OFCCP’s 2015 Budget Justification and Its Effects on Enforcement

Thomas E. Perez, Secretary of Labor

Thomas E. Perez, Secretary of Labor

As federal contractors are still making systems and policy adjustments to come to a full compliance with the new requirements under the VEVRAA and Section 503 of the Rehabilitation Act of 1973 regulations, the OFCCP is also busy pushing for the implementation of all the initiatives they started under Pat Shiu’s administration.

On March 4, 2014, Labor Secretary Thomas Perez released the OFCCP’s 2015 Budget Justification document. In this document, the OFCCP requested for about $3 million budget increase and ten (10) additional full time equivalent employees (FTE’s) compared to what was appropriated for 2014. Of this requested budget and personnel increases, about $1.1 million and all 10 additional FTEs will be used to strengthen the agency’s enforcement towards gender pay discrimination. Compensation equity will remain one of the main focal issues for the OFCCP in 2015. This had become more apparent with President Obama’s signing of a new Executive Order (EO) that protects individuals from retaliation when compensation data or information is shared. The EO also calls for a notice of rulemaking for a compensation data collection tool. In addition to compensation equity reviews, the requested 2015 funding will also be used to complete 3,840 supply and service compliance evaluations and 450 construction contractor reviews in 2015.

For the current year (2014), the OFCCP enforcement efforts will focus on the following:

  1. Compensation discrimination with the intent of narrowing the pay gap between males and females
  2. Improving the efficiency and quality of compliance evaluations
  3. More focus on construction contractors
  4. Provide assistance to recruit, hire, and retain veterans and persons with disabilities
  5. Outreach to community-based organizations to provide a better understanding of the new rules
  6. Implement enterprise-wide investigative process to ensure that changes in personnel processes are implemented throughout the organization

Needless to say, unless there is a major shift of focus from the current administration, employers will continue to feel the weight of being a federal contractor. Pat Shiu had said as much in her earlier speeches – “The price of being a federal contractor had gone up.”

So, how do federal contractors prepare to ensure full compliance and a less painful, if not painless, audit experience?

Here are some recommendations:

  1. It’s not just about the right statistical process, it’s about the right data!
  2. If there is adverse impact in the initial analysis of hiring, conduct appropriate refinements to the data
  3. Collect and retain all required data
  4. Repair all inaccurate or incomplete data
  5. Analyze your data regularly throughout the year, but especially prior to submitting
  6. If impact is discovered: Can the data be refined/cleaned-up? Are you conducting the appropriate analysis? On what step in the process does the impact occur?
  7. Periodically review personnel processes and job requirements.
    • Ensure that job’s physical and mental requirements are job-related and consistent with business necessity.
  8. Document all good faith efforts
  9. Know your auditor and know his/her evaluation timeline
  10. To avoid miscommunication, ensure that all communications and/or requests from the compliance officer are in writing. Ask for clarification when necessary
  11. Train all personnel involved in any selection process to ensure consistency in the implementation of policies and procedures
  12. Keep good documentation regarding pay decisions
  13. Get help
If you’re a federal contractor with questions about developing your affirmative action plan, or need assistance with an OFCCP audit, please contact us at 800-999-0438 or email staff@biddle.com.

2013 OFCCP Budget

On Monday, February 13, 2012, DOL released the 2013 DOL Budget information, including detailed budget documentation for the OFCCP.  As evidenced through details of the budget, the OFCCP feels very confident that they will continue to expand their compliance efforts in the areas of Section 503, VEVRAA, construction and Equal Pay.  Highlights to the OFCCP’s proposed budget are found below.

FY 2013

The request for OFCCP is $106,415,000 and 755 FTE (full-time employees) to focus on three strategies:

Strategy One:

Ensuring quality evaluations by compliance officers (while increasing the overall number of evaluations)

  • At this funding level, OFCCP will complete 4,530 thorough compliance evaluations – a 12 percent increase over FY 2012 levels.
  • To increase the thoroughness and breadth of its investigative efforts, OFCCP continues to use its Active Case Enforcement (ACE) system by requiring OFCCP compliance officers to conduct thorough desk audits of all cases, increase onsite activity, and increase compliance evaluations focused specifically on Sections 503 and VEVRAA compliance. To help address the high level of unemployment among the nation’s veterans and individuals with disabilities, OFCCP will devote considerable resources to ensure that contractors recruit, hire, and retain veterans and individuals with disabilities.
  • In 2013, OFCCP anticipates continuing the effort to combat pay discrimination through increasing the number and quality of its investigations of contractor pay practices. Narrowing the persistent pay gap between men and women is a key priority for OFCCP and reflects its commitment to the work of the President’s National Equal Pay Enforcement Task Force. OFCCP will continue to refine its enforcement practices by implementing the guidance and protocols currently under development that are expected to launch in FY 2012, as well as by continuing the agency’s significant training program for compliance officers in compensation enforcement.
  • Reflecting OFCCP’s commitment to enforcing the rights of women and under-represented groups in the construction trades, OFCCP will monitor gender, racial and ethnicity-based discrimination in the construction industry. In FY 2013, OFCCP will conduct 450 construction reviews, with particular enforcement efforts directed toward Mega Projects – an 11 percent increase over FY 2012 levels. Mega Projects are defined as federal or federally-assisted construction projects that last longer than one year, and are likely to have a major employment or economic impact on a community.

Strategy Two:

Increasing the technical proficiency of OFCCP staff

  • Although OFCCP does not currently possess empirical evidence showing the causal relationship between their proposed strategies and their outcome goals, the agency has begun tracking the quality of its case audits to indicate whether investigations are timely completed and whether quality audit deficiencies decrease over time.
  • …OFCCP will focus on identifying deficiencies found in routine quality audits of closed cases as major or technical. This will allow the agency to better inform and prioritize training needs to improve the quality and consistency of compliance evaluations. OFCCP is proposing six continuing education and skills development training courses during FY 2013.
  • Eight training courses in support of the agency’s regulatory agenda will be offered in FY 2013. This training will focus on the following regulatory changes and their impact on the compliance evaluation process:
  1. Section 503;
  2. VEVRAA;
  3. construction; and
  4. sex discrimination.

Two courses will be offered in each of the aforementioned areas to ensure that all OFCCP personnel are well grounded in substantive program areas.

  • Lastly, OFCCP will offer one course aimed at managers. Potential topics include performance management, efficient use of resources, and budget-performance integration.

Strategy Three:

Expanding the knowledge base of workers and federal contractors through education and outreach

  • In FY 2013, OFCCP proposes to target its compliance assistance to achieve the greatest impact by:
  1. Emphasizing the importance of providing compliance assistance as an integral part of the compliance officer’s enforcement activities;
  2. Leveraging existing contractor networks such as Industry Liaison Groups (ILGs) and multi-establishment corporations to promote corporate-wide compliance;
  3. Focusing on contractors that largely employ at-risk populations identified through OFCCP enforcement activities;
  4. Assisting new and small contractors;
  5. Creating synergy between their rulemaking and their training and staff development agendum.

Irrespective of regulatory changes, large Federal Contractors should pay special attention to what the OFCCP refers to as, “Strategic Case Selection.” These potential enterprise-wide investigations will also be a focus in 2013.

“Strategic Case Selection – OFCCP will improve the effectiveness of the way in which the agency conducts compliance evaluations by implementing a strategic case selection process to address programmatic priorities. Under this process, OFCCP will focus its enforcement efforts on a strategic mix of compensation, hiring, VEVRAA, Section 503, and other investigations. Based on the strength of the evidence of a potential violation, the agency will identify priority cases in each of the aforementioned areas and allocate resources accordingly to resolve them.

This process will also be used to identify similar issues that arise within corporations and industries, and to identify potential cases for enterprise-wide investigations. It will also improve the effectiveness of compliance evaluations by ensuring that the agency identifies patterns of violations and non-compliance within a corporation. Enterprise-wide investigations, based on patterns of violations and identification of egregious violators, will enable the OFCCP to remedy deficiencies across an entire corporate structure, rather than one facility at a time. Coupled with a renewed collaborative enforcement approach with the Office of the Solicitor (SOL) and other Departmental agencies, this enforcement strategy will increase the rate of compliance for contractors who engage in egregious violations.”

DETAILED WORKLOAD AND PERFORMANCE The OFCCP estimates that it will increase the number of Service and Supply audits in FY 2013 but has not asked for additional staff in their budget.  In light of the pending regulatory changes in 2012/2013 and the potential additional steps the OFCCP will be required to take to satisfy their ACE procedures, it will be interesting to see how effective the OFCCP will be in achieving their goal of completing 4,000 audits in 2013.

FY 2011
Enacted
FY 2012
Enacted
FY 2013
Request
Office of Federal Contract Compliance Programs
Target
Result
Target
Target
Total Number of Compliance Evaluations Completed
3,550
4,014
3,980
4,530
Supply and Service Evaluations Completed
3,225
3,382
3,500
4,000
FAAP Supply and Service Evaluations Completed
50
82
80
80
Number of Construction Evaluations Completed
275
550
400
450
Percent of cases with major deficiencies (Quality Case Audits)
19.00%
15.00%
Percent of cases with technical deficiencies (Quality Case Audits)
40.00%
30.00%
Percent of Discrimination Cases Closed within 730 Days of Opening
55.00%
65.00%

To read the entire budget request and learn more about the strategic directives of the OFCCP, click on the following link:
http://www.dol.gov/dol/budget/2013/PDF/CBJ-2013-V2-10.pdf

Related Resource:

BCGi Webinar: 2011 in Review and OFCCP’s 2013 Proposed Budget

BCGi (Biddle Consulting Group’s Institute for Workforce Development) will be hosting a webinar highlighting and summarizing all of the changes and proposed changes made by the OFCCP in 2011.These include potential changes to compensation analyses, proposed changes to the audit letter,  VEVRAA (Vietnam Era Veterans’ Readjustment Assistance Act; Section 4212) NPRM (Notice of Proposed Rulemaking), and proposed hiring goals for individual’s with disabilities.

Please join Dr. Patrick Nooren and John Piatt, Wednesday March 7th for this free webinar.

For registration information, please visit the BCGi website today.