Employers are subject to a myriad of federal and state laws and regulations regarding non-discriminatory hiring and employment practices. In particular, federal contractors or subcontractors are subject to compliance review by the Office of Federal Contract Compliance Programs (OFCCP), part of the U.S. Department of Labor. It is designed to protect workers, promote diversity, and enforce federal laws by overseeing federal contractors and subcontractors to ensure compliance with anti-discrimination laws. However, the OFCCP is not just an enforcement entity; it also offers compliance assistance to federal contractors to help them understand the regulatory requirements and review process. In this article, we discuss what you need to know about the OFCCP.
Are You a Federal Contractor or Subcontractor?
A federal contract is any agreement between a department or agency of the federal government and any company or person for the purchase, sale, or use of goods or services. A federal subcontract is an arrangement with a federal contractor a) for the furnishing of supplies or services or for the use of real or personal property for the performance of a federal contract; or b) where a portion of the federal contractor’s obligation is performed, undertaken, or assumed by the subcontractor.
OFCCP enforces specific rules and regulations, but federal contractors must maintain some basic equal employment opportunity practices, including:
- Posting equal employment opportunity posters;
- Including the equal employment opportunity tagline in employment advertising;
- Keeping records;
- Permitting OFCCP access to books and records during a complaint investigation or compliance evaluation; and
- Filing an annual EEO-1 report.
Are You Subject to Review by OFCCP?
OFCCP conducts compliance evaluations to determine whether a federal contractor utilizes nondiscriminatory employment practices. It investigates complaints filed against federal contractors that indicate systemic discrimination and refers individual discrimination complaints to the Equal Employment Opportunity Commission (EEOC). Essentially, all federal contracts and subcontracts in excess of $10,000 are subject to regulatory requirements under one or more of the laws enforced by OFCCP. OFCCP enforces the following three laws or regulations:
- Executive Order 11246, which bars discrimination based on race, color, sex, sexual orientation, religion, national origin, or genetic identity;
- Section 503 of the Rehabilitation Act of 1973, which bars discrimination against individuals with disabilities; and
- Affirmative action provisions of the Vietnam Era Veterans’ Readjustment Assistance Act, which bars discrimination against qualified protected veterans.
The OFCCP follows a particular enforcement procedure:
- Offer compliance assistance to federal contractors;
- Conduct compliance evaluations and complaint investigations regarding federal contractors’ personnel policies and procedures;
- Secure Conciliation Agreements from contractors who violate regulatory requirements;
- Monitor contractors’ progress in fulfilling the terms of the Conciliation Agreement with compliance reports;
- Form linkage agreements between contractors and Department of Labor job training programs to help employers recruit qualified workers;
- Recommend enforcement to the Solicitor of Labor; and
- Remove (or debar) the company from federal contracts.
The OFCCP has six district offices, with South Carolina’s district office located in Columbia, SC. The district offices offer training seminars for employers to assist them in complying with OFCCP regulations.
How Do You Comply with OFCCP Requirements?
OFCCP monitors compliance with many of the rules and regulations to which federal contractors are subject. Below are some key tips on compliance.
Effective Recordkeeping System
Federal contractors must preserve complete and accurate personnel or employment records that are accessible to OFCCP for inspection and copying during a compliance evaluation or complaint investigation. Records such as job descriptions, job postings/advertisements, job offers, applications, resumes, interview notes, tests/results, written employment policies and procedures, and personnel files generally must be maintained for at least two years, or depending on the size of the company and the contract, for one year. If contractors maintain electronic recordkeeping systems, they must ensure the systems:
- Have reasonable controls to ensure the integrity, accuracy, authenticity, and reliability of the records;
- Are capable of retaining, preserving, retrieving, and reproducing the records;
- Are able to convert paper originals stored in electronic format back into legible paper copies; and
- Have adequate records management practices in place.
Executive Order 11246
EO 11246 prevents federal contractors from discriminating in employment decisions on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin. Under certain circumstances, EO 11246 prevents federal contractors from taking adverse employment actions against applicants and employees for discussing their own or other employees’ pay information. Finally, EO 11246 requires federal contractors to take affirmative action to ensure that equal opportunity is provided in all aspects of employment.
EO 11246 requires non-construction contractors/subcontractors with 50 or more employees to develop an Affirmative Action Program (AAP) within 120 days of the start of the federal contract if the company a) has a federal contract for at least $50,000; b) has government bills of lading which can reasonably be expected to total at least $50,000 in a 12 month period; c) serves as a depository of federal funds in any amount; or d) is a financial institution that is an issuing and paying agent for U.S. savings bonds and savings notes in any amount. The OFCCP offers a number of compliance assistance seminars to help companies develop AAPs. Alternatively, an experienced employment law attorney at Gignilliat, Savitz & Bettis, LLP can assist companies in developing their AAPs.
Section 503 of the Rehabilitation Act of 1973
Section 503 requires federal contractors to take affirmative action to recruit, hire, promote, and retain individuals with disabilities and prevents employers from discriminating against individuals with disabilities. Federal contractors must:
- Conduct an annual utilization analysis and assessment of problem areas and establish programs to address identified problems to reach the federally established goal of 7% utilization for qualified individuals with disabilities;
- Document and update annual comparisons for the number of individuals with disabilities who apply for jobs and those whom they hire;
- Invite applicants to self-identify as individuals with disabilities at pre- and post-offer phases of the application process using language recommended by OFCCP;
- Invite employees every five years to self-identify as individuals with disabilities using language recommended by OFCCP; and
- Allow OFCCP to review documents related to a compliance check or focused review and inform OFCCP of all formats in which it maintains its records.
Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA)
The VEVRAA prohibits federal contractors and subcontractors from discrimination in employment against protected veterans. It also requires covered employers to take affirmative action to recruit, hire, promote, and retain veterans. Federal contractors and subcontractors with contracts for $100,000 or more must comply with VEVRAA’s requirements, which include:
- Establishment of annual hiring benchmarks;
- Collection of data concerning the number of veterans who apply for jobs and who are hired;
- Invite applicants to self-identify as protected veterans both before and after an offer of employment;
- Include equal opportunity language in subcontracts; and
- Maintain and provide the OFCCP with access to compliance records.
Companies or individuals who do business with the federal government are subject to a myriad of rules and regulations for compliance, including regular reporting requirements, notice requirements, procedure, policy and practice requirements, and posting requirements. If you contract or do business with the federal government, or are unsure whether you qualify as a federal contractor, contact our experienced employment lawyers at Gignilliat, Savitz & Bettis, LLP for a review of your circumstances, practices, policies, and procedures.