Federal contractors, including most banks, with at least 50 employees and at least one covered federal contract worth at least $50,000 are required to maintain and update annually written affirmative action plans (AAP) for women and minorities, persons with disabilities, and certain classes of protected veterans. The US Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) is the federal agency responsible for oversight and enforcement of federal contractors’ affirmative action obligations. As such, OFCCP maintains an ambitious and aggressive year-round schedule of compliance reviews, also known as OFCCP audits, for which contractors are selected at random. OFCCP is equally aggressive in pursuing enforcement, including actions for back pay, whenever an audit results in a finding that a violation has occurred.
At the beginning of the COVID-19 pandemic, OFCCP announced that certain federal contracts for COVID-19-related projects would be exempt from the usual federal contractor affirmative action obligations. OFCCP has taken similar action during other national emergencies such as natural disasters. However, if you are thinking OFCCP is taking a break from its regular audit and enforcement program during the pandemic, think again.
Just before the pandemic-related slowdown began, OFCCP announced a new initiative to explore how better to identify pay disparities for remediation, making it clear that ferreting out and remedying alleged compensation discrimination remains a high priority for the agency. At the same time, to get its point across, OFCCP also launched its “Contractor Compliance Institute,” a series of free courses to assist contractors in meeting their affirmative action obligations. Then immediately after the first stay-at-home orders began coming down, on March 20, OFCCP issued a broadside email to the federal contractor community (or at least to those who have signed up for OFCCP’s email notices) outlining the agency’s “COVID-19 Response.” According to the March 20 announcement, compliance reviews are continuing unabated with compliance officers teleworking and making use of all available resources and technology ranging from electronic submission of contractor data to telephonic interviews to meetings via WebEx, Skype, and similar platforms in lieu of on-site visits. A couple of weeks later, on April 2, OFCCP issued another broadside email to assure federal contractors that their data is secure. According to OFCCP, although compliance officers are working remotely, all contractor data remains stored on OFCCP’s secure network and is accessible only via government computers (for whatever that’s worth). Then just last Friday, April 17, OFCCP announced three new directives to increase accountability and efficiency in compliance reviews and enforcement. The new directives involve instructions to compliance officers to more closely monitor the status of contractors’ compliance efforts during audits, the issuance of Show Cause Notices (SCN) and referral to the Solicitor of Labor (SOL) for enforcement in denial-of-access cases (e.g., when a contractor fails to cooperate or to respond timely to an audit scheduling letter), and the establishment of a mediation program to resolve contested matters before the issuance of an SCN or referral to the SOL. In the meantime, since the COVID-19 slowdown began, OFCCP has issued at least three press releases detailing the terms of conciliation agreements with contractors resulting from OFCCP audits to resolve classwide claims of hiring discrimination for $360,000, hiring and pay discrimination for $410,000, and one huge case of alleged pay discrimination for $4.75 million. Thus, OFCCP remains very much in business.
At this time, when employers are distracted by the multitude of COVID-19-related issues, including human resources issues, it might be tempting to lay down or set aside your annual AAP update or AAP-related record keeping until the crisis passes. However, for all the above reasons, and despite the distractions, this is no time to overlook your affirmative action obligations, including ensuring your plans are updated for the current plan year. If you are selected for audit and receive an audit scheduling letter, you will have only 30 days within which to respond, and under OFCCP’s current audit protocol, extensions are no longer granted for your basic AAP data. So be warned, and be prepared.
A concluding note about EEO-1 reports: A related obligation of federal contractors is to file your annual EEO-1 report. These reports normally are due by March 31. This year, however, because the Equal Employment Opportunity Commission (EEOC) decided to discontinue Component 2, the pay data collection component, of the EEO-1 report, the due date has been postponed indefinitely pending approval of a new EEO-1 report form by the Office of Management and Budget (OMB). According to a notice posted on the EEO-1 reporting site, the EEOC will notify covered employers of the new due date as soon as the new EEO-1 report form receives final approval from OMB. Meanwhile, that’s at least one less task for federal contractors to complete, which should free up some time to ensure your AAP is up to date and audit-ready.