Carla Irwin & Associates
Minor Changes from OFCCP on the “Revised” Scheduling Letter and Itemized Listing  

imageOn September 28, 2011 the Office of Federal Contract Compliance Programs (OFCCP) submitted to the Office of Management and Budget (OMB) its “revised” scheduling letter and itemized listing with minor changes to the original submission in May. Contractors will once again have 30 days to submit comments before OMB gives final approval. Until final approval is given, the OFCCP is using the current scheduling letter.

As important as the proposed Itemized Listing is, it is the supporting statement they submitted that provides the rationale for their revisions or lack thereof. To get a sense of the mindset of the OFCCP here is a quote:

“OFCCP seriously considered the comments we received and the calculation of burden that our proposed changes would create for contractors. After doing so, we determined that the benefits associated with received improved data from contractors and the net reduction of 1.34 hours in the total burden hours spent by contractors in supplying the OFCCP with that data are the best most innovated and least burdensome tasks for achieving regulatory ends.

Moreover, our assessment finds societal benefits result from finalizing the proposed changes to the Scheduling Letter and Itemized Listing Among them are the:

  • Inclusion of more qualified workers in the nation’s workforce,

  • Ability to provide America’s returning veterans and wounded warriors meaningful employment opportunities as they transition from the military,

  • Opportunity to develop a workforce that reflects the diversity of the nation, and

  • Strengthening of our ability to compete effectively in a global economy based on the diversity and skill of America’s workforce.”

Now that you understand that regardless your concerns regarding burden the OFCCP is going to move forward as originally planned, let’s discuss what is in store for contractors at the desk audit stage upon final approval.

Employment Leave Policies
First, is the request of your employment leave policies including, but not limited to FMLA, pregnancy leave, sick leave, medical leave, personal leave, religious and holiday observances and any other leaves of absence. OFCCP is not requiring contractors to create policies where they do not exist but to submit existing policies. Contractors are also given the option to submit the entire employee handbook or manual.

Suggested Preparation: Dust off your HR policies and have them reviewed and/or created.

Collective Bargaining Agreements
Second, for those in a union environment, the OFCCP is requesting “any other documents you prepared, such as policy statements, employee notices or handbooks, etc. that implement, explain or elaborate on the provisions of the collective bargaining agreement.”

Suggested Preparation: Like the HR policies we discussed above review and update as needed.

Employment Activity
Third, and this one is a big one, the OFCCP is proposing the submission of employment activity data (applicant, hire, terminations and promotions) 1) by both job group and job title 2) by individual race/ethnicity categories and 3) for promotions and terminations, to include candidate “pools” by job title and job group. In addition with regard to applicants OFCCP is requesting for each job group and job title numbers of unknown applicants. With regard to terminations, identify voluntary and involuntary by job title and job group.

OFCCP responds to this increased request by stating “that obtaining data by job group and job title will decrease a contractor’s ability to mask discrimination by manipulating the data within either job groups or job titles.” Contractors in the initial comments argued that collection by job title could produce small sample sizes skewing statistical results. The OFCCP responded by saying “Even where a job title has insufficient data to test for statistical significance, there may be enough data to suggest potential discrimination.”

When OFCCP shifted their audit strategy from Active Case Management to Active Case Enforcement at the beginning of this year, they stated that indicators of discrimination would include both individual and class (two or more). That individual analysis will be much easier with the additional information they are requesting.

Suggested Preparation: During your annual AAP process, analyze data by all permutations stated above.

Compensation Data
Fourth, and one of the most controversial, are the changes to the compensation request. OFCCP is requesting employee level data as of February 1st for all employees, including but not limited to full-time, part-time, contract, per diem or day labor and temporary. Data points include gender, race/ethnicity, hire date, job title, EEO-1 Category, job group and compensation (including base salary, wage rate and hours worked). Where applicable submit by employee “other compensation or adjustments to salary such as bonuses, incentives, commissions, merit increases, locality pay or overtime”. Also OFCCP states contracts “should” submit by employee “other compensation or adjustments to salary such as bonuses, incentives, commissions, merit increases, locality pay or overtime”. In addition you can choose to provide any additional data factors, documentation and policies related to compensation practices.

Contractors raised concerns about the February 1st date because it doesn’t take into consideration the employer’s AAP start date. OFCCP states they “selected this date because we believe it is less burdensome for contractors if relevant compensation information is already available, in whole or in part, for tax purposes.” It will be interesting to see guidance from the OFCCP on this issue because the AAP workforce snapshop used in producing the plan will not match the compensation data from February 1st unless your AAP start date is February 1st.

Contractors also commented on the definition of “employee” arguing that the OFCCP expanded it by including contract, per diem and day labor. OFCCP responded by saying that sub-regulatory guidance defines employee broadly enough to include full-time, part-time and temporary employees. Therefore, “The proposed language in Item 12 does not change this longstanding requirement. Item 12 does, however, seek compensation data for “contract, per diem, or day laborers as categories of temporary employees on the contractor’s payroll. This is not an expansion but a clarification of covered employees for reporting compensation data that supports enhanced data analysis.”

As an added note, the Department of Labor recently signed a memorandum of understanding with the Internal Revenue Service (IRS) to share information and help end misclassification of employees.

Suggested Preparation: The OFCCP has put increasing focus on compensation over the past few years and so should contractors. Conduct compensation analyses, understand and account for factors that impact pay and analyze status under Fair Labor Standards Act (FLSA).

503/4212 Supporting Documents
Lastly, OFCCP is requesting two years of your VETS-100 and/or 100A forms and copies of your accommodations policies and records of accommodations. This is one area that the OFCCP did make a change from the May version, initially they asked for three years and changed due to the conflicting record retention requirements for the VETS-100 and 100A reports.

Contractors expressed concern that providing records of accommodations may violate the employee’s right to privacy. The OFCCP responded by saying the request is not for “personal information on individuals requesting accommodation; however, it does seek records of accommodations…” Another concern from contractors was the tracking and reporting of accommodations requiring the burden of the development of an automated process into their existing HR systems. OFCCP was quick to point out that “it currently requires federal contractors to maintain records of requests for reasonable accommodations.” Therefore not additional burden is imposed on contractors.

Suggested Preparation: Review your accommodations policy and tracking procedures. Communicate and train HR, mangers and employees.