Despite a global pandemic, the Office of Federal Contract Compliance Programs (OFCCP) kept an unrelenting pace of activity in 2020. Below are the highlights from the year, and a summary of what federal contractors and subcontractors need to know.
On his first day in office, President Joseph Biden revoked the Trump administration’s Executive Order (EO) 13950 that restricts the content of certain diversity-related workplace trainings. The EO, which President Trump signed on September 22, 2020, had set out to prohibit government contractors from using “any workplace training that inculcates in its employees any form of race or sex stereotyping or any form of race or sex scapegoating.” On December 22, 2020, the United States District Court for the Northern District of California had issued a nationwide preliminary injunction, holding that the plaintiffs had demonstrated (among other things) a sufficient likelihood of success on their claims that EO 13950 is unconstitutional on its face.
OFCCP’s Fiscal Year 2020 Non-Financial Conciliation Agreements: A Review of the Past to Prepare for the Present and Future
While the majority of the compliance and focused reviews that the Office of Federal Contract Compliance Programs (OFCCP) initiates result in closure letters and notices of compliance, some result in conciliation agreements entered into between contractors and the agency. These agreements are formal and signed by a contractor’s top official who identifies affirmative action compliance violations and details the contractor’s specific remedies. In fiscal year (FY) 2020, OFCCP entered into 75 nonfinancial conciliation agreements—which is a decrease from 88 in 2019. The most common issues addressed in these agreements were related to outreach and recruitment, recordkeeping, and job postings.
On September 30, 2020, the California governor signed Senate Bill 973 into law. The bill states that while “progress [has been] made in California in recent years to strengthen California’s equal pay laws,” there is still a gender pay gap. Moreover, according to the bill, the pay gap is even greater for women of color. To address these issues, the law requires pay data reports from covered employers. In addition, the law delegates powers relating to the new pay data reporting requirement to the California Department of Fair Employment and Housing. According to the new law, covered employers must file pay data reports no later than March 31, 2021, and on or before every March 31 thereafter.
OFCCP recently announced that a number of supply and service contractor establishments would be scheduled for compliance reviews. Of these, OFCCP identified 1,000 as promotions and accommodations focused reviews (i.e., 500 promotions focused reviews and 500 accommodations focused reviews). On September 23, 2020, the agency published separate landing pages—with a variety of resources and more to come—that will assist covered contractors in preparing for and responding to these reviews.
On September 11, 2020, OFCCP published a Corporate Scheduling Announcement List (CSAL) of “Supply & Service” contractors and subcontractors. For the first time, the agency published a CSAL of construction contractors identified for potential compliance evaluations to its Freedom of Information Act Library. The CSAL, according to OFCCP, provides advance notice to contractors and subcontractors that they have been selected for compliance evaluations. In addition, the CSAL alerts federal contractors and subcontractors that they can take advantage of OFCCP compliance assistance offerings.
On August 4, 2020, OFCCP notified contractors that those on the CSAL list can soon expect compliance reviews focused solely on the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA) regulations. OFCCP had previously released its 2019 CSAL supplement, identifying 500 contractor establishment locations for future VEVRAA focused reviews. OFCCP’s VEVRAA landing page offers a number of compliance assistance resources for contractors.
Congress exempted federal contractors who enter into agreements with the U.S. Department of Veterans Affairs (VA) from the jurisdiction of OFCCP. This exemption operates in the same manner as the TRICARE moratorium in Directive 2014-01. On July 2, 2020, OFCCP released the final rule on “Affirmative Action and Nondiscrimination Obligations of Federal Contractors and Subcontractors: TRICARE Providers,” which made the TRICARE moratorium permanent. With this final rule, federal contractors cannot rely on Section 107 of the VA MISSION Act to claim that they do not fall under OFCCP jurisdiction; instead, contractors may need to examine other factors besides just the statutory language of the VA MISSION Act to determine OFCCP jurisdiction.
On May 8, 2020, OFCCP announced that the deadline for federal contractors and subcontractors to implement a new disability self-identification form was August 4, 2020. The form was for contractors to use when soliciting disability status from applicants and employees. Previously, the Office of Management and Budget approved a revised self-identification form that OFCCP had first proposed in October 2019. The implementation deadline was purportedly to give contractors time to incorporate the revised disability form into their electronic systems.
In the spring of 2020, OFCCP announced the VEVRAA hiring benchmark for 2020. Effective March 31, 2020, the hiring benchmark was 5.7 percent. This is down from 5.9 percent in 2019 and marked the sixth reduction of the benchmark since 2014.
In March 2020, OFCCP announced a national interest exemption in response to the COVID-19 pandemic to new supply and service and construction contracts entered into from March 17, 2020, through June 17, 2020. The exemption allows a modification to the equal opportunity clauses, relieving contractors and subcontractors from their affirmative action obligations, for covered contracts.