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OFCCP Seeks The “Carrot” Approach With Two Contractor Recognition Programs

Quick Hit: The Office of Federal Contractor Compliance Programs (“OFCCP”) is seeking to establish two new contractor recognition programs, which would promote contractors with sound compliance programs and provide temporary relief from compliance reviews and desk audits. First, OFCCP has proposed an Excellence in Disability Inclusion Award (the “Disability Inclusion Award”), which aims to “highlight successful practices and strategies of contractors that have expanded and improved recruitment, hiring, retention, and promotion opportunities for individuals with disabilities.”

Second, the OFCCP announced a new Leadership in Equal Access and Diversity Award (the “LEAD Award”), which “recognize[s] contractor best practices in comprehensive equal employment opportunity and nondiscrimination programs” by identifying “contractors that go above and beyond in creating and implementing programs of inclusion and fair treatment in the workplace, regardless of race, color, sex, sexual orientation, gender identity, religion, national origin, disability, or status as a protected veteran, and recognize the importance of fairness in compensation practices and pay transparency.”

The proposals provide that awardees of the Disability Inclusion Award and LEAD Award will receive a two and three year moratorium, respectively, from scheduled compliance evaluations. Both Awards must be approved by the Office of Management and Budget (“OMB”) and are open for notice and comment through December 4, 2018 for the Disability Inclusion Award and December 18, 2018 for the LEAD Award.

Key Takeaways: In proposing the Awards, OFCCP is seeking to provide contractors with an incentive to implement innovative diversity and inclusion programs in their workplaces. Although providing proverbial carrots to encourage compliance is a welcome approach, the burden associated with applying for the awards appears likely to undermine the awards’ purpose. To be considered for either award, contractors will have to submit to an application process which will demand significant amounts of information and specific future commitments if they receive an award. Additionally, the LEAD Award requires that awardees undergo a compliance evaluation prior to receiving the award if the contractor has not undergone a desk audit in the past two years.

Thus, while the programs seem like a step in the right direction, the programs may not provide sufficient incentive for contractors to engage in creative diversity and inclusion programs. Contractors may view the burden associated with applying for such awards as not being worth the effort, particularly given the small number of awards that OFCCP plans to issue each year. Given that the OFCCP’s planned Affirmative Action Verification Program  would reduce the likelihood compliant contractors will subject to a compliance evaluation, many contractors may find the burden of the awards process outweighs the potential benefit of receiving an award.

That being said, contractors that pride themselves on creating and implementing creative diversity and inclusion programs will likely find the prospect of obtaining an award from OFCCP to be a valuable and effective way to demonstrate to the community their commitment to diversity and inclusion.

More Detail:

Excellence in Disability Inclusion Award

On October 5, 2018, the OFCCP announced its desire to offer the Excellence in Disability Inclusion Award (the “Disability Inclusion Award”) in order to encourage contractors to focus on disability inclusion efforts. The initiative is proposed as part of a partnership between OFCCP and the Office of Disability Employment Policy (“ODEP”). According to OFCCP’s announcement, “OFCCP and ODEP seek to recognize contractors that are going above and beyond to foster employment opportunities for individuals with disabilities.” Recipients of the Disability Inclusion Award would be provided a two-year moratorium on compliance evaluations.

OFCCP’s proposal, which is subject to approval by the OMB, sets forth various prerequisites for the Disability Inclusion Award. To be considered for the Disability Inclusion Award, contractors must:

1. Have current Affirmative Action Programs (“AAPs”) for women and minorities, veterans and individuals with disabilities;

2. Have active equal employment opportunity and affirmative action programs;

3. Have no unresolved violations of Section 503, Executive Order 11246 or the Vietnam Era Veterans’ Readjustment Assistance Act (“VEVRAA”);

4. Have no adverse decisions by a court, Administrative Review Board, or Administrative Law Judge related to violations of Section 503 and Executive Order 11246, VEVRAA, or the Americans with Disabilities Act (“ADA”);

5. Not be covered by another OFCCP compliance evaluation moratorium; and

6. Not have received a Disability Inclusion Award in the past two years.

To apply for a Disability Inclusion Award, contractors must submit a detailed application to the OFCCP containing:

1. Specific information about the contractor and its compliance programs;

2. A statement of support (subject to specific criteria) from the contractor’s CEO or President and the contractor’s highest ranking executive responsible for overseeing the contractor’s Equal Employment Opportunity/Affirmative Action (“EEO/AA”) Program, containing a number of commitments and certifications including:

  • Agreement to participate in a public service announcement “on the importance of contractor compliance with OFCCP’s regulations and that generally aligns with ODEP’s broad goal of developing and validating policy strategies and effective practices for increasing employment opportunities for individuals with disabilities”:;
  • Acknowledgment “that the nominated contractor establishment, if selected for an award, will work with OFCCP and ODEP in a peer-to-peer mentoring program to support contractors as they seek to comply with OFCCP regulations”;
  • Agreement to “develop and/or provide input into the development of technical assistance, outreach, and model practices for use by other employers, including federal contractors, as a part of the compliance and technical assistance programs offered by OFCCP and ODEP”; and
  • Certification “that the nominated contractor establishment is currently in compliance with its Section 503 and EO 11246 obligations, and VEVRAA if applicable, and has no unresolved (i.e., violations that are in litigation, violations in an open conciliation agreement, and violations in a pending compliance review) OFCCP violations”.

3. A statement of support (subject to specific criteria) from at least two job applicants or employees who directly benefited from the contractor’s diversity inclusion program or initiative;

4. A copy of the contractor’s current AAP for individuals with disabilities;

5. Specified data from the previous two AAP years relating to the contractor’s outreach efforts, utilization analyses, computation supporting these analyses and documentation regarding compliance efforts; and

6. A detailed description (subject to specific criteria) of the EEO/AA program or initiative that the contractor establishment implemented for individuals with disabilities.

As proposed, each year, the OFCCP will select only two small contractor awardees (100 or less employees) and two large contractor awardees (more than 100 employees).

The Disability Inclusion Award proposal is open for notice and comment through December 4, 2018. Comments may be submitted electronically at www.regulations.gov and via mail to:

Harvey D. Fort, Acting Director, Division of Policy and Program Development, Office of Federal Contract Compliance Programs, 200 Constitution Avenue NW, Room C-3325, Washington, DC 20210

Leadership in Equal Access and Diversity Award

On October 19, 2018, the OFCCP announced its partnership with the Women’s Bureau to propose the Leadership in Equal Access and Diversity Award (the “LEAD Award”). The LEAD Award, unlike the Disability Inclusion Award, is broadly focused on the full scope of a contractor’s inclusion program and practices. The LEAD Award is available to supply and service (non-construction) contractors that “have developed and successfully implemented comprehensive equal employment opportunity and nondiscrimination programs.”

The LEAD Award specifically aims to promote contractors with inclusion programs recognizing the “importance of fairness in compensation practices and pay transparency, and reflect the value of having active partnerships with community-based organizations.” Because of this, LEAD Award recipients must “must demonstrate sound policies, practices, and strategies for outreach and recruitment, hiring decisions, training and advancement, compensation, retention, and other employment activities.”

Similar to the Disability Inclusion Award, contractors must meet several eligibility requirements to qualify for a LEAD Award. A contractor must:

1.  Have current AAPs for women and minorities, veterans and individuals with disabilities;

2. Have no adverse decisions by a court, Administrative Review Board, or Administrative Law Judge related to violations of Section 503 and Executive Order 11246, VEVRAA, the ADA, Title VII related to employment discrimination, or the Equal Pay Act in the past three years;

3. Have no open conciliation agreements, consent decrees, pending litigation, or open enforcement actions for an OFCCP violation;

4. Not currently be undergoing a compliance review by OFCCP;

5. Either have undergone an OFCCP compliance evaluation within the past two years or undergo a desk audit before its selection is final;

6. Not be covered by another OFCCP compliance evaluation moratorium; and

7. Not have received a LEAD Award in the past two years.

Eligible contractors must submit an extensive nomination package to be considered for the LEAD Award, which must contain:

1. Specific information about the contractor and its compliance programs;

2. A statement of support (subject to specific criteria) from the Contractor’s CEO or President and the contractor’s highest ranking executive responsible for overseeing the contractor’s Equal Employment Opportunity/Affirmative Action (“EEO/AA”) Program, which must include the following:

  • A commitment “to develop and/or provide feedback on the development of technical assistance, outreach, best practices, and lessons learned materials for use by other employers as a part of the compliance and technical assistance programs offered by DOL’s OFCCP, and Women’s Bureau (WB) for a period not to exceed 12 months”;
  • A “certification that the nominated contractor establishment is in compliance with its EO 11246, Section 503, and VEVRAA obligations, and has no pending or open violations, open conciliation agreements, or pending litigation involving OFCCP”; and
  • A “certification that the nominated contractor establishment has no adverse decisions by a court, ARB, or ALJ for the past three years, and or is not currently under monitoring for a violation of EO 11246, Section 503, VEVRAA, discrimination under Title VII, ADA, or the Equal Pay Act”;

3.  A description (subject to specific criteria) of the structure and operation of the establishment’s EEO/AA programs, and how those programs supported compliance with EO 11246, Section 503, and VEVRAA; and

4. Copies of the establishment’s AAPs for EO 11246, Section 503, and VEVRAA for the current year and the two years prior to the application.

The OFCCP will award six LEAD Awards per year (one from each of OFCCP’s regions). After receiving the LEAD Award, contractors are obligated to participate in various programs with the OFCCP aimed at improving compliance in the contracting community. LEAD Award recipients also receive a three (3) year moratorium on compliance evaluations.

As with the Disability Inclusion Award, the LEAD Award is subject to approval by the OMB after the notice and comment period closes. Comments must be submitted no later than December 18, 2018. Comments may be submitted electronically at www.regulations.gov and via mail to:

Harvey D. Fort, Acting Director, Division of Policy and Program Development, Office of Federal Contract Compliance Programs, 200 Constitution Avenue NW, Room C-3325, Washington, DC 20210

© 2019 Proskauer Rose LLP.

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About this Author

Guy Brenner, Labor Attorney, Proskauer Rose, arbitration proceedings Lawyer
Partner

Guy Brenner is a partner in the Labor & Employment Law Department and co-head of the Non-Compete & Trade Secrets Group. He has extensive experience representing employers in both single-plaintiff and class action matters, as well as in arbitration proceedings. He also regularly assists federal government contractors with the many special employment-related compliance challenges they face.

Guy represents employers in all aspects of employment and labor litigation and counseling, with an emphasis on non-compete and trade secrets issues,...

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