Proposed Changes to OFCCP Scheduling Letters: The Institute’s Comments

As noted in a previous blog, OFCCP proposed changes (dated April 12, 2019) to the supply and service scheduling letters covering contractor compliance with Executive Order (EO) 11246, Section 503 and VEVRAA regulations . The Institute for Workplace Equality (The Institute) on behalf of the contractor community submitted comments (dated June 11, 2019) to the Office of Management and Budget (OMB) on the proposed revised establishment review, 503-focused review, and compliance check scheduling letters.

Please note that many of the proposed changes outlined below have been rescinded as of July 2, 2019. This blog post is intended to provide a reference for readers to gain a sense of the scope of the potential data requirements contractors were faced with prior to the July 2^nd update. Please refer to our most recent blog post on this topic for the most up-to-date information on scheduling letters.

Most of the issues The Institute raised in their comments concerned the undue burden placed on contractors by the additional requirements that were not backed by the regulations and had not been appropriately accounted for in OFCCP’s burden estimates.

Below are highlights of The Institute’s comments to OFCCP on the supply and service scheduling and compliance check letters:

• Item 4: Requirement to identify “three largest subcontractors” (EO 11246, 503, VEVRAA):
• Determining which subcontractors are essential for the performance of a federal contract is a struggle for many contractors.
• Nowhere in EO 11246, Section 503 and VEVRAA regulations is a federal contractor required to identify covered federal subcontractors.
• The Institute’s letter noted that this requirement might have a chilling effect on subcontracting as service companies may decline to do business with organizations that are federal contractors to avoid abiding by burdensome OFCCP regulations and may in turn deprive federal agencies of goods and services they require to perform work.
• Items 3-6: Changes to utilization analyses (EO 11246):
• OFCCP proposed requiring all contractors to evaluate and submit workforce representation and placement goals by specific minority/ethnicity groups, as well as the intersectionality between specific minority/ethnicity groups and sex as part of their annual affirmative action plan (AAP).
• The Institute commented that there is nothing in the regulations that otherwise requires contractors to collect availability data or perform utilization analyses by specific minority/ethnicity, as well as intersectionality as part of their annual affirmative action planning.
  
  
• Item 7: Request to submit ‘results’ of most recent compensation analysis (EO 11246):
• The way the regulations are written, contractors are NOT required to perform any particular pay equity analysis. Rather, they state that contractors must take a holistic approach, including evaluating compensation system(s), to determine whether there are impediments to their overall EEO mission. This evaluation need not necessarily be statistical in nature, and may solely include evaluating whether there are safeguards against bias in compensation decision making. The Institute expressed concern that OFCCP may have been overreaching and looking for contractors to produce analysis that many contractor do not perform or otherwise covered by legal privilege.
  
  
• Items 9, 12, 13, 17: Request to submit additional months of data (EO 11246, 503 and VEVRAA):
• The proposed scheduling letter (dated April 12) further expanded the 6-month data collection requirement by proposing to collect employment data for “every completed month of the current AAP year” if the contractor were more than 6 months into their current AAP year.
• The Institute asserted that requiring contractors to collect this additional data would have been unduly burdensome and unfair to those who would have been 6 months or more into their AAP year.
  
  
• Item 17: Request to submit “pools” of promotions by sex and race/ethnicity (EO 11246):
• This item would have required contractors to collect and assemble promotion “pools” that in all likelihood do not exist, or would have been unduly burdensome to create. The Institute asserted that the assembled promotion pools, especially in the case of natural or in-line progressions, would not reflect the reality of hiring and promotions within organizations.
• Therefore, the Institute recommended that the OFCCP only request pool data for competitive promotions, and alter its analytics protocol from an analysis of “hires” to an analysis of “selections.” Doing so would have enhanced accuracy and ensured compliance with the Uniform Guidelines.

• Compliance Checks scheduling letter:
  • The proposed compliance check letter requires contractors to provide “AAP results for the preceding year.” The Institute requested clarification on which portions of the AAPs contractors would need to be submitted in response to a compliance check scheduling letter,

The Institute also submitted a comment letter for the 503 and VEVRAA focused review letters. Similar to the revisions proposed in the scheduling letter, The Institute commented that the revised 503- and VEVRAA-focused review letters impose substantial new requirements that go beyond the regulatory requirements. Below are highlights of The Institute’s comments on the focused review letters:

• The revisions to the 503-focused review letters were premature:
  • The Institute deemed the proposed revisions to be premature and unjustified, lacking a previous focused review to serve as a reference point.
  • The Institute recommended a 503 focused review to be conducted first without the additional requirements to determine if any revisions would be needed.

• The request for applicant and employee level employment activity for 503- and VEVRAA-focused review violated the preamble:
  • The Institute letter stated that this request was in direct conflict with the Agency’s stance in the preamble. The preamble to 503 and VEVRAA regulations says that OFCCP will not be using applicant and hiring data for individuals with disability (IWD) and protected veterans (Vets) to determine underutilization or adverse impact against IWD and Vets, but rather to determine whether contractors have fulfilled their various obligations under the 503 and VEVRAA regulations.
    
    
• Request for names and unique identifiers (503 and VEVRAA):
  • Footnote 2 in Request 8 of the proposed review letter required contractors to provide names and unique identifiers for all applicants and employees that are consistent across different databases.
  • The Institute commented that this would be unduly burdensome or even impossible for many contractors to provide as not many HRIS and applicant tracking systems assign the same numbers to applicants and employees, and individuals may get assigned different unique identifiers depending upon the method of application.
  • It also seems this request was referring to OFCCP potentially planning to conduct adverse impact analyses, which contradicted the preamble, as was outlined in the previous section.
    
    
• Request for employee level compensation data (503, VEVRAA):
  • This request was similar to Item 19 of the Itemized Listing in the current full compliance review scheduling letter. However, instead of focusing on women and minorities, OFCCP seemed to be planning a compensation analysis based on IWD and Vets status.
  • While The Institute stated that it is in favor of advancing fair pay of IWDs and Vets, they noted that an analysis may not have been practically possible due to low self-ID rates despite contractors’ best efforts.
  • The Institute recommended collecting and analyzing data for just those employees who have self-identified as IWD and Vets and those who are similarly-situated.

• Request for written AAPs (503 and VEVRAA):
  • The Institute asked the OFCCP to clarify what portions of the preceding year AAPs contractors would be obligated to submit when responding to a 503 and VEVRAA focused review letter.

Conclusions

In sum, The Institute’s commented that the OFCCP’s proposed revisions to the scheduling focused review letter were burdensome to contractors, not in line with the EO 11246, 503, and VEVRAA regulations, and in some places simply unclear. The revisions also contradicted the agency’s goals for transparency and efficiency as well as the Trump administration’s goal of deregulation. Therefore, the Institute urged the OFCCP to reconsider the aforementioned revisions.

By Vinaya Sakpal, M.P.S., Associate Consultant, and Lily Kerr, M.S., HR Analyst at DCI Consulting Group