OFCCP'S FY 2015 BUDGET - WHAT TO EXPECT FROM OFCCP

Secretary of Labor Thomas Perez released President Obama’s FY 2015 budget on March 4, 2014, including a request for over $107 million for OFCCP. The total increase in the budget amount this fiscal year is almost $3 million, including 710 FTE (full-time equivalent) employees.  The OFCCP budget may be viewed here.

In the FY 2014 budget, OFCCP proposed to increase its pay equity enforcement, as witnessed during recent audits with an increased focus on compensation.  The same compensation enforcement trend is expected to continue in 2015, as outlined by an additional $1.1 million in the budget dedicated to strengthening efforts to eliminate pay discrimination affecting women. The FY 2015 budget request proposes an additional 10 FTEs to assist with this enforcement effort.  Contractors should take note and prepare for further scrutiny related to gender-focused compensation differences in audits.

The budget request also outlines the agency’s accomplishments from funding used for FY 2013, including the completion of a total of 4,110 compliance evaluations resulting in over $7.8 million in back pay to almost 9,300 victims of discrimination.  OFCCP achieved 97% of its compliance evaluation target as seen in the agency’s annual performance report of 2013.  Further, OFCCP indicated it nearly tripled the number of compensation cases settled between FY 2010-2012.

Additional highlights in the budget request help outline future initiatives for OFCCP:

 

1. Increased enforcement

OFCCP proposes to complete 3,840 supply and service compliance evaluations that will examine federal contractors’ obligations under the statutes and executive order that OFCCP enforces. OFCCP proposes to complete 450 construction contractor reviews in FY 2015, for a total of 4,290 completed compliance evaluations. This makes a 2% increase over the FY 2013 target of 4,220. The FY 2014 target for total completed compliance evaluations is identical to FY 2015.

 

2. Scheduling Letter Changes

The budget outlines the intention of OFCCP to approve and release a revised scheduling letter and complaint form this year (FY 2014).  Changes to the scheduling letter were proposed to collect disaggregate compensation data during a desk audit, job group and job title personnel activity data, among other changes.  OFCCP will need Office of Management and Budget (OMB) approval before altering the scheduling letter and complaint forms.  The proposed changes to the scheduling letter currently do not include additional requests related to the newly revised regulatory updates to Section 503 and VEVRAA.

 

3. Compensation Data Collection Tool

OFCCP plans to issue a Notice of Proposed Rulemaking (NPRMs) on a compensation data collection tool this year (FY 2014).  An Advanced NPRM (ANPRM) was released in August 2011 regarding the development of a data collection instrument that would collect sex- and race-based compensation information from contractors.  This would be a similar tool to the EO Survey that was rescinded in 2006.

 

4. Sex Discrimination Guidelines

OFCCP plans to update the existing sex discrimination guidelines as a part of the 2014-2015 fiscal years.  The update to the sex discrimination guidelines has been an OFCCP initiative for several years, yet, to date, they have not been updated.  There is speculation in the contractor community that the updates to the Sex Discrimination Guidelines may codify components of compensation Directive 307.  Further speculation indicates that OFCCP may revise the sex discrimination guidelines so that contractors are required to share their gender-based compensation analyses with OFCCP.

 

5. Eliminating Discrimination in the construction industry

Evidence of egregious discrimination cases were seen in the construction industry and OFCCP will continue to ensure equal opportunity for women and minorities in FY 2015. OFCCP plans to take a number of steps toward this, which includes focusing more on larger and first-time contractors and contractors with high-impact ‘mega’ projects.

By Joanna Colosimo, M.A., Senior Consultant, and Vinaya Sakpal, M.P.S, Selection Analyst, DCI Consulting Group

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