another Disappointing Monthly Jobs Report as Long-Term Unemployment Remains 1.1 Million Higher Than February 2020

Tuesday, November 30, 2021: Two Rapidly Approaching Vaccine Mandate Public Comment Periods Employers and Federal Contractors Should Note

Federal Contractor Comment Period: Those members of the public who want to Comment on the federal contractor/subcontractor vaccine mandate will want to Comment to the Office of Management (“OMB”) on its proposed “Guidance” as we reported in the DirectEmployers Week in Review on November 16, 2021 discussing the White House’s “Hail Mary Pass” to OMB. (OMB is now quarterbacking the federal contractor/subcontractor vaccine mandate proposal).

OSHA ETS Comment Periods (plural: there are two public Comment periods): While the Occupational Safety and Health Administration (“OSHA”) suspended implementation of its Emergency Temporary Standard (“ETS”) OSHA seeks to make applicable to so-called “large” employers with 100 or more employees, OSHA has nonetheless NOT suspended its public Comment period. Rather, OSHA is still accepting public Comments as to its proposal (within the ETS) both as to whether to make it permanent, and/or applicable to all employers subject to OSHA jurisdiction with fewer than 100 employees.

OSHA extended the period for public Comments, first setting a due date of January 4, 2022 as to any Comment pertaining to the recordkeeping requirements OSHA proposed in the ETS for “small” employers. All public Comments as to any other aspect of the ETS (the substantive requirements of the ETS in other words) are now due by January 19, 2022.

Commenters have already submitted 98,000 Comments in response to the ETS, some of which are available for viewing (Click on “Docket Details” to see comments). Also, see our bonus blog from November 8th for a detailed breakdown of the ETS:

“OSHA Emergency Temporary Standard Mandating COVID-19 Vaccines or Testing/Masks Catches Federal Contractors in a Bind by Exempting Them from the More Generous Exceptions to the OSHA ETS”

Related Links

• OSHA’s informational website on the ETS
• The publication of the Interim Final Rule with the extension of the comment period in the Federal Register

Comment via the online portal on or before January 19, 2022, to Docket No. OSHA-2021-0007. Select “Browse Documents.” The comment button is in the first box, attached to the Rule.

For more details, please see the below Week in Review story discussing the legal status of the four vaccine mandates President Biden hopes to force.

Tuesday, November 30, 2021: Vaccine Mandate Litigation Recap: Vaccine Challengers 4; Biden 0

The Biden Administration’s efforts to mandate vaccinations against COVID-19 for the American workforce continued to meet judicial rejection this week. After the Fifth Circuit on November 12, 2021 stayed implementation of the OSHA ETS mandating vaccinations for private (so-called “large”) employers with 100 or more employees (previously discussed here), three separate courts this week granted preliminary injunctions staying implementation of both of the Biden Administration’s vaccine mandates directed at (a) federal contractors (but in only three states), and (b) healthcare workers. The Biden Administration’s vaccine mandate targeting federal employees is still in limbo: no decision yet one way or the other.

Despite the snarl of four federal courts having now enjoined three of the four Biden vaccination mandates, there are many more case decisions to come from pending Complaints in the federal courts we previously documented here and, of course, appeals. So, the country is currently still only in the middle of Round 1 of the mandated vaccine litigation. Relax. Make popcorn. Settle in for a long winter of judicial decisions ahead while the vaccine mandates applicable to the private sector are one-by-one being frozen as winter sets in on the Biden Administration’s vaccination strategy. Nonetheless, federal contractors outside of Kentucky, Ohio and Tennessee will have to vigilantly watch the litigation affecting their jurisdictions as pending cases across the country grow ever closer to being ripe for decision on expedited dockets.

And remember, while we have not catalogued them in the DE WIR, private employers sued for implementing mandatory vaccination programs are winning as Courts take a more friendly approach when the employer has exercised its business discretion to mandate workforce vaccinations. So, employers can always “go it alone.”

1. Federal Contractor/Subcontractor Vaccine Mandate Enjoined This Week:

• The case is Kentucky, et al. v. Biden, et al., Case No. 3:21-cv-00055 (E.D. Ky. November 30, 2021).
• The U.S. District Court for the Eastern District of Kentucky stayed the vaccine mandate directed towards employees of federal contractors and subcontractors. Fortunately for the Biden Administration, the scope of the court’s injunction applies only in the states of Kentucky, Ohio, and Tennessee, as well as (redundantly) in the Ohio counties of Seneca and Geauga (whose Sheriffs were also party plaintiffs in the lawsuit). However, in a November 16, 2021 DirectEmployers Week in Review story, we catalogued four other lawsuits pending against the federal contractor vaccination mandate. None of those four courts have yet to issue an opinion, one way or the other.
• The Kentucky case decision held the Safer Federal Workforce Task Force Guidance exceeded the president’s authority under the Federal Property and Administrative Services Act (“FPASA”) and also raised serious constitutional concerns.
• The court found:
  • Plaintiffs had standing to bring suit against the Guidance. This issue was not at all a given, since plaintiffs had not presented evidence of being a party to a federal contract to which the vaccine mandate applied. The Guidance applied only to new federal contracts or solicitations occurring after November 15^th or contract renewals occurring after October 15th. However, the court found the plaintiff states were entitled to “special solicitude in the standing analysis.” The Court held that the states may litigate to protect quasi-sovereign interests that concern the state as a whole. In the end, the Court held that the plaintiff states made an adequate showing that they would be involved with federal contracting in the near future. Team Biden could well win this issue as to the state plaintiffs on appeal if the states lack evidence of having entered into federal contracts. NOTE: It is VERY unusual for states within the United States to enter into federal government contracts (as opposed to federal contracts for Federal Financial Assistance: i.e., “grants” …which are excluded from the Guidance. See our WIR story: Thursday, September 9, 2021: “President Biden Mandates COVID-19 Vaccine for Certain Federal Contractors: Exceptions As Interesting As Who is Covered,” and President Biden’s Executive Order 14042 dated September 9, 2021).
  • President Biden exceeded his delegated authority under the FPASA since the vaccine mandate did not have a close enough nexus to the FPASA’s goal of creating an “economical and efficient system for…procurement and supply,” which is the extent of the authority Congress delegated to the Executive Branch. The court looked favorably on previous holdings in other jurisdictions noting that the FPASA did not provide the President authority to “write a blank check…to fill in at his will,” and that the FPASA did not allow the President to exercise powers that reach beyond the FPASA’s express provisions.
  • Allowing only businesses with a vaccinated workforce to compete for contracts with the federal government would violate the Competition in Contracting Act (“CCA”) because it would fail to provide for full and open competition among all businesses. This could result in the government not obtaining the best value for services and products, as the CCA intended.
  • Imposition of vaccine mandates through an extension of the president’s authority under the FPASA would implicate the nondelegation doctrine. Specifically, the nondelegation doctrine bars Congress from transferring its legislative power to another branch of the government. As an initial matter, the court was unsure whether vaccine mandates even lay within Congress’ power. Nonetheless, the court was clear both that (a) the Congress had not delegated a vaccination mandate to the President and (b) that a vaccination mandate could not come from the Executive Branch of the federal government exercising legal authority it did not have from either the U.S. Constitution or the U.S. Congress.
  • The federal imposition of a vaccine mandate raised concerns regarding the concepts of federalism inherent in the U.S. Constitution, including the Tenth Amendment itself. (“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”) This is because regulation of health and safety matters is primarily and historically a matter of local concern. Moreover, the Constitution does not give the federal government any general police power the Tenth Amendment otherwise reserves to the states. The court found the Fifth Circuit’s holding regarding the OSHA ETS persuasive, in that any mandate as to federal contractors exceeded the federal government’s authority under the Commerce Clause since vaccine mandates regulate noneconomic activity.
  • Interestingly, the court rejected all of the plaintiffs’ arguments related to the Biden Administration not following proper administrative procedures. While the court did find the Biden Administration’s procedural path “inartful and a bit clumsy,” the court found that since the guidance was not a final agency action, it was not subject to judicial review under the Administrative Procedure Act (“APA”). Furthermore, the court determined that the Office of Management and Budget (“OMB”) “Determination” OMB published along with the Guidance did comply with the APA by (a) providing for a notice and comment period, (b) included an economic and efficiency analysis, (c) addressed potential effects on the labor force and (d) costs associated with the vaccine mandate, and (e) provided stated reasons how the vaccine mandate would improve procurement efficiency.
    • Important Note: Federal contractors and subcontractors which want to comment on the vaccine mandate will therefore want to comment to OMB on its proposed Guidance as we reported in the DirectEmployers Week in Review on November 16, 2021 discussing the White House’s “Hail Mary Pass” to OMB.

2. Two Federal Courts Also Enjoined the Medicare and Medicaid Services Provider Vaccine Mandate This Week:

On the same day as the Kentucky v. Biden decision, the U.S. District Court for the Western District of Louisiana issued an order enjoining the Centers for Medicare & Medicaid Services’ (“CMS”) Rulemaking mandate requiring vaccination of staff of healthcare providers receiving Medicare and Medicaid from the federal government. Louisiana, et al. v. Becerra, et al., Case No. 3:21-cv-03970 (W.D. La. November 30, 2021). The Louisiana v. Becerra decision was the second decision in two days enjoining the CMS vaccination mandate, following the decision in Missouri, et al. v. Biden, et al., Case No. 4:21-cv-01329 (E.D. Mo. November 29, 2021), the day before. The cumulative effect of the two decisions was to enjoin implementation of the CMS mandate nationwide (the Missouri decision enjoined implementation in the ten states which filed the suit, whereas the Louisiana decision enjoined the CMS mandate in all other states which were not a party in the Missouri suit).

In both of this week’s CMS case decisions, the courts held the government defendants named in the suits did NOT have legal authority to implement the CMS mandate. In both cases, the courts held:

• That they had jurisdiction to hear the claims despite the Biden Administration’s arguments to the contrary.
• That the plaintiff-states had standing to challenge the CMS mandate for the same reasons noted in Kentucky v. Biden (states have special solicitude regarding standing, states may litigate to protect quasi-sovereign interests that concern the state as a whole, and the states established the existence of an injury in fact).
• The CMS mandate violated the APA by failing to comply with the “notice and comment” procedure required of any final federal agency rule. Both courts rejected CMS’ contention that it had “good cause” to not require notice and comment because that Rulemaking procedure was allegedly impracticable, unnecessary, or contrary to the public interest. In both cases, the courts relied on the fact that it took CMS almost two months to issue its interim final rule mandating vaccinations to defeat the Administration’s contention it had good cause, since that two-month delay was longer than it would have taken CMS to have complied with the notice and comment requirement.
• The CMS mandate was arbitrary and capricious in violation of the APA. Both courts based their finding on CMS’ failure to consider or reject alternatives to the mandate, the mandate’s overbreadth in scope (applying to both long-term care facilities and psychiatric residential treatment facilities for youth equally as an example), CMS’ failure to consider or properly weigh the reliance interests of the plaintiffs, and CMS’ failure to explain its change in policy as to mandating vaccination. Louisiana also found the mandate arbitrary and capricious because it would not serve the purpose of helping healthcare patients, in that such mandate would result in the loss of healthcare workers and funding to healthcare facilities. Additionally, Louisiana found the stated rationale for the mandate pretextual. Missouri also found the mandate arbitrary and capricious due to the lack of record evidence showing vaccination status had a direct impact on spreading COVID in covered healthcare facilities.
• CMS’s mandate was contrary to law in that the mandate exceeded CMS’ authority. First, given the vast economic and political significance of the mandate, CMS required clear authorization from Congress empowering it to act, which it did not have. Second, the SSA sections CMS relied upon in issuing the mandate are general authorizations to prescribe rules and regulations necessary to carry out the Medicaid and Medicare programs, which do not include authority to impose vaccine mandates. Third, the mandate is contrary to law in that it violates additional provisions of the SSA. Finally, the mandate seeks to use the power of the federal government to overtake an area of traditional state authority (regulations related to health and safety falls within a state’s general police powers) in violation of the nondelegation doctrine and the Tenth Amendment.

3. What’s Next?

Court watchers anticipate the Biden Administration will appeal all four of these rulings adverse to the vaccine mandates when appeals are appropriate. Even with expedited hearings and arguments, it will be early Spring 2022 before all pending vaccine challenge cases have cycled through the federal Courts. Whether any of the case decisions will be suitable for SCOTUS review also remains to be seen. It also remains to be seen whether any need for vaccine mandates will exist late next year depending on the progress of the COVID-19 virus and technological understanding improves, if it does, as to how to disrupt it or convert it to an innocuous and mere non-life-threatening flu. To Be Determined. Delay and the advance of time seem to currently favor challengers to the vaccine mandates. Napoleon’s observation that a large part of his mail no longer required an answer if he delayed his response and let the situation cure itself may well aid the challengers.

Tuesday, November 30, 2021: Decision Striking Down the Federal Contractor/Subcontractor Vaccine Mandate Portends Difficulty for OFCCP to Enforce its AAP Certification Portal

We discuss the case above in our re-cap of the whirlwind week of vaccine mandate injunctions. It is State of Kentucky et al. v. President Biden, et al.

While the Court struck down the vaccine mandate for several different reasons, as we note in the above WIR story about the State of Kentucky case decision, it rejected the legal challenge to the vaccine mandate attacking The Biden White House’s initial failure to follow the Rulemaking requirements of the Administrative Procedure Act (“APA”). BUT it was only because the White House, through the Office of Management and Budget (“OMB”) finally published the federal contractor vaccination mandate in the Federal Register for public Notice and Comment (however belatedly) that the Court rejected the APA challenge.

Failure to publish for formal Rulemaking (i.e., public Notice and Comment) pursuant to the APA is the same warning federal contractors have sounded to OFCCP about the legal deficiency with the OFCCP’s announced AAP-Verification Interface and AAP certification “requirement” (the now called “Contractor Portal”) as we wrote about here.

What’s Happening?

The Biden White House started this administration with the belief that federal contractors could be ordered about in the discretion of the President without the need for formal APA Rulemakings. The White House looked at federal contractors as mere extensions of the federal workforce, over which the President has hegemony as the Chief Executive Officer of the Executive Branch of the federal government.  So, we saw OFCCP issue notifications about its Contractor Portal and told OMB it did not intend to publish a Rulemaking to satisfy the APA. The White House greenlighted that thinking because it was still in the fog of thinking, at that time, that federal contractors were just federal employees, once removed, but still in the federal workforce family and thus subject to the discretion of the President to order about in his discretion by contract. Then, the President ordered up four vaccination mandates, two applying to federal employees and federal contractors, respectively, with no APA Rulemaking formalities (i.e., public Notice, but seeking no pre-enforcement public Comments) and two vaccination mandates with formal Rulemakings (the OSHA “Emergency Temporary Standard” (“ETS”) which covered employers with 100 or more employees) and a second separate Rulemaking as to Medicare/Medicaid Service Providers).

When the vaccination mandate Complaints started to be filed, the Plaintiffs did not challenge the Rulemaking mandates under the APA (although the OSHA ETS Complaints have challenged whether an “emergency” truly exists to warrant an abbreviated Rulemaking via an “Emergency” Temporary Standard). However, as to the federal contractor vaccine mandate, the plaintiffs did offer challenge under the APA because there was no formal APA Rulemaking, at least at first, and not before plaintiffs filed their Complaint in the Courts.  Anticipating the coming litigation, and while the federal contractor lawsuit was pending, the White House then pivoted away from its prior (poor) belief that Rulemakings were not needed for federal contractors. Once “enlightenment” about the need for APA Rulemaking hit, the White House suddenly ordered OMB to issue a proposed Rule as to federal contractor vaccination mandates. (Oh, and by the way, the more they (in the White House) began to understand the APA, and the Occupational Safety and Health Administration (“OSHA”) at USDOL thought about the many lawsuits filed to stop its ETS, OSHA then pivoted away from the “Emergency“ Rulemaking route, as our above story also reports. Notice also our separate WIR story, above, reporting OSHA’s request for Comments now on the ETS.)

Here is what the Kentucky federal court had to say about the need for APA Rulemaking and the vaccine mandate for your consideration as you think about the OFCCP Contractor Portal initiative greenlighted by The White House back before “enlightenment” about the need for APA compliance as to federal contractor policy shifts:

“The Administrative Procedure Act (APA) requires a reviewing court to “hold unlawful and set aside agency action, findings, and conclusions found to be…without observance of procedure required by law.” 5 U.S.C. § 706(2)(D). Specifically, Plaintiffs argue that 41 U.S.C. § 1707(a) requires procurement policies, regulations, procedures, or forms to be published in the Federal Register for sixty days before it can take effect, which Plaintiff’s state Defendants failed to do with regards to the FAR Council Guidance and OMB Determination. (fn omitted)*** Although the procedural path taken by the agencies was, at times, inartful and a bit clumsy, the Court finds based on the record before it that the Defendants likely followed the procedures required by statute.” (emphasis added)

So, the Court rejected the APA formal Rulemaking challenge because it found that OMB had engaged in APA Rulemaking, even if only belatedly. What the Court meant when it wrote that the “procedural path taken by the agencies was, at times, inartful and a bit clumsy,…” was that the White House had originally ordered a collection of federal agencies (the FAR Council and something called the “Safer Federal Workforce Task Force”: notice the reference to “Federal Workforce,” by the way) to create rules for federal contractors/subcontractors without APA Rulemaking and to issue informal memoranda, website notices, FAQs and even Press Releases to instruct federal contractors to comply with a unique federal vaccination mandate the President had ordered up via Executive Order 14042. Then, with litigation coming, OMB took over to formalize the process and issued a “Determination” imposing the federal contactor vaccination mandate on federal contractors/subcontractors and to ratify the messy string of informal written instructions which the Safer Federal Workforce Task Force had pumped out without Rulemaking. And then, after the Plaintiffs’ filed suit to attack the OMB “Determination,” OMB retracted that Determination and heavied it up with a new and revised “Determination.” That revised Determination, then for the first time, also (finally) made reference to and acknowledged the APA, but argued first that formal Rulemaking could be avoided because of a vaccination emergency (just like OSHA has argued it could skip the APA formal Rulemaking formality and just issue an “Emergency” Temporary Standard…for which it is now, since enlightenment about the power of the APA, undergoing (as we write) APA Notice and Comment). Second, OMB argued, it had belatedly complied with the APA by issuing a request for public Comment which would satisfy APA formal Rulemaking standards.

So, while the federal contractor vaccination mandate started out without concern for APA Rulemaking, the White House wised up, snapped to, referenced its sudden thoughtfulness about the APA, invoked an emergency exception to it, extended the deadline for compliance and started a formal APA Rulemaking public Notice and Comment period to cure its initial failure to comply with the APA. That “Hail Mary” pass from the White House to OMB, and OMB’s belated invocation of APA Rulemaking may save the White House the embarrassment of losing the federal contractor vaccination mandate on the procedural grounds that it failed to comply with the APA.

But, What About the OFCCP AAP-Verification Initiative, Greenlighted Before the White House’s Enlightenment About the APA?

Three things are true.

First, OFCCP is holding the line that its AAP certification initiative is legal, based on a sprinkling of OFCCP Rules selected from here and there from the far distant past to serve as what the agency hopes are sufficiently large legal hooks on which to hang its claim of having long ago satisfied its APA Rulemaking requirement…even before it created the AAP verification concept.

Second, OFCCP hopes it has put “enough fog on the ground” that timid contractors may not look behind OFCCP’s conclusion to see and examine the claimed proof of APA compliance.

Third, OFCCP is holding its breath that contractors (a) just voluntarily comply to avoid OFCCP precipitating a lawsuit against a non-complying federal contractor the agency will more likely than not lose, and (b) no one sues OFCCP for violating the APA.

But, OFCCP has time to save itself, as OSHA is now doing as to its vaccination mandate ETS and OMB is doing as to the federal contractor/subcontractor vaccination mandate. And there are important questions and wrinkles with the Contractor Verification initiative, at any rate, which beg for formal APA public Notice and Comment. The purpose of the APA is, among other things, to allow the federal agency sponsoring a new policy which impacts the agency’s stakeholders to build trust with the stakeholders and to understand how their policy initiative might be further improved, from the stakeholders’ point of view, to avoid ambiguity or unnecessarily difficult or burdensome compliance.

Wisdom late about the need for formal APA Rulemaking is better than wisdom never, as OSHA and OMB and The White House have now understood. Will OFCCP?

Thursday, December 2, 2021: OFCCP’s AAP Verification Interface Gets Set to Open – Contractors Must Now Decide Whether to Voluntarily Comply with OFCCP’s Unenforceable “Requirement” Since the Agency Has Now “Thrown Down Its Gauntlet”

The Office of Federal Contract Compliance Programs (OFCCP) announced the official launch of its “Affirmative Action Program Verification Interface (AAP-VI).” Internally named the “Contractor Portal” (previously AAP-VI and then AAVI), the Agency expects that federal Government contractors and subcontractors will annually “certify” that their organization’s AAPs are “developed and maintained.” In addition, the Agency plans to also “require” contractors and subcontractors to submit their AAPs via the portal during a compliance evaluation.

OFCCP’s Contractor Portal Opening and Certification Timeline appears below.

How We Got Here

We must jump directly to our flashback reporting of “How We Got Here,” as there is much to unpack about the verification initiative. Our headline speaks volumes, and the rapid-fire takeaways will get you up to speed. In addition, check out our bonus blog before you panic or question what to do next.

• August 31, 2021: “OFCCP’s New Emerging AAP Delivery Portal and AAP “Verification” Program: Much Ado About Nothing”
  • Both New Initiatives Lack Regulatory Authority and Both Are Unenforceable
  • But, will contractors nonetheless flock like lemmings?”
• Bonus blog: “OFCCP’s New Emerging AAP Delivery Portal and AAP “Verification” Program: Much Ado About Nothing”

But OFCCP Said “MUST” and “REQUIRED”?!

The news releases (see below) and the FAQs (also spotlighted below) take the approach that OFCCP has the legal authority to require certification through its portal.

From the OFCCP Bulletin:

“…Covered federal contractors and subcontractors (“contractors”) must use this portal to certify, on an annual basis, whether they have developed and maintained an affirmative action program for each establishment and/or functional unit, as applicable. In addition, the Contractor Portal will provide a secure portal for scheduled contractors to submit to OFCCP their Affirmative Action Program(s) during compliance evaluations.” (emphasis added)

From the USDOL new release:

“… Contractors within OFCCP’s jurisdiction that meet certain contract dollar and employee thresholds are required to develop and maintain Affirmative Action Programs and will be required to annually certify compliance.” (emphasis added)

Frequently Asked Questions Regarding Certification “Requirement”

• Why is OFCCP requiring contractors to use the Contractor Portal?
• Who is required to use the Contractor Portal?
• Are contractors that have Functional Affirmative Action Program (FAAP) agreements required to use the Contractor Portal?

OFCCP’s Portal Opening and Certification Timeline

• February 1, 2022: Portal open for access registration. OFCCP intends to send an e-mail to each covered federal contractor in its jurisdiction whose email information is available in its system inviting them to register.
• March 31, 2022: Contractors able to “certify their AAP compliance.”
• By June 30, 2022: “Existing contractors must certify whether they have developed and maintained an affirmative action program for each establishment and/or functional unit, as applicable.” (emphasis added – again with the “must?!”)

What’s Next?

As noted in our previous stories, there are a few MAJOR roadblocks for the OFCCP:

1. OFCCP does not have the regulatory authority now (or historically) to compel covered federal Government contractors to verify that they have created AAPs and that they comply with OFCCP’s Rules of AAP construction.
2. Audit Submission. OFCCP does not have the regulatory authority to compel covered federal Government contractors to submit AAPs for audit via electronic and/or digital means. OFCCP has always acknowledged that lack of authority (while always wishing it could compel digital deliveries).
3. OFCCP must double back to OMB to request a change to all of OFCCP’s audit Scheduling Letters to direct the submission of AAPs and Itemized Listing information to OFCCP’s coming portal.

Thursday, December 2, 2021: Big Budget Bill Busts Again: Federal Government Funded Through Only February 18, 2022

Working late into Thursday night, the U.S. House of Representatives and Senate both approved a stop-gap “Continuing Resolution,” but only by narrow margins and following a scare in the Senate that the bill would not pass. The Bill is H.R. 6119 titled ‘‘Further Extending Government Funding Act.” President Biden immediately signed the bill upon receipt on Thursday night. The President’s signature on the Bill barely avoided a federal government shut down otherwise scheduled to occur the next day.  H.R. 6119 required a 3/5ths vote of the 100-member Senate and passed 69-28 (with 3 not voting), but only with the help of 28 Republican Senators.

The Bill keeps the federal government operating through only February 18, 2022. The Congress uses a Continuing Resolution to continue the funding of the federal agencies at their prior year’s budget allocations when the Congress and the President cannot agree on an Omnibus Budget Bill funding the federal government through the end of its Fiscal Year. The Congress and the President must now either agree upon an Omnibus Budget Bill by February 18, 2022 to fund the federal government through the end of its Fiscal Year 2022 (ending September 30, 2022) or pass another Continuing Resolution. The federal government will be 4 ½ months into its 2022 Fiscal Year if the Congress and the President can then agree on an Omnibus Budget Bill for the remainder of Fiscal Year 2022. Of course, good form is to have a Budget in place for the federal government BEFORE it begins its Fiscal Year.

Thursday’s action followed the Continuing Resolution President Biden signed on Thursday, September 30, 2021 (the last day of Fiscal Year 2020) as the Congress reached impasse on an Omnibus Budget Bill for FY 2022 and which we wrote about here. Originally called “The Budget Bill” in mid-2021, President Biden was trying to force through a record-breaking $3.5 Trillion budget for the federal government with social spending accounting for about 2 ½ Trillion Dollars more than the usual (about) almost $1 Trillion federal government budget.  When “The Budget Bill” predictably ran into massive opposition (among Democrats, forget about Republicans), the President in October 2021 re-named the bill the “Human Infrastructure Act” and devalued his ask to $2 Trillion. When Democrats still could not get comfortable with the $2 Trillion ask, the bill faltered, again. Rebounding from that bitter defeat, President Biden in late October again re-named his budget ask “The Build Back Better Act,” mimicking his political campaign slogan, and lowered his ask a second time to $1.75 Trillion. Democrats nonetheless again locked up on that number as intra-party wrangling ensued about what social and climate spending should occur and at what levels. (Republicans just sat on the sidelines watching the Democrat food fight with some amusement and self-satisfaction).

And last week, Senate Majority Leader Chuck Schumer (D-NY) “counted votes” in the Senate once again, and quickly realized he did not have the votes among even his own party to get to $1.75 Trillion and with the social/climate spending being proposed. So, Majority Leader Schumer folded his tent and put up yet another stop-gap Continuing Resolution. In most Administrations where a Budget Bill fails twice and devolves to a second Continuing Resolution to provide stop-gap funding to the federal government, the President usually then bows to the political reality and on the third bounce typically lowers his sights to get a deal to allow for an Omnibus Budget Bill to pass and to stabilize federal agency budgeting and contracting for the reminder of the Fiscal Year. (Stop-gap Continuing Resolutions wreak havoc on federal agency managers trying to budget and staff against an unknown money supply in two and four-month increments. A horrible way to do business.)

What this Means for the OFCCP, EEOC, and Other Federal Agencies

This second Continuing Resolution means the agencies have to live within the financial and staffing levels approved in their prior year’s budgets. For the OFCCP, that means $105,976,000 and 451 Full-Time Equivalent employees (its FY 2021 Budget), and not the whopping $140,732,000 and 639 employees the then giddy Biden White House proposed in June 2021 for FY 2022 as we reported here. For the EEOC, that means $404,490,000 and 1,979 Full-Time Equivalent employees (its FY 2021 Budget) and not the very ambitious $445,933,000 and 2,276 employees the Commission proposed in its FY 2022 Congressional Budget Justification which we reported here. Also, in the case of the EEOC, smaller budgets and staff appear to have allowed it to set new records for charge processing and backpay collections raising serious questions whether it should actually shrink its budget given the efficiencies recent EEOC Chairs have brought to the Commission.

What’s Up Next Before the Continuing Resolution Terminates February 18, 2022?

The September 30, 2021 compromise in the Senate which allowed the Continuing Resolution to pass and fund the federal government through December 3, 2021 also included agreement to raise the debt ceiling of the United States through sometime in December 2021. This “punt” allowed the Congress and the President more time to come to agreement on the increased spending of the federal government. Current estimates are that the federal government on December 18, 2021 will burn through all of the available debt borrowing (i.e., “debt ceiling”) it is relying upon to currently fund itself. (That estimate can be off by a few days either way since it is difficult to precisely predict the daily burn rate of federal government spending and balance an almost one trillion dollar “checkbook”). So, no one in the Congress is going home early for the Holidays since the failure to raise the debt ceiling would cause the United States to default on its outstanding debt obligations. Out of money, the federal government would have to shut down. World financial markets would react immediately and sharply and some would collapse. Most economists predict that a world-wide depression would soon ensue as the world’s largest national economy and leading global trader ground to a halt, overnight.

So, this issue will be another opportunity for Democrats and Republicans to arm-wrestle about what the proper level of federal spending is, and how quickly the federal government will stop “printing money” (i.e., borrowing money) or whether it will use inflation to help the U.S. buy its way out of its mounting (and crushing) debt…which no economist thinks is sustainable. So, more sturm and drang on the horizon for Capitol Hill. So, Republicans will soon be sounding quite sanctimonious that they generously raised the debt ceiling in October (against their better judgment) to help the Democrats buy time to get a financial plan to deal with the debt. Republicans will also argue they also went out of their way to gift the Democrats two months-plus (from October 2021) to put together an agreement on the debt which, Republicans will argue, the Democrats have now frittered away leading to the coming debt-ceiling crisis for a second time in the same year. For their part, the Democrats will rail that the Republicans are playing with nuclear fire to not agree to incur more debt so as to not default on prior debt and that continued resistance to borrow and spend and borrow-some-more policies will undermine confidence in world financial markets that the United States can pay its debts. Oh, it is going to be rich on both sides. Buy extra popcorn. This fight could go extra rounds…. And, it is an important fight.

Friday, December 3, 2021: International Day of Persons with a Disability Sparks Global Movement

In support of International Day of Persons with a Disability, the United States is partnering with other governments, civil society, and experts across the globe to discuss disability-inclusive democracy around the world. This event, which is being co-hosted by Norway and the United Kingdom, is a part of the U.S. Summit for Democracy. The discussion will include how to improve the accessibility of voting, increase support for disabled political leaders, and expand civic engagement.

The Biden-Harris Administration released a Fact Sheet with this and other information outlining some of the things the Administration has done thus far in support of individuals with disabilities. Actions highlighted by the Administration include:

• Appointing a U.S. Special Advisor on international disability rights.
• Seeking to increase access for voters with disabilities.
• Seeking to advance diversity, equity, inclusion, and accessibility across the Executive Branch of the United States government.
  • See WIR from June 25, 2021
• Seeking to expand access and inclusion for disabled Americans.
• Seeking to develop inclusive International health systems.
• Seeking to help individuals cope with challenges posed by COVID-19.

In the coming year, the Administration plans to take the following steps to create a more disability-inclusive democracy:

• Launching the Disability Inclusive Democracy Year of Action.
• Focusing on Inclusive Climate Planning.
• Announcing Partnerships to Improve Access.
• Committing to an Inclusive Disability Policy.

Friday, December 3, 2021: Amid a Strong Economy, Another Disappointing Monthly Jobs Report as Long-Term Unemployment Remains 1.1 Million Higher Than February 2020

Total nonfarm payroll employment rose by only 210,000 jobs in November, according to the USDOL Bureau of Labor Statistics (“BLS”) monthly “Employment Situation Summary” for November 2021. This was disappointing to economists who hope for a million jobs every month for the coming year to return people to work from the COVID-19 pandemic. Moreover, economists had projected and expected at least 500,000 new jobs would be added to the workplace in November.

Context: Over about 150,000 new jobs per month was a signal the U.S. economy was growing its Gross Domestic Product (GDP) at about the hoped-for 2-3% annual growth rate BEFORE the COVID-19 pandemic. There are currently, however, over 9 million people unemployed (and growing) in the United States (see below to understand how the USDOL Bureau of Labor Statistics (“BLS”) built the 9+ million number) and while over 4 million available jobs remain unfilled in the United States (and growing in number as we reported in an August 2, 2021 WIR story). At the same time, the economy today employs almost 4 million fewer employees than at the end of February 2020 (when the United States entered the COVID-19 pandemic and technically had no unemployment: more jobs available than jobseekers to fill them).

BLS’ Friday report of the lack of vibrant job growth in November then combined with fears that the Omicron Variant to the COVID-19 virus was coming to the U.S. and would likely become another factor further impeding the ability of employers in the U.S. to hire a sufficient number of employees. Those fears of coming even potentially slower job growth then led some Wall Street financial analysts on Friday to forecast a coming slowing of the currently strong U.S. economy. The stock market then plunged lower. So, a lot of importance attaches to getting Americans back to work in MUCH greater numbers.

Some Intuitively Good News Which is Actually Bad News: The number of persons on short-term unemployment rolls (those jobless for 1-to-26 weeks) fell in November by 542,000 to 6.9 million. That seems like “good news.” (The short-term unemployment rate is the “unemployment percentage”—which in November dropped a whopping .4% from 4.6% to 4.2%) and which you see BLS prominently publish each month. Historically, the (short term) unemployment percentage moved closely up and down in parallel with the total percentage of unemployed. In the “old days,” unemployed workers were always looking for available jobs, eventually got them, and then rolled off the unemployment rolls as they rolled onto payrolls. The (short-term) unemployment percentage thus engendered much discussion in the past among economists who used it as a cheap proxy measure of the strength of the U.S. economy.

So, how did the “unemployment percentage” drop, dramatically (for a one-month period), but the number of unemployed stayed the same? Well, the transition of workers during times when jobs were plentiful from the unemployment rolls to payrolls was then, and this is now. And now, millions of workers are NOT going back to work, but are rather sitting it out, unemployed, and without unemployment benefits which stop at the end of 26 weeks. These workers who have dropped out of the workforce for longer than 26 weeks are rolling onto the “Long-Term Unemployed” list rather than rolling onto payrolls. In November, for example, that decrease in short-term unemployment (to 4.2%) did not mean that all those persons dropping off the short-term unemployment rolls went into the job market. That much is obvious as the economy picked up only 210,000 new jobs, far less than half the 542,000 workers who rolled off the short-term unemployment rolls causing that large drop in the (“short term”) unemployment percentage. So, even while the “unemployment percentage “dropped,” several hundred thousand workers previously counted as “short term unemployed” rolled over to the Long-Term Unemployed List, rather than onto payrolls. So, those hundreds of thousands of unemployed workers remained unemployed, but hidden from view/not counted in the (short term) unemployment percentages.

So, in November, the percentage of those persons in America who were unemployed did not change much: they just moved into different statistical buckets. By the way, not everyone on the (short term) unemployment list goes onto payrolls or onto the Long-Term Unemployment list. Some of them “retire” or die and thus are not in any of the unemployment figures. “Long-term unemployed” is a defined term BLS uses to identify those workers who are jobless for longer than 26 weeks at which time they no longer receive unemployment benefits even while remaining unemployed. The “Long-Term Unemployed” then subsist primarily either on savings, family economic support or public welfare programs.

The number of long-term unemployed is now 2.2 million. That number was little changed in November despite an influx of several hundred thousand workers from the rolls of the (short term) unemployed. (This was due to the aforementioned deaths and retirements from among those on the Long-Term Unemployed list). However, and here is the “bad news,” the Long-Term Unemployed list is currently 1.1 million higher than at the end of February 2020 (as the U.S. entered the COVID-19 pandemic).

So, altogether, there are over 9 million unemployed persons in the United States (6.9M + 2.2M). The Long-Term Unemployed thus currently account for almost 1/3rd of the total number of those persons who were unemployed in November…but they are like the bottom of an iceberg: largely out of view and not seen. And, the bottom of the Long-Term Unemployed “iceberg” has grown dramatically larger during the COVID-19 pandemic. This has led to media discussion of “The Lost Workforce” or “The Lost Jobs.”

Job increases occurred in professional and business services (+90,000), although the overall number is 69,000 below its level in February of 2020. Transportation and warehousing also saw an increase of 50,000 jobs, which is 210,000 above its February 2020 total.

Health care employment moved little in November with an increase of 2,000 jobs. Within the industry, employment in:

• ambulatory health care services continued to trend up by 17,000 jobs, while
• nursing and residential care facilities lost 11,000 jobs.

Employment in health care is down by 450,000 since February 2020, with nursing and residential care facilities accounting for nearly all of the loss.

Nonfarm Payroll Employment “New Jobs Added”

Monthly revisions result from additional reports from businesses and government agencies since the last published estimates and the recalculation of seasonal factors.

US. Secretary of Labor Marty Walsh’s remarks.

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.