by David Morgan & Joanna Colosimo, DCI Consulting Group

William E. Doyle, Jr. at Morgan, Lewis & Bockius LLP presented on recent developments related to OFCCP and diversity at the Washington Metro Industry Liaison Group (WMILG) meeting, on August 26, 2010. Among the topics discussed were the ANPRM to update regulations under Section 503 of the Rehabilitation Act, the new FAR rule requiring reports on subcontractors, recent developments surrounding OFCCP enforcement of non-discrimination with respect to compensation, and Section 342 of the Dodd Frank Wall Street Reform and Consumer Protection Act. Some important highlights are as follows:

ANPRM to update regulations under Section 503 of the Rehabilitation Act

  • Contractors should expect a proposed rule next year that requires the establishment of placement goals for individuals with disabilities.
  • DOL is particularly interested in public comments regarding data sources that could be used for disability availability statistics.
  • The regulation updates may require pre-offer solicitations for voluntary self-identification of disability status.
  • Other notable ANPRM comment areas include, but are not limited to: permissible qualification standards, workplace flexibility arrangements, linkage agreements, job-seeker website accessibility standards, and impact on small contractors

FAR rule requiring reports on subcontractors

  • The Federal Acquisition Council published an Interim Final Ruling on July 8, 2010, that has flown under the radar in many compliance circles. This Rule will apply to all prime and first-tier subcontractors with a contract of $25,000 or more.
  • The rule requires the contractors and first-tier subcontractors to submit the names and total compensation of the five highest compensated executives.
  • The rule requires reporting only where 80% or more of a contractor’s or subcontractor’s gross revenues are from federal funds.

OFCCP’s “Plan B” on compensation

  • Experts expect that the Paycheck Fairness Act will not be passed, and now the OFCCP is in the process of rescinding the current compensation standards.
  • A National Pay Equity Task Force has indicated that the OFCCP will issue new compensation standards without notice or a comment period for contractors and the public.
  • It appears that the OFCCP’s new approach may be based on a pay grade or DuBray-type methodology. Experts in systemic compensation discrimination also speculated that the OFCCP may rely on cohort analyses in their new methodology. Furthermore, the OFCCP plans to reinstate the EO Survey.
  • Regardless, most of these approaches conflict with statistically and theoretically based principles related to systemic compensation discrimination. It is advised that contractors continue to conduct pro-active compensation analysis based on well-established principles.

New mini-OFCCPs: Offices of Minority and Women inclusion

  • Section 342 of the Dodd Frank Wall Street Reform and Consumer Protection Act requires the establishment of Offices of Minority and Women Inclusion for nine Federal agencies (e.g., Treasury, FDIC, SEC, Federal Reserve Banks, etc.).
  • Responsibilities of these Offices include developing and implementing standards for evaluating diversity policies and practices of contractors and subcontractors, and establishing procedures for considering diversity as a factor in awarding contracts.
  • Although these Offices are not granted the authority to enforce civil rights laws or regulations, they do have the authority to refer contractors or subcontractors to the OFCCP.

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