OFCCP Ramps Up Compliance Reviews With Directive 2022-2
On March 31, 2022, the Office of Federal Contract Compliance Programs (OFCCP) released its second directive of the year, Directive 2022-02, entitled “Effective Compliance Evaluations and Enforcement.”
According to OFCCP, Directive 2022-02 “clarifies OFCCP’s policies regarding scheduling of contractors for compliance evaluations, including enhancing the agency’s neutral scheduling procedures to reach a broader universe of federal contractors and eliminating delays in scheduling. It also describes contractors’ obligations to provide timely submission of complete Affirmative Action Programs (AAPs) and support data, supplemental information, and access to employees, applicants, and other witnesses.”
Notably, the directive rescinds and replaces four directives from the last administration: Directive 2018-06 (“Contractor Recognition Program”), Directive 2018-08 (“Transparency in OFCCP Compliance Activities”), Directive 2020-02 (“Efficiency in Compliance Evaluations”), and Directive 2021-02 (“Certainty in OFCCP Policies and Practices”). Those directives were designed to add certainty, efficiency, recognition, and transparency for the contractor community. This action makes clear that OFCCP in the Biden administration is focused more on protecting workers’ rights than on assisting the contractor community.
Highlights of Directive 2022-02 include the following:
Multi-establishment Compliance Reviews
OFCCP is “[i]mplementing a coordinated, cross-regional approach to conducting multi-establishment compliance reviews.” If an employer has multiple establishments that are scheduled for compliance reviews, “OFCCP will coordinate evaluations of common policies and patterns across establishments.” Contractors should note that this means OFCCP’s investigations will no longer be “siloed” by AAP establishment; in fact, OFCCP will likely use this coordination effort to expand its investigations into potential discrimination or technical issues.
Elimination of Compliance Evaluation Scheduling Delays
OFCCP will no longer delay the scheduling of contractors for compliance evaluations for forty-five days after the issuance of a Corporate Scheduling Announcement List (CSAL). Effective immediately, OFCCP may begin scheduling compliance evaluations as soon as the CSAL is published. We understand that OFCCP is trying to quickly schedule and close establishments on “old” CSAL lists so that it can begin scheduling compliance evaluations using a new methodology that the agency will publish in May or June 2022. Early information suggests that contractors that do not timely certify in OFCCP’s Contractor Portal may be more likely to be scheduled for a compliance review, but it is uncertain how quickly OFCCP can identify noncompliant contractors and incorporate that information into its scheduling methodology.
Data Submission Deadline Extensions
Once a contractor receives a Scheduling Letter and Itemized Listing, it is required to submit all AAPs and itemized listing data, including support data, within thirty calendar days. OFCCP will grant extensions “on a case-by-case basis,” and only under “extraordinary circumstances,” such as the unexpected departure of a key affirmative action official. Contractors beware: extensions of time will be difficult to obtain!
Supplemental Data Requests
OFCCP “reiterate[d] its long-standing policy that the agency may request supplemental data, follow-up interviews, and/or additional records and information,” either because the contractor’s desk audit submission is incomplete or because OFCCP wants to further investigate particular issues. Directive 2022-02 states that “OFCCP will reasonably tailor the request to the areas of concern, allow contractors a reasonable time to respond, and include the basis for the request,” while also explaining in a footnote that the agency is “not obligated to share the statistical analysis during this stage.” If OFCCP finds additional issues, the “supplemental requests do not limit the agency’s ability to request additional information or expand the investigation.”
In addition, OFCCP may request a contractor’s AAPs, personnel activity, policy implementation, and supporting documentation going back two years prior to the date the contractor received the Scheduling Letter if the agency “identifies potential indicators of discrimination.” OFCCP may also request records created after the date of the Scheduling Letter to determine whether the potentially discriminatory practices have continued. We expect that contractors and OFCCP may have different perspectives about what constitutes “relevant” data in a compliance evaluation and that such disputes may result in legal challenges.
OFCCP Access Rights
OFCCP reaffirmed its right to access a contractor’s premises, records, employees, applicants, or other witnesses. Specifically, OFCCP may request “records, such as personal contact information, personnel files, and applications that will enable [the agency] to contact employees, former employees, applicants, or other witnesses” directly, without having the contractor act as an intermediary.
In addition, OFCCP will request unredacted contact information for those individuals, including telephone numbers, mailing addresses, email addresses, and Social Security numbers. In a footnote, OFCCP explained that these provisions also apply during complaint investigations.
OFCCP requests for employee information and personally identifiable information (PII) are often routine in conciliation discussions. Contractors may want to be strategic about providing such information to the agency, including communicating any concerns about the production of PII.
Representation During Interviews
OFCCP reiterated its policy that a contractor may only have an attorney or other representative present during interviews of upper-level managers and directors in their management capacities who speak for, or make decisions on behalf of, the contractor. When OFCCP is interviewing nonmanagement personnel, the contractor may not have a representative present, though the employee may request a personal representative. When OFCCP is interviewing former employees, the contractor may not have a representative present, with some exceptions. OFCCP’s historical position on representation during interviews is outlined in its Federal Contractor Compliance Manual.
OFCCP clarified that when contractors register and annually certify compliance in OFCCP’s Contractor Portal, “they are certifying that they have developed and maintained complete AAPs.” The Contractor Portal opened on March 31, 2022, and most contractors must certify compliance by June 30, 2022. Note that the actual question on the Contractor Portal is whether contractors have “developed and maintained affirmative action programs,” and does not refer to “complete” AAPs or a contractor’s compliance with an overall compliance program. We understand that OFCCP will be issuing more information about this in the near future.
Agency Policy Review
OFCCP will not review its policies and practices on an annual basis, but will instead update them “as appropriate.”
Directive 2022-02 is the latest policy change from a more aggressive and arguably less transparent OFCCP. Already this year, OFCCP has indicated that it will require contractors to produce internal pay equity audits prepared with the assistance of counsel, and it has published a notice of proposed rulemaking that would rescind portions of a 2020 rule that had set standards and criteria for OFCCP’s investigations and use of predetermination notices and notices of violation.
With this new directive, OFCCP has signaled that it will likely conduct broader, deeper, and more comprehensive audits while increasing both the time pressure and production burdens on contractors. Contractors can expect to start feeling the effects of this directive almost immediately. While OFCCP’s directive is merely subregulatory guidance, contractors may want to consider a more proactive approach to complying with the affirmative action regulations and engaging with an increasingly active, and potentially adversarial, OFCCP during compliance evaluations.