The federal Labor Department’s Office of Federal Contract Compliance Programs (“OFCCP”) recently issued a directive serving notice that they are increasing their efforts to monitor and ensure that contractors are fulfilling their affirmative action obligations.
The OFCCP, a division of the U.S. Department of Labor, enforces a number of laws and executive orders that collectively prohibit federal contracts and subcontractors from discriminating on the basis of race, color, religion, sex, sexual orientation, gender identity, national origin, disability, or veteran status. The OFCCP requires federal contractors to take affirmative steps to ensure that equal employment opportunity exists in their employment processes.
Annual Compliance/AAP’s
The OFCCP requires businesses with 50 or more employees working on government contracts valued at $50,000 or more to develop and maintain an Affirmative Action Plan (“AAP”). The AAP must be customized to reflect the individual employers’ organizational structure, policies, practices, programs, and data. Contractors must develop the AAP within 120 day of being awarded the contract, and must update their plans annually.
Drafting and updating an AAP can be an extensive and painstaking endeavor. As part of developing and updating an AAP the contractor must conduct an in-depth statistical analysis of their work force to evaluate whether potential statistical disparities exist, and then develop specific action plans to ensure that they are in fact providing equal employment opportunities for applicants and employees. The OFCCP then conducts audits to determine if contractors have developed suitable plans.
OFCCP Plans to Step Up Enforcement Efforts
Despite the express requirement to develop and maintain an AAP, the OFCCP’s Directive notes that contractors as a group have been woefully failing in their obligations, with “close to 85 percent of contractor establishments” failing to timely submit a written AAP as required. Because there are so many organizations subject to the AAP requirement – the OFCCP currently estimates that over 120,000 contractor establishments and approximately 24,000 firms or parent companies are subject to its jurisdiction – the OFCCP has only been able to schedule a small portion of these establishments for annual compliance evaluations.
In light of this, the OFCCP has begun the process of developing a program to verify and ensure that all contractors comply with their AAP obligations. While they have not yet gone so far as to require the annual submission of AAP’s for review, the OFCCP’s Directive states that they will begin to develop policies to increase participation, including requiring contractors to submit annual verifications that they have complied with their AAP obligations. The OFCCP further noted that the failure to submit an annual certification will be used as a criterion in selecting which organizations will be selected for a full compliance audit.
While nothing has changed in the OFCCP’s enforcement policies and procedures yet, the Directive signals that they are beginning to take proactive steps to increase monitoring and to ensure that contractors are actually complying with their legal obligations.
Bottom Line
Federal contractors should view this as a sign that it may be time to evaluate your affirmative action obligations, including the requirement to review and update your AAP’s annually. Why not take action now so that you are ready if and when the OFCCP comes knocking on your door?