OFCCP Audit

OFCCP Requests Additional Compensation Information in Desk Audit Follow-Up

Since the announcement of Directive 307 there has been much speculation about how the OFCCP will audit compensation during a compliance evaluation. Nearly two months after the announcement (and a second wave of CSAL notifications) we are beginning to see some of the OFCCP’s direction through follow-up letters at the Desk Audit phase.

In a recent Desk Audit, the auditor called the contractor and requested additional compensation information.  During the call the auditor asked about the contractor’s compensation practices, the factors that lead to compensation decisions and classifications, as well as, what the contractor considered total compensation (e.g. overtime, commissions, etc.). Shortly after the call, the contractor received a follow-up letter from the auditor requesting that they submit the additional data discussed during the call.  In addition to data, the OFCCP also requested information about the contractor’s compensation policies, guidelines, grading systems, and, internal compensation audits as required in CFR 60-2.17 (b) (3).

Below is an excerpt from that follow-up letter showing the additional information requested by the OFCCP:

  1. Unique Employee ID number
  2. Gender [1]
  3. Race/Ethnicity [2]
  4. Job Title
  5. Grade
  6. Level
  7. Department
  8. Date of hire (mm/dd/yyyy)
  9. Date of last change in grade/job title (mm/dd/yyyy)
  10. Part-time vs. full-time status for all employees
  11. Exempt vs. non-exempt status
  12. Location
  13. Years of relevant experience
  14. Highest degree attained
  15. Year in which highest degree attained
  16. Rating received at most recent performance evaluation
  17. Market reference system used for the different salaries
  18. Annual base salary or hourly wage for full-time employees during the review period [3]
  19. Hourly wage and number of hours worked during the review period for part-time employees [4]
  20. Other paid allowance, if any, such as commission pay, overtime pay, bonus pay or shift differential [5]. Report each allowance in separate data columns.
  21. SSEG’s if developed [6]

Please also provide:

22. A copy of any/all compensation policies and guidelines including but not limited to:
a.  Policies or guidelines for annual performance appraisals, promotions and bonuses

23. A detailed written explanations of grade and level systems

In addition, we are requesting any internal compensation audits you have performed as stated in CFR 60-2.17 (b) (3) and a list of all individuals involved in the compensation process. Furthermore, please provide any additional information that you feel may better explain your company’s compensation system including other factors that influence compensation.

At this stage of the investigation, OFCCP’s goal is to better understand your company’s compensation practices. Therefore, if any of the items requested above are not readily available, please contact us to discuss the specifics of the situation so that the best available information and data is provided in a timely manner.

[1]  If gender is recorded using alpha or numeric codes, provide code definitions.
[2] If race/ethnicity is recorded using alpha or numeric codes, provide code definitions.
[3l Compensation  is reported for all full-time employees, including those on sales commission only. Compensation should be reported as base annual salary (excluding bonus and fringe benefits) or hourly pay rate.
[4] Compensation  for part-time employees should be reported as an hourly wage.
[5] Shift information  is requested to determine whether employees receive pay differentials dependent on shift worked. If an employee works rotating shifts, information  on hours worked in each shift should be submitted.  Shift differential should be reported separately from the base annual pay or hourly rate.
[6] SSEG refers to “similarly situated employee groups”

If you have questions…

If you have questions about Compensation Directive 307  or are facing an OFCCP audit, contact us.
We’re happy to help.

Additional Resources:

How Does the OFCCP Select a Federal Contractor’s Establishment for a Compliance Evaluation?

 

One of the most common questions from federal contractors is, “How does the OFCCP select a federal contractor’s establishment for a compliance evaluation?”

In a nutshell, the OFCCP uses a facially neutral selection system called the FCSS (Federal Contractor Selection System).  This electronic selection system uses data feeds from several information sources including EEO-1, federal procurement databases, Dun & Bradstreet data and more.  Once the data is in the system, the National Office of the OFCCP organizes the data in an orderly and neutral fashion and houses locations selected for evaluation within the system.  At selected intervals (typically October and May/June) contractor locations are released by the FCSS and district offices are responsible for scheduling the compliance review.

To learn more about the OFCCP’s FCSS click on the following link:  http://www.dol.gov/ofccp/regs/compliance/faqs/fcssfaqs.htm

Affirmative Action Plans: What You Need to Know (Part 2)

This is the second in the two-part series Affirmative Action Plans: What You Need to Know. Last week we looked at ways to streamline the AAP development process. Today’s post will share tips to increase the likelihood of prevailing unscathed (or at least within tolerances) in the event of a government audit.

Audit Tips for Savvy Federal Contractor

The Office of Federal Contract Compliance Programs (OFCCP) has increased the number of audits it conducts by implementing shorter (sometimes as short as 15-20 minutes) audits called “desk audits.” If everything is satisfactory in a desk audit, the proceedings do not grow into a potentially more costly and time-consuming on-site or off-site audit. The goal of any organization is to provide the OFCCP with enough satisfactory information to get a representative to leave after the desk audit. To this end the following tips have been provided:

  • Prepare a professional/professional-looking plan. 

Although this may seem superficial, the number one way to increase your organization’s odds of ending the audit with the desk audit is to provide the OFCCP with a professional, and professional-looking, AAP. It shows the auditor that your organization takes its responsibilities seriously. It also helps if the plan itself is dust-free and appears to have been “used.”

  • Analyze your data prior to the OFCCP.

Much like regularly scheduled check ups can help to protect against disease, regular evaluations of your organization’s hiring, promotional, termination, and compensation practices can help to avoid costly litigation and/or conciliation agreements. These types of analyses become even more important in tougher economic times when large class-action lawsuits proliferate due to lay-offs.

  • Prepare an action plan for any/all audits.

If your organization has prepared a professional plan, ensured its data is accurate, and analyzed the data to know in advance what the OFCCP will see, then all that’s left is to develop an audit strategy. Should your organization adopt a hard stance? If the OFCCP presses a conciliation agreement, should your organization fight or would it be cheaper and easier to concede? What precedent is set if your organization concedes? These and many other considerations should be discussed prior to the audit.

As always, if you have any questions about the above OFCCP audit tips or the AAP development process, please let us know. Also, be sure to check out the affirmative action planning webinars and resources at www.BCGInstitute.org  – our online HR EEO training community.

[Read part 1 of Affirmative Action Planning: What You Need to Know]

Preparing for an OFCCP Audit

Join us for a Webinar on February 29th.

BCGi, the EEO HR training arm of Biddle Consulting Group, will be presenting an important webinar on OFCCP audit preparation. With the ever changing landscape of OFCCP audits, it has become more and more difficult for Federal contractors to understand how to assemble their AAP for audit submittal. It is critical that contractors understand how to reduce their exposure to the OFCCP through legitimate means by analyzing the right data in their AAP and submitting the appropriate information during a desk audit.

Join the BCG consulting team of Fe Ramos and Mike Bostick on February 29th as we navigate the do’s and dont’s of desk audit submittals.

Space is limited. Reserve your free webinar seat now at:
http://www.bcginstitute.org/events/event_details.asp?id=217021

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