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OFCCP proposal would require contractors to submit more information, and more detailed information, at the desk audit phase of compliance reviews

June 15th, 2011  |  Cynthia L. Hackerott

The OFCCP is proposing changes that would allow the agency to seek more, and more detailed information from federal contractors during the desk audit phase of compliance evaluations, including information on FMLA, pregnancy leave and religious accommodation policies, more specific demographic information on employment decisions, more precise data for compensation analysis (aggregate data rather than the disaggregate data) and VETS-100/VETS-100A forms. A notice, published in the May 12, 2011, issue of the Federal Register (76 FR 27670-27671), indicates that the OFCCP is seeking comments on the proposal to revise its current recordkeeping, reporting and third party disclosure requirements for federal supply and service (i.e. non-construction) contractors, but the Federal Register notice itself does not indicate the content of the proposed revisions. Rather, the content of these revisions is revealed in supporting documentation for the notice provided to the Office of Management and Budget’s (OMB) by the OFCCP. The proposed revisions to the OFCCP’s scheduling letter, itemized listing and the OFCCP’s supporting statement submitted to the OMB explaining the changes are posted on the Regulations.gov website.

Revisions to scheduling Letter and itemized Listing. Once a federal contractor has been selected for an OFCCP audit, the agency sends its standard scheduling letter and corresponding itemized listing requesting the contractor to provide the OFCCP with its affirmative action programs and specified supporting documents and records. The scheduling letter and the contractor’s response to it are known collectively as the “desk audit” phase of a compliance review. If the results of the desk audit reveal “indicators” of potential discrimination or other compliance issues, the OFCCP may dispatch a compliance officer to conduct an on-site review of the contractor.

The itemized listing that accompanies the current OFCCP scheduling letter contains 11 items, and the proposal would increase this number to 13 items. According to the OFCCP’s supporting statement, the proposed revisions will reduce overall burden hours on contractors and enhance the OFCCP’s desk audit and data analysis abilities. The OFCCP states that the revisions in the body of the scheduling letter were made for clarity and do not affect overall burden hours. The changes to the itemized listing are the following:

(1) A new item 8 — submission of employment policies covering the FMLA, pregnancy leave, and accommodations for religious observances and practices. The OFCCP asserts that receipt of these policies would assist it in better determining the existence of sex or religious discrimination indicators within contractor organizations. Additionally, the policy requirements would enhance the OFCCP’s broad authority under Executive Order 11246 to prohibit sex and religious discrimination in employment and its share enforcement responsibilities with the EEOC under Title VII. 

(2) Changes to new item 9 (current item 8)  — the OFCCP states it further defined “other information” in contractor collective bargaining agreements to clarify for contractors the specific information requested during compliance evaluations. 

(3) Changes to new item 10 (current item 9) — the AAP reporting requirements would be changed from preceding year to immediate preceding year to clarify specific AAP reporting timelines for contractors. 

(4) Changes to new item 11 (current item 10) — the OFCCP states it included more specific demographic information related to applicants, hires, promotions, and terminations to eliminate ambiguous minority and non-minority terminology.  In addition, contractors would now be required to submit data by job group and job title, instead of job group or job title in the current scheduling letter. The OFCCP maintains that this revised submission would result in the OFCCP obtaining more accurate reporting data for its analyses related to identifying sex and race discrimination indicators.

(5) Changes to new item 12 (current item 11) — The changes would require a contractor to submit more precise data for the OFCCP’s compensation analysis. The more precise data is aggregate data rather than the disaggregate data requested in the current Scheduling Letter.  A submission of aggregated data would allow the OFCCP to perform more specific analyses, and pinpoint possible discrimination based on race or sex. The OFCCP states it will no longer ask for disaggregate compensation data, which required contractors to aggregate the data themselves, thereby increasing their burden. In addition, the disaggregate data was less effective in allowing the OFCCP to analyze compensation, according to the agency.

(6) New item 13 — A copy of the contractor’s Veterans’ Employment Report VETS-100 and/or VETS-100A for the last three years. These documents are required reporting for federal contractors and include information on their hiring on disabled and other protected veterans under the Vietnam Era Veterans Readjustment Assistance Act (VEVRAA).

Compliance check letter.  A compliance check is a limited purpose evaluation (i.e. perfunctory assessment) of the contractor’s establishment to determine whether the contractor has maintained certain records as required under the OFCCP’s regulations. At the contractor’s option, the documents may be provided either on-site or off-site. In the supporting statement, the OFCCP reports that it has not scheduled any compliance checks for fiscal year 2011 and notes that, consequently, the burden hours for compliance checks will be zero.

Increase in burden hours. The supporting statement details that the OFCCP is requesting OMB approval of 11,174,641 hours in combined recordkeeping, reporting and third party disclosure burden hours for compliance with Executive Order 11246 by non-construction (supply and service) federal contractors. This compares with 10,045,984 hours for the last clearance request, an increase of 1,128,657 hours. According to the OFCCP, “[t]his change is due to an increase in the number of supply and service contractors from 99,028 to 108,288 (an addition of 9,260 contractors)” and the “OFCCP used data from its Equal Employment Data System to calculate the number of Federal contractors for this Information Collection Request.”

Costs. There are no capital or start-up costs associated with this collection of information, the OFCCP asserts, because the information that contractors provide the OFCCP is generally maintained in the normal course of their businesses. The total estimated costs would be $12,610 + $46,860 + $75,802 = $135,272. 

Historical perspective. The last time the OFCCP made significant data request changes to the itemized listing was in 1999. The agency’s initial proposal in this regard was met with strong resistance by some contractors and business advocacy groups, including the National Association of Manufacturers, the U.S. Chamber of Commerce, and the Society for Human Resource Management. At that time, the OFCCP proposed changing Item 11 of the itemized listing to require contractors to require contractors to submit data on “race, gender, salary grade or salary band, job title, hire date, date in current position, and current annual salary or hourly wage rate” for all white-collar and blue-collar positions. As with the May 12, 2011, proposal, the actual proposed changes were not referenced in the Federal Register notice regarding the proposal (published on December 22, 1998 at 63 FR 70794-70795). Rather, the changes were included in the OFCCP’s Paperwork Reduction Act submission corresponding to the notice filed with the OMB.

Among other concerns, some contractors and advocates asserted that this expanded data collection would create an overwhelming burden on contractors in violation of the Paperwork Reduction Act. Many of the objecting contractors and advocates also expressed concern that if the OFCCP took this sensitive pay data off-site, the data would be potentially accessible to the public via Freedom of Information Act requests.

In response, the OFCCP revised its proposal in October 1999 (64 FR 54056) so that the itemized listing would require contractors to provide (in a manner that was most consistent with the contractors current compensation system) annualized compensation data “by either salary range, rate, grade, or level” showing the total number of employees by race and gender and total compensation by race and gender. Those changes were finalized in December 1999 and reflected in the current version of the itemized listing.

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