OFCCP Week In Review: November 13, 2023

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 J. Chambers and Cynthia L. Hackerott. In today’s edition, they discuss:

• US DOL Honored 859 Civilian Employers with 2023 HIRE Vets Medallion Awards
• White House OMB Announced Finalized Revisions to Two Key Guidance Documents Following April Executive Order on “Modernizing Regulatory Review”
• In Brief
• New Publications
• Looking Ahead: Upcoming Date Reminders

Wednesday, November 8, 2023: US DOL Honored 859 Civilian Employers with 2023 HIRE Vets Medallion Awards

Corresponding with Veterans Day 2023, the U.S. Department of Labor’s Veterans Employment and Training Service (“VETS”) held its virtual 2023 HIRE Vets Medallion Award Ceremony, recognizing 859 employers with gold- and platinum-level awards. The Honoring Investments in Recruiting and Employing American Military Veterans (“HIRE Vets”) Medallion Award celebrates employers for their commitment to supporting U.S. military veterans in the civilian workforce. It is the only federal-level veterans’ employment award that recognizes a company or organization’s commitment to veteran hiring, retention, and professional development.

Acting Labor Secretary Julie Su and Assistant Secretary for VETS James Rodriguez presented the awards. The event also featured award recipients sharing how their organizations employ, retain, and otherwise support veterans in the civilian workforce.

“Congratulations to the more than 850 award recipients who understand that tapping into the unique skills and talents of our veterans helps to strengthen their organizations and power our nation’s economic growth,” Acting Secretary Su said in a statement. 

You can search for awardees using various filters on the table here. Click here for a map showing the locations of the awardees. Also, see our story on this year’s nomination process here.

We congratulate the many DE Members among this year’s award recipients!

Thursday, November 9, 2023: White House OMB Announced Finalized Revisions to Two Key Guidance Documents Following April Executive Order on “Modernizing Regulatory Review”

Revised Documents Reportedly Reflect the Latest Economic/Scientific Understandings

In accordance with President Biden’s April Executive Order (“EO”) 14094 on “Modernizing Regulatory Review,” the Office of Information and Regulatory Affairs (“OIRA”) of the White House’s Office of Management and Budget (“OMB”) announced its finalized revisions of two key guidance documents. EO 14094 directed OMB to change the criteria for proposed agency regulations subject to rigorous review by OMB in a way that will significantly reduce the number of proposed Rules that OMB will “rigorously” review with cost-benefit analyses. Importantly, EO 14094 also increased the economic threshold for a “significant regulatory action” subject to “rigorous” regulatory cost-benefit analyses of those actions to those that have an annual effect on the economy of $200 million or more (up from the previous $100 million). Furthermore, it directed the OIRA Administrator to adjust this threshold for GDP growth every three years. (See our story here for a detailed discussion of EO 14094.)

Context: Rigorous cost-benefit analyses were a legacy of the Carter Administration in the late 1970’s which required their use for certain major regulations. President Carter, a graduate of the U.S. Naval Academy (Class of 1946), was a nuclear engineer in Admiral Hyrum Rickover’s “nuclear Navy.” A major hallmark of President Carter’s presidency was to overhaul decision-making to modernize it requiring all major polices to be tied to rigorous quantitative cost-benefit and management-by-objective analyses. President Carter charged OMB to be the guardian to insure rigor and adherence to those principles.

In recent years, many federal agencies have strayed from supplying OMB with rigorous and credible cost and benefit numbers. At the same time, OMB grew increasingly tolerant of artificially low-cost estimates to allow agencies to proceed with their President’s political agenda (in both Republican and Democrat administrations). For example, federal contractors and employers have complained for years that OFCCP’s and the EEOC’s cost estimates for numerous significant regulatory proposals have been grossly inaccurate and sheer make-believe.

Recently, many industries and companies have successfully challenged the often manifestly faulty “cost burden” estimate pabulum OMB has accepted and approved from regulated agencies trying to increase the impact of their programs on their regulated communities. Courts have enjoined federal agencies from proceeding with regulations predicated on erroneous cost-benefit analyses.

The New Guidance: The revised guidance documents update OMB guidance on how federal agencies calculate costs and benefits (Circular A-4) and how federal agencies may spend federal grant monies (Circular A-94). OMB announced the finalized versions of both Circulars on Thursday and published formal Notices of their availability in the Federal Register on Monday, November 13 (the Circular A-4 Notice is here and the Circular A-94 Notice is here).

OMB’s controversial changes will now shield many federal executive agencies from producing cost analyses when proposing new regulations and also from the need to justify those costs by documenting projected benefits to society greater than the costs to society. NOTE: Most of OFCCP’s Proposed Rules would fall below the new $200 Million rigorous review threshold. Falling below the $200 Million rigorous review threshold will not mean that OFCCP need not submit its proposed Rules for OMB review. Rather, it just means that OMB will give them only a cursory review and will grant their approval “drive-through” privileges much like going to Disneyland with a “Disneyland Speed Pass.”

OMB has chosen to emphasize the modernization of its cost-benefit analyses and not its doubling of the threshold for rigorous analysis of agency proposals or its indexing to cost-of-living costs every three years. Instead, the OIRA announcement states that the Circular A-4 revisions “will help ensure that agencies analyze the consequences of regulations using the most up-to-date economic and scientific understandings.” Circular A-4 covers the valuation of future consequences, the distribution of a policy’s effects, the scope of effects to analyze, and the best way to account for effects that are difficult to monetize, the OIRA said, adding that these topics “are at the core of determining the benefits and costs of regulations.”

The updated Circular A-94 reflects “the latest scientific and economic advances and knowledge, helping ensure that federal funds have the greatest possible impact, from building levees to protect communities to constructing transportation infrastructure to connect them,” according to the OIRA.

How We Got Here

In our April story on EO 14094, we reported OMB contemporaneously published two proposals to revise both Circular A-4 (proposal here) and Circular A-94 (proposal here). Section 3 of EO 14094 specifically directed OMB to update Circular A-4 in accordance with the EO, The public comment periods for both proposals closed on June 6, 2023, with almost 4,500 comments submitted on the Circular A-4 proposal and 50 comments submitted on the Circular A-94 proposal.

What’s Covered?

The revised Circular A-4 runs 93 pages and the revised Circular A-94 runs 28 pages. OMB also posted a 94-page document providing explanations of its decisions that are reflected in the revisions to Circular A-4, as well as responses to public comments. The explanatory document notes that along with the OMB’s solicitation of public comments, an independent and external contractor selected nine peer reviewers and organized a peer review of the proposed revisions to Circular A-4. Moreover, in drafting both the proposed and final revised guidelines, OMB consulted with the Council of Economic Advisers as well as relevant agencies and Executive Office of the President components. The explanatory document also discusses some of the public comments submitted on the Circular A-94 proposal.

Specific aspects discussed in the explanatory document are:

• Scope of Analysis (pages 3-10);
• Developing an Analytic Baseline (pages 10-15);
• Identifying the Potential Needs for Federal Regulatory Action (pages 15-20);
• Alternative Regulatory Approaches (page 21);
• Developing Benefit and Cost Estimates (pages 21-27);
• Other Key Considerations (pages 28-29);
• (Accounting of) Transfers (pages 29-32);
• Distributional Effects (pages 32-52);
• Treatment of Uncertainty (pages 53-56); and
• Discount Rates (pages 57-94). 

OMB’s Thursday announcement also highlighted the changes regarding:

• Discounting;
• Distributional Analysis;
• Spatial Scope of Analysis; and
• Non-monetized Effects.

Wednesday, November 8, 2023: U.S. Senate Confirmed Nomination of Current EEOC Chair Burrows for 3rd Commissioner Term

Without a single Republican vote in favor, the U.S. Senate confirmed, 51-47, President Biden’s nomination of Charlotte A. Burrows for a third term on the bipartisan U.S. Equal Employment Opportunity Commission. Two Republicans – Joni Ernst (IA) and
Tim Scott (SC) – did not vote. Less than two hours before the confirmation vote, the Senate voted 51-47 to bring any debate on the nomination to a close. That vote was identical to the later confirmation vote.

Commissioner Burrows is currently the EEOC Chair, and her third term will expire on July 1, 2028. The EEOC’s statement on her confirmation said that, going forward, she intends to focus on “strengthening and deepening the agency’s systemic discrimination work” and supporting “employer efforts to implement and foster lawful and appropriate diversity, equity, inclusion, and accessibility” practices. For more background on this nomination, see our stories here, here, and here.

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.