Analysis of OFCCP’s Revised Construction Scheduling Letter, Part 1

By: Evan Szarenski

On July 26, 2024, the Office of Management and Budget (OMB) granted approval for the Office of Federal Contract Compliance Programs (OFCCP)’s revised construction compliance evaluation scheduling letter and itemized listing. On October 2, OFCCP announced that it would be using this letter for all construction reviews scheduled after October 1, 2024. 

OFCCP initiates all compliance evaluations by issuing a scheduling letter. There are different scheduling letters for construction compliance evaluations and for supply and service (non-construction) compliance evaluations. The scheduling letter for construction contains the data that must be submitted and the geographic area covered by the review. In addition, the construction scheduling letter implicitly sets out the time period covered by the review, which is the 12 months prior to receipt of the letter. Contractors have 30 days to respond to the scheduling letter. The construction scheduling letter requests items for Executive Order 11246 (EO 11246), Section 503 of the Rehabilitation Act of 1973 (Section 503), and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA). Contractors holding only federally assisted construction contracts need only respond to the items requested for EO 11246. 

The revised scheduling letter contains significant new reporting requirements and will present challenges to construction contractors in responding within the 30-day response period. An overview of the changes that OFCCP sought at an earlier stage of the approval process was covered on DCI’s blog. There have been some modifications to OFCCP’s initial proposal. Now that the letter has been finalized, it is time for a deep dive into the changes. Where helpful, both the new and old language will be provided. 

EO 11246, Item 1 

Prior language: 

A list of all construction projects (federal, non-federal, and federally assisted) by name and location in the (as appropriate insert either (1) the name(s) of SMSA or (2) the name(s) of Non-SMSA) during the preceding 12 months, including identifying whether each project is commercial or residential, federal or non-federal. 

New language: 

A list of all construction projects (Federal, non-Federal, and federally assisted) in the (as appropriate insert either (1) the name(s) of SMSA(s) or (2) the name(s) of Non-SMSA(s)) where construction work was performed during the preceding 12 months, including: 

1. 1. the name of the project;
   2. the location(s) where work was performed; 
   3. whether the project is commercial or residential; 
   4. whether the project is Federal, federally assisted, or non-Federal; and the start and end dates (or anticipated end dates) of each project. 

The new scheduling letter clarifies that the list of contracts should specify whether the project is (direct) federal, federally assisted, or non-federal (the previous version did not break out federally assisted projects separately). Additionally, OFCCP is now requesting the start and end dates of each project. Although not specified in the scheduling letter itself, OFCCP’s supporting statement indicates that it is seeking the start and end dates to allow it to coordinate on-site investigations. This suggests that it is actually seeking the start and end dates of the work done by the company receiving the scheduling letter on a project, not the start and end dates of overall project. 

EO 11246, Item 2 

Prior language:  

Employee level payroll data for all construction trade employees working in the (as appropriate insert either (1) the name(s) of SMSA or (2) the name(s) of Non-SMSA) during the preceding 12 months. For each project, please provide payroll data with the following information: 

1. 1. Employee name or ID;
   2. Gender; 
   3. Race/Ethnicity; 
   4. Hire date; 
   5. All trades the employee was paid to work in; 
   6. Total hours worked in each trade; 
   7. Overtime hours worked in each trade; 
   8. Wage rate(s) for each trade; 
   9. Union affiliation; 
   10. Apprenticeship status; and 
   11. Employment type, including but not limited to, full-time, part-time, contract, per diem or day labor, and temporary employees. 

New language: 

For each project identified in Item 1, please provide employee-level payroll data for all construction trade employees working in the (as appropriate insert either (1) the name(s) of SMSA(s) or (2) the name(s) of Non-SMSA(s)) during the preceding 12 months. The information should include items (a)-(q) for all trade employees, as well as those employees involved in the supervision, inspection, and other onsite functions incidental to the actual construction:  

1. 1. Employee name or ID;
   2. Gender; 
   3. Race/Ethnicity; 
   4. Hire date; 
   5. Union affiliation; 
   6. Apprenticeship status; 
   7. Employment type, including but not limited to, full-time, part-time, contract, per diem or day labor, and temporary employees; 
   8. Job title; 
   9. Trade or supervision, inspection, or onsite function (e.g., foreperson); 
   10. Regular hours worked in each trade, as indicated in your certified payroll; 
   11. Regular rate of pay, as indicated in your certified payroll; 
   12. Total regular pay, as indicated in your certified payroll; 
   13. Overtime hours worked in each trade, as indicated in your certified payroll; 
   14. Overtime rate of pay, as indicated in your certified payroll; 
   15. Total overtime pay, as indicated in your certified payroll; 
   16. Bonus or other pay, as indicated in your certified payroll; and 
   17. Time period covered for the pay and work hours provided in (j)- (p). 

OFCCP made several significant changes to this item. First, the new letter specifies that the payroll data should be submitted for employees involved in the supervision, inspection, and other onsite functions incidental to the actual construction, not just “trade employees.” In recent years, OFCCP had been requesting payroll data for non-trade construction employees (like forepersons and superintendents) during active audits and had taken the position that they were “trade employees.” This change brings the scheduling letter and OFCCP’s practice into accord with each other. 

OFCCP also added several new data fields to the request: 

• Job title
• Regular hours worked 
• Total regular pay 
• vertime rate of pay 
• Bonus or other pay 
• Time period for the pay and work hours provided 

Finally, OFCCP added a requirement that the hours and pay data be “as indicated in your certified payroll.” OFCCP does not address how contractors should report information for projects where there is no certified payroll requirement. 

EO 11246, Item 3 

This item requires contractors to submit employment activity data (applicants, hires, promotions, layoffs, recalls, and terminations) for the 12 months preceding receipt of the scheduling letter. In addition to some changes that are clarifications, there are several substantive changes. 

First, as in Item 2, OFCCP specifies that the data must be provided for employees involved in the supervision, inspection, and other onsite functions incidental to the actual construction in addition to trade employees. As discussed above, this brings the scheduling letter and OFCCP’s practice into accord with each other. (OFCCP characterizes this additional requirement as a “clarification.”) 

Second, OFCCP added a paragraph specifying what information should be provided for layoffs. While the prior version listed layoffs as an employment action for which data should be submitted, it did not specify what information should be provided for layoffs. The new scheduling letter fills this gap. 

Finally, OFCCP is now requesting the action date (hire date, promotion date, etc.) for each type of employment action requested. 

EO 11246, Item 4 

The prior version requested a copy of the company’s EEO policy. The new scheduling letter also requires contractors to submit “antiharassment policies, policies on EEO complain procedures, policies on employment agreements that impact employees’ equal opportunity rights and complaint processes (e.g., policies on arbitration agreements, and any other EEO policies.” This change brings this request into alignment with a similar request in the supply and service scheduling letter. 

EO 11246, Item 5 

Prior language: 

Records of notices to the company’s subcontractors about their EEO obligations during the preceding 12 months. 41 CFR 60-4.3(a)(2). 

New language: 

Records showing that the contractor included the “Standard Federal Equal Employment Opportunity Construction Contract Specifications” and the “Notice of Requirement for Affirmative Action to Ensure Equal Employment Opportunity” in its construction subcontracts in excess of $10,000, as required by 41 CFR 60-4.3(a)2. The records must cover the preceding 12 months. 

This change explicitly spells out the notices that are required under 41 CFR 60-4.3(a)(2). 

EO 11246, Items 8 and 9 

These two items request information about unions and training programs. OFCCP made changes to the language in the scheduling letter to better match regulatory language; the substance of a contractor’s response will not change. OFCCP also added a line in both items that a contractor must indicate in its response if it does not use unions, trade organizations, or training programs. 

EO 11246, Item 16 

This is a new requirement that did not appear in the prior Itemized Listing: 

Identify all tests and selection procedures used in the hiring process for positions in the (as appropriate insert either (1) the name(s) of SMSA(s) or (2) the name(s) of Non-SMSA(s)) during the preceding 12 months. This includes technology-based tests and selection procedures (e.g., artificial intelligence, algorithms, automated systems), as well as any other non-technology-based tests and selection procedures (e.g., written tests, work simulations, structured interview questions) utilized by your company in the hiring process. Provide evidence that these tests and selection procedures were validated where necessary in accordance with 41 CFR 60-4.3(a)7.k. and 41 CFR 60-3. 

Although only given a single number, this requires submission of multiple things. First, contractors must identify “all tests and selection procedures” used in hiring. This is a similar requirement to Item 21 of the supply and service scheduling letter. Second, the letter requires contractors to provide evidence that the tests and selection procedures were properly validated when necessary. 

Federal contractors (including construction contractors) are required to analyze their selection procedures to see if there are any overall disparities based on race, ethnicity, or gender. If there is adverse impact by race, sex, or ethnic group, contractors are then required to analyze each step of their selection process to see if any step is causing the adverse impact. If any step has adverse impact, that step must be validated in accordance with the Uniform Guidelines on Employee Selection Procedures (UGESP). In the past, OFCCP would only request this information if it found during a compliance evaluation that a selection procedure was causing adverse impact. OFCCP is now requiring construction contractors to provide this information at the beginning of the review. (Note that even though non-construction contractors are also subject to this requirement, there is no parallel requirement in the supply and service scheduling letter.) 

EO 11246, Item 17 

This is also a new submission requirement: 

Provide evidence that your company monitored personnel and employment-related activities during the preceding year to ensure that seniority practices, job classifications, work assignments and other personnel practices did not have a discriminatory effect and that the EEO policy and the contractor's EEO obligations were being carried out, as provided in 41 CFR 60-4.3(a)7.m. 

OFCCP’s regulations require construction contractors to monitor personnel and employment-related activities to ensure they do not have a discriminatory effect. In the past, OFCCP would investigate whether the contractor was in compliance with this requirement during the onsite phase of the investigation. OFCCP is now requiring contractors to submit this information at the desk audit stage of the compliance evaluation. 

In part two of this analysis, we will discuss the changes to the requirements regarding individuals with disabilities and protected veterans.