Federal Government Contractor Update

OFCCP has been active recently, making two notable changes that will impact federal government contractors.

Modified Scheduling Letter & Itemized Listing

First, OFCCP announced that it modified its existing Scheduling Letter and Itemized Listing effective August 24, 2023. These are the documents OFCCP uses to notify a contractor it has been selected for audit and to describe the documentation and information the contractor must furnish to the OFCCP. The new Scheduling Letter and Itemized Listing are available on the DOL website.

OFCCP chose not to adopt these revisions through a formal rulemaking process. It expects most contractors simply to comply with the new instructions; however, contractors who receive such notices may consider whether to challenge OFCCP’s authority to adopt these revisions without formal rulemaking.

The changes to the Scheduling Letter and Itemized List are significant. A redline comparison of the changes is available here. Among the changes:

• The scope of the audit is expanded from a single AAP establishment to all “campuses, schools, programs, buildings, departments, or other parts of your institution” located within the same city for all post-secondary institutions and contractors with campus-like settings, even if those different units have separate AAPs;
• The prior “encouragement” to submit files electronically is replaced by a “request” to submit them electronically, either by email or through the Department of Labor’s secure file sharing service;
• Information requested in the Itemized Listing must be submitted within 30 days of receipt of the Scheduling Letter;
• The Itemized Listing directs contractors to provide additional “documentation”:
  • demonstrating development and execution of action-oriented programs to correct any “problem areas” with respect to women and minorities in any employment process (41 CFR § 60-2.17(b)-(c));
  • of all outreach and recruitment activities for individuals with disabilities and protected veterans, the contractor’s assessments of the effectiveness of each effort and of the totality of all its efforts, and (if not effective) detailed documentation of identification and implementation of alternative efforts;
  • of all assessments of existing outreach efforts and development of new efforts, whenever utilization of individuals with disabilities or the hiring benchmark for protected veterans is below the applicable goal or benchmark;
  • of policies and practices related to promotion decisions;
  • of EEO policies and policies “on employment agreements” that impact EEO rights and complaint processes (such as policies regarding arbitration agreements); and
  • that contractor has satisfied its obligation to evaluate its compensation systems, with a detailed description of its most recent compensation analysis.
• The Itemized Listing also requires disclosure of:
  • the total number of employees, by gender and race/ethnicity, as of the start of the immediately preceding AAP year, by job title or job group;
  • actual number of total placements (hires plus promotions) and total minority and/or female placements for each job group with a placement goal;
  • compensation data for all employees as of a second snapshot date (originally, as of the date of the current AAP’s organizational display or workforce analysis; adding as of the date of the prior year’s organization display or workforce analysis); and
  • policies, practices, or systems used to recruit, screen, and hire applicants, including the use of artificial intelligence, algorithms, automated systems, or other technology-based selection procedures.

Contractors who comply with these revised instructions should expect an increased cost to respond to the modified Scheduling Letter.

Modified Pre-Determination Notice (PDN), Notice of Violation (NOV), and Conciliation Procedures

In 2020, OFCCP adopted new rules that outlined certain evidentiary standards the OFCCP would follow when issuing a PDN or NOV to a contractor and otherwise prescribed some procedural rules OFCCP would follow. OFCCP has now adopted new rules that largely eviscerate those 2020 standards and procedures. For example, OFCCP claims the “qualitative” and “quantitative” evidentiary standards it adopted in 2020 are unworkable in practice, so the 2023 rules returns to “more flexible” evidentiary standards “consistent with Title VII….”

OFCCP has published a “crosswalk” that identifies how the new 2023 rule modifies the 2020 rule.