A Guide to OFCCP's Final Revisions to the Scheduling Letter & Itemized Listing

By: Joanna Colosimo

On August 24, 2023, the Office of Information and Regulatory Affairs in the Office of Management and Budget (OMB) posted an “Approved with Change” action for the Office of Federal Contract Compliance Program’s (OFCCP) revisions to its compliance review scheduling letter for federal supply and service contractors and subcontractors.

Significant Scheduling Letter Changes 

As described in detail in our earlier blog post, the agency’s change to the scheduling letter regarding “campus-like settings” has been a focus for many in the federal contractor community. The final, approved language was unchanged, and is as follows: 

If you are a post-secondary institution or Federal contractor with a campus-like setting that maintains multiple AAPs [affirmative action plans], you must submit the information requested in this scheduling letter for all AAPs developed for campuses, schools, programs, buildings, departments, or other parts of your institution, or company located in [city and state only].  

Despite significant concerns from federal contractors and subcontractors regarding the “campus-like settings” proposed change, OFCCP has retained this exact verbiage. The request for all AAPs that are part of one campus setting will result in significantly greater employee counts and more personnel actions with which the agency will run its analyses.   

Itemized Listing Changes – Changes with Substantial New Burdens 

There are several items in the final scheduling letter that will create substantial burdens for federal contractors and subcontractors undergoing compliance reviews.  Among these items are those listed below, bucketed into main categories. 

Changes to documentation related to outreach, recruitment, and programs: 

Item 7 – Action Oriented Programs 

OFCCP’s November 2022 proposal included a new item that requested a “list of all action-oriented programs designed to correct any problem areas pursuant to 41 CFR 60-2.17(b).” The final version includes a noteworthy change to this language: 

Pursuant to 41 CFR § 60-2.17(c), provide documentation demonstrating the development and execution of action-oriented programs designed to correct any problem areas identified pursuant to 41 CFR § 60-2.17(b).  The documentation should cover action-oriented programs addressing problem areas identified for the immediately preceding AAP year. (Emphasis added)  

In a previous blog post, we discussed the burden associated with this new item as it pertains to each individual establishment or functional/business unit. As in various other components of the updated itemized listing, this documentation request - if enforced - would be significantly burdensome to the federal contractor community. The additional sentence in the final version of the letter provides clarification on the time period covered by Item 7. 

Item 8 and Item 12 – Outreach and Recruitment Efforts 

OFCCP’s changes in these items are in relation to outreach and positive recruitment efforts under the federal affirmative action regulations for individuals with disabilities (Item 8) and protected veterans (Item 12).  Specifically, OFCCP, as described in an earlier DCI blog post, incorporated changes that added language for contractors to provide documentation of outreach and recruitment efforts and their effectiveness. This includes documentation describing actions to be taken when outreach efforts were ineffective, and any alternative efforts explored. Items 8 and 12 will have a significant burden for federal contractors and subcontractors during the course of an audit. 

Item 11 – Disability Utilization Analysis 

As discussed in a previous DCI blog, OFCCP’s revisions to Item 11 are likely to be more burdensome to federal contractors and subcontractors than OFCCP anticipates. There were modifications to this item in the final version of the letter, which included highlighting effectiveness that may be different than Item 8 (see above).   For this item, OFCCP is asking that, in conjunction with the disability utilization analysis already being provided during an audit, the contractor should include a description of the steps taken to determine if there are barriers to equal employment opportunity. In the description, contractors should include the assessment of personnel processes, effectiveness of outreach that may be different than Item 8 above, the results of the affirmative action audit, and a description of action-oriented programs from the preceding AAP year.  If the contractor is six months or more into the current year, just as in the previous letter, the information must be provided for the first six months of the current AAP year as well.  

Requests for much more data and policy-related information: 

Item 18 – Personnel Activity Data 

In the November 2022 version of the proposed scheduling letter and itemized listing, OFCCP proposed that significant new data be submitted for promotions and terminations (covered in detail here). In the supporting statement for the final version of the scheduling letter, OFCCP reiterated that having specific information about promotion practices is important to their mission of determining whether discrimination has occurred.  However, many of the proposed prior changes were NOT implemented in the final draft of the scheduling letter.  The main changes to this item, compared to the previously used scheduling letter, include the following: 

    • Provide documentation that includes established policies and describes practices related to promotions. 
    • Where the contractor maintains data on whether the promotion is competitive or non-competitive, it may also provide this information in its submission (emphasis added).

Item 19 – Compensation Data 

The final version of Item 19 has only minor modifications from the April 2023 proposed version and will significantly increase the burden and risk for contractors undergoing review.  To recap, this item now requires the following: 

    • Contractors must now submit two snapshots of compensation data. One snapshot that covers the workforce analysis in the current Executive Order AAP; the other covering the workforce analysis in the prior year Executive Order AAP.    
    • Contractors are to submit “relevant factors used to determine compensation such as education, experience, time in current position, duty location, geographic differentials, performance ratings, department or function, job families and/or subfamilies, and salary level/band/range/grade” for each employee.  Previously, employers were allowed but not required to provide this kind of information.   
    • This final version mandates the submission of documentation and policies related to a contractor’s compensation practices.  Again, employers were previously allowed but not required to provide this kind of information.  

Despite multiple comments from the contractor community, the requests for additional compensation information are largely unchanged from OFCCP’s prior proposal.  However, there was one potentially significant victory for contractors. In the proposed letter, OFCCP requested employee-level compensation data for all employees (including but not limited to full-time, part-time, contract, per diem or day labor, and temporary employees, including those provided by staffing agencies).” The final letter removes the language regarding “including those provided by staffing agencies. 

Item 21 – Policies and Practices Regarding Recruiting, Screening, and Hiring 

This item was mainly unchanged from the prior version of the scheduling letter and states that contractors must: 

Identify and provide information and documentation of policies, practices, or systems used to recruit, screen, and hire, including the use of artificial intelligence, algorithms, automated systems or other technology-based selection procedures.  

OFCCP has retained this verbiage from the April 2023 proposal. In its supporting statement for this information, OFCCP stated that those that do not use artificial intelligence (AI)-based selection should simply note it in the response to the request for audit materials.  For those that do use AI-based selection tools, OFCCP expects that the contractor will include the identification of the selection procedure used and provide documentation and policies of the procedure.  

Item 22 – Self-Analysis of Compensation Systems 

The final version of this item is unchanged from the proposed version and requests documentation that the contractor has evaluated its compensation as required by 41 CFR § 60-2.17(b)(3).  That section of the Code of Federal Regulations reads as follows:  

41 CFR 60-2.17(b).   The contractor must perform in-depth analyses of its total employment process to determine whether and where impediments to equal employment opportunity exist. At a minimum the contractor must evaluate… (3) Compensation system(s) to determine whether there are gender-, race-, or ethnicity-based disparities; 

OFCCP’s final rule reiterates that the contractor must include at least the following:  

    1. When the compensation analysis was completed;
    2. The number of employees the compensation analysis included and the number and categories of employees the compensation analysis excluded; 
    3. Which forms of compensation were analyzed and, where applicable, how the different forms of compensation were separated or combined for analysis;  
    4. That compensation was analyzed by gender, race, and ethnicity; and
    5. The method of analysis employed by the contractor.  

This is an expected change to the scheduling letter, given OFCCP’s recent enforcement activities, policies, and directives. 

Itemized Listing Changes – Changes with Moderate New Burdens 

Along with the items mentioned above that will create substantial burdens, there are other finalized items that will create at least a moderate increase in burden for federal contractors and subcontractors undergoing a compliance review.  Among these items are those listed below: 

Item 25 – Review of Personnel Processes 

The final scheduling letter has the following language:  

[Submit the] contractor’s most recent assessment of its personnel processes, as required by 41 CFR §§ 60-300.44(b) and 60-741.44(b). This assessment shall include, at a minimum, a description of the assessment, any impediments to equal employment opportunity identified through the assessment, and any actions taken, including modifications made or new processes added, as a result of the assessment. (Emphasis added)  

This verbiage is the same as prior proposed versions. Employers will need to ensure that they are tracking any impediments identified during its assessments. Additionally, contractors should ensure that the list of any impediments identified is careful to avoid opening the door to potential findings of discrimination against protected veterans or individuals with disabilities.  

Itemized Listing Changes – Changes with Minimal New Burdens 

The items mentioned below should create only minimal new burdens for federal contractors and subcontractors undergoing a compliance review.  

Item 16 (previously Item 15) – EEO-1 and IPEDS Reports 

The prior itemized listing required employers to submit the last three years of their EEO-1 reports. This requirement has not changed. However, post-secondary educational institutions do not file EEO-1 reports. The final version of the scheduling letter requires post-secondary educational institutions to submit copies of their Integrated Postsecondary Education Data Systems (IPEDS) report for the last three years. This revision remains unchanged between proposed versions of the letter. 

Item 23 (previously Item 20) – Reasonable Accommodation Policies  

The final scheduling letter adds clarifying language that the accommodation data should involve requests made during the preceding AAP year and additional six-month period if the contractor is six months or more into their plan year. This item was relatively unchanged. 

Item 24 – Written Policies 

This is a new requirement for employers to submit copies of existing, written employment policies and documents that concern equal employment opportunity. Examples included anti-harassment policies, EEO complaint procedures, and employment agreements 

Next Steps 

For further analysis and continued updates regarding OFCCP’s new scheduling letter, compliance reviews, and affirmative action in general, please follow us on LinkedIn. 

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