Compliance News | A Review and Comparison of OFCCP-Relevant Executive Orders, Regulatory Activity, and Directives Under the Biden Administration and the Prior Trump Administration

There is significant speculation about what changes affecting federal contractor equal employment opportunity and affirmative action programs will occur in a second Trump presidential term. There is reason to believe that the new administration could peel back from the general regime of Executive Order 11246, which is the basis for federal contractor and sub-contractor employers to pro-actively assess their employment practices for gender-based and race/ethnicity-based equal employment opportunity. The implementing regulations of Executive Order 11246 are what mandate that employers develop “action-oriented programs” to address any shortcomings in those areas, including engaging in pro-active recruitment of specific gender and race/ethnicity groups that are underrepresented in their workforce.

That said, as we wait and see what policies and changes the new administration puts in place, it seems useful to review the relevant equal employment opportunity and diversity, equity, and inclusion policies of the current Biden administration and the prior Trump administration as a baseline of what types of changes employers are likely to see in a second Trump administration.

There are three main areas where there were significant Executive Order, regulatory, and sub-regulatory activity during the past two administrations—(1) pay equity, (2) fighting culture war issues via requirements placed on federal contractor employers, and (3) the mechanics, efficiency, and evidentiary standards used by OFCCP in its evaluation of contractor employment practices.

In general, the DOL and OFCCP leadership under the first Trump administration emphasized transparency and the establishment of specific legal and evidentiary standards that OFCCP must follow in evaluating contractor employment practices. By contrast, the Biden administration DOL has peeled back some of these requirements, giving the Agency more flexibility regarding legal and evidentiary standards and more discretion in the level of transparency provided to contractors during OFCCP compliance evaluations.

Pay Equity

In the area of pay equity, there were the following activities:

First Trump Administration

• Directive 2018-05 – Established the methodology used by OFCCP in evaluating employer pay practices for equal employment opportunity and transparency requirement for any preliminary findings made by the Agency.
• Directive 2018-01 – Required OFCCP to provide contractors with a Predetermination Notice before issuing a Notice of Violations finding that the employer engaged in individual or systemic discrimination.

Biden Administration

• Directive 2022-01 – Established documentation that a contractor needs to provide during a OFCCP compliance review to demonstrate that it met its obligation to conduct a compensation analysis as part of its annual affirmative action plan under 41 CFR 60-2.17(b)(3).
• Implemented a new scheduling letter for OFCCP compliance reviews that required (a) submission of broader compensation data (two employee snapshots, all elements of pay, etc.) and polices and (b) information about the employer’s affirmative action compensation analysis as part of a contractor’s initial desk audit submission.
• Published proposed regulations prohibiting contractor inquiry/use of employee/applicant pay history information and requiring disclosure of compensation offered by the employer in advertisements for job openings that involve work on or in connection with a government contract.

Activities Focused on “Culture War” Issues

The following activities focused on “culture war” issues:

First Trump Administration

• Executive Order 13798 – Established federal policy to protect religious freedom and to not retaliate against entities and individuals exercising the religious freedom.
• Directive 2018-3 – Established OFCCP’s specific policies implementing the religious freedom mandate of Executive Order 13798.
• Executive Order 13950 – Prohibited training that included race or sex stereotyping and scapegoating and other divisive concepts.
• Issued Final Rule establishing broad protection of religious exemptions to compliance with federal contractor equal employment opportunity requirements.

Biden Administration

• Rescinded Executive Order 13798 (religious freedom).
• Rescinded Directive 2018-03 (religious freedom).
• Issued Final Rule deemphasizing religious exemptions and reemphasizing free exercise of religion.
• Executive Order 13985 – Rescinded first Trump administration Executive Order 13950, which prohibited “divisive” equal employment opportunity and diversity training.
• Issued Executive Order on preventing and combating discrimination on the basis of gender identity and sexual orientation.
• OMB Directive 15 – Addressed updates to race/ethnicity categories.

Agency Transparency and Evidentiary and Legal Standards

Finally, the following addressed agency transparency and evidentiary and legal standards:

First Trump Administration

• Directive 2018-01 – Required OFCCP to provide contractors with a Predetermination Notice before issuing a Notice of Violations finding that the employer engaged in individual or systemic discrimination.
• Directive 2018-04 – Established focused reviews specific to only one of the three areas of affirmative action—EO 11246 (women and minorities) compliance, VEVRAA (protected veterans) compliance, and Section 503 (individuals with disabilities) compliance.
• Directive 2018-05 – Established the methodology used by OFCCP in evaluating employer pay practices for equal employment opportunity and transparency requirements for any preliminary findings made by the Agency.
• Directive 2018-06 – Established a recognition program for employers with exemplary compliance programs, and actually conducting focused reviews.
• Directive 2018-08 – Established protocols and transparency in how OFCCP conducts its compliance reviews.
• Directive 2019-01 – Emphasized efficiency of OFCCP compliance reviews over Obama administration’s Active Case Enforcement, which emphasized complete and thorough reviews of every aspect of contractor compliance.
• Directive 2019-02 – Established protocols for early resolution of contractor compliance reviews.
• Directive 2020-02 – Created additional efficiencies that allow quicker processing and resolution of employer compliance evaluations.
• Directive 2021-02 – Documented OFCCP’s commitment to certainty initiatives and principles.
• Issued a Contractor Bill of Rights.
• Issued Final Rule establishing specific evidentiary and legal standards in OFCCP’s compliance reviews and formalizing the use of Predetermination Notices that indicated the evidence and follow the established legal and evidentiary standards before any issuance of a Notice of Violations.

Biden Administration

• Directive 2022-02 – Created more flexibility in how OFCCP conducts its compliance reviews, rescinding and replacing Directives 2018-06, 2018-08, 2020-02, and 2021-02.
• Issued Final Rule removing the evidentiary and legal standards established in the Final Rule promulgated under the prior Trump administration and rescinding Directive 2018-01.
• Directive 2024-01 – Maintained and modified OFCCP’s early resolution procedures and replaced Directive 2019-02.
• Adopted a new scheduling letter for service and supply compliance reviews that returned emphasis on “full” audits, requiring significant increase in technical compliance documentation as part of a contractor’s initial desk audit submission.
• Focused on the use of artificial intelligence (“AI”) in recruiting and selection decisions including adding a new itemized listing in its compliance review scheduling letter.
• Emphasized construction contractor compliance:
  • Adopted a new scheduling letter.
  • Scheduled more construction contractor compliance reviews.
  • Developed guide regarding harassment in the construction industry.
  • Reinstated monthly construction contractor utilization report.
• Did not schedule focused reviews, although it didn’t rescind Directive 2018-04. But reference to focused reviews was removed from OFCCP’s Federal Contractor Compliance Manual (“FCCM”).

Administration Continuity

The following areas saw continuity between the two administrations:

• Directive 2018-07 – Established portal requiring federal contractors to certify preparation of their annual affirmative action plans.
• Directives 2018-08 and 2020-04 – Established ombuds service at OFCCP
• General approach to regression analysis of contractor pay data during compliance reviews.
• Directive 2019-03 – Established OFCCP’s commitment to compliance assistance via a Help Desk and Opinion Letters
• Directive 2020-03 – Allowed mediation before referring a matter to the Department of Labor’s Solicitor’s office.

As a general proposition, management of the Department of Labor and especially OFCCP were driven by relatively progressive Republicans during the first Trump administration. There also has been pragmatism and a general moderate approach to the Department and Agency during Biden’s term. These last two terms represent arguably a high mark of continuity among administrations of opposite parties. And yet the above list of initiatives shows that even during these last two terms of general moderation there has been quite a bit of activity and change in how the Agency is run and the standards applied to employers.

This perhaps offers some perspective on the potential breadth and scope of change if the incoming Trump team pursues a more aggressive and ideological approach to the agencies and the laws that they oversee and enforce.

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.