A Bridge to Tomorrow
75th Annual NHRMA
Conference & Tradeshow
Presented by
50 Shades of Grey The Complexities of OFCCP Compliance in 2013
Today’s presentation is a discussion including opinions regarding compliance issues and should not be taken as legal
advice. For formal legal advice attendees should seek legal counsel.
OutSolve
Your Presenters:
Patrick Savoy VP Operations
Chris Lindholm VP Compliance
• Celebrating 15 years of supporting Affirmative Action
Planning and Diversity for our clients
• Women’s Business Enterprise (WBE)
• Serving over 400 companies nationwide
• Supporting >100 OFCCP audits annually
Agenda
1. Impact of New Regulations
2. New Federal Contract Compliance Manual
3. Compensation Enforcement
4. Record Keeping and Adverse Impact
5. Audit Preparation
New Definition Disability:
From FAQ: How does the ADAAA define “disability?”
The ADA Amendments Act of 2008 (ADAAA) and the final
regulations define a disability using a three-pronged approach:
A physical or mental impairment that substantially limits one or
more major life activities (sometimes referred to in the regulations
as an “actual disability”)
A record of a physical or mental impairment that substantially
limited a major life activity (“record of”)
When a covered entity takes an action prohibited by the ADA
because of an actual or perceived impairment that is not both
transitory and minor (“regarded as”). [Section 1630.2(g)]
Impact of New Regulations
New Definition Veterans: Disabled veterans
Recently separated veterans (3 years)
Recipients of Armed Forces service medal
Served in active duty in war or campaign for which campaign
badge authorized
Under the Final Rule, a “protected veteran” is “a veteran who is
protected under the non-discrimination and affirmative action
provisions of VEVRAA
Contractor Solicitation – new paragraph requiring contractors to
state in their job solicitations and ads that they are equal opportunity
employers of protected veterans and individuals with disabilities
Impact of New Regulations
Impact of New Regulations
Transition Examples (Final Rule published in Federal
Register in September 2013 and effective March 24,
2014):
Annual plan date prior to 180-day implementation period
January 1, 2014 – Maintain current structure
January 1, 2015 – Implement Part C*
January 1, 2016 – AAP reflect results of new
regulations for first time
Parts A and B required 3/24/2014
Impact of New Regulations
Annual plan date after 180-day implementation period
• April 1, 2014 – Implement new plan requirements*
• April 1, 2015 – AAP reflect results of new regulations
• April 1, 2016 – Adapt outreach efforts towards reaching
goals
• Parts A and B required 3/24/2014
Impact of New Regulations
Disability Regulations - Section 503 of the Rehabilitation Act of 1973,
as amended (Section 503) at 41 CFR Part 60-741
Placement Goal
7% Goal for all job groups (Director can “review”)
EEO Categories acceptable if = Job Group
100 or fewer employees = goal is for entire workforce
No monetary violations so long as the process is undertaken
Sheltered workshops – cannot be used to meet goals
Impact of New Regulations
Veterans Benchmark
Just a goal right? – Not exactly
Benchmark equal to annual percentage supplied by OFCCP based on
1) National % of veterans in the civilian workforce*
2) Benchmark from BLS and VETS/ETA and factors developed by the
contractor
Three (3) year record keeping requirement
Analyze by Job Group? – Acceptable but not required
* Not equal to VEVRAA data
Impact of New Regulations
Self-ID Forms (Disability):
• Pre-Offer: EEOC approved. Template will be provided
(Subpart C)
• Post-Offer: Must invite current employees to identify
and update every five (5) years with one reminder in-
between
• Employers can identify a disability if it is “obvious” or if
an accommodation request is made (no guessing)
Impact of New Regulations
Self ID Forms (Veterans)
Pre-Offer – Solicitation of “Protected Veteran” only
Post-Offer – Solicitation of specific category
Timing of Pre-Offer – Follows Internet Applicant Rule
Impact of New Regulations
EO Clause:
Must be incorporated into contracts and subcontracts.
Required Text:
This contractor and subcontractor shall abide by the requirements of 41
CFR 60-741.5(a). This regulation prohibits discrimination against
qualified individuals on the basis of disability, and requires affirmative
action by covered prime contractors and subcontractors to employ and
advance in employment qualified individuals with disabilities.
This contractor and subcontractor shall abide by the requirements of 41
CFR 60-300.5(a). This regulation prohibits discrimination against
qualified protected veterans, and requires affirmative action by covered
prime contractors and subcontractors to employ and advance in
employment qualified protected veterans.
New Federal Contract Compliance Manual
New FCCM: What is the FCCM?
Contractors should not use more than one method so
as to mask underutilization.
Follows Uniform Guidelines
End of the 80% and Whole Person era?
Do you use two utilization tests?
Establishes IRA <80% as threshold for adverse impact
Internal audits becoming more important
Frito-Lay case ongoing
In order to fully investigate and understand the scope of
potential violations the CO may need to examine information
after the date of the Scheduling Letter in order to determine,
for example, if violations are continuing or have been
remedied. If the CO believes it necessary to request
information related to periods after the date of the scheduling
letter the CO must discuss the issue with his or her supervisors.
New Federal Contract Compliance Manual
New Federal Contract Compliance Manual
Nothing in the FCCM itself appears to specify timeliness apart from deadlines actually contained in regulations
Nothing authorizes OFCCP to impose arbitrary deadlines for responses to requests for information
“Prompt” responses expected without definition of prompt
Example: Request that contractor submit missing support data “promptly”
5-day initial conciliation contact deadline in Notices of Violations
FCCM provides that “The CO must provide the contractor with written confirmation of the onsite date(s) and time(s) at least three business days prior to the onsite.”
Status of Compensation Enforcement:
1990’s – Dubray Analyses
2000’s – Statistical Analyses
2006 – Failed Guidelines
2009 – Pay Equity Task Force
2013 – Directive 307
Compensation Enforcement
Compensation Enforcement
Directive 307:
Summary of OFCCP Compensation Investigation Procedures
Below are procedures that the CO follows in reviewing contractor compensation data and information. It is important to note that the order in which these procedures occur may vary based on the facts and circumstances of each review. At any stage in the process, OFCCP may determine, based on the evidence, that it is appropriate to close the review or may determine that further review is warranted.
1. Conducts Preliminary Analysis of Summary Data (if necessary or appropriate)
2. Conducts an Analysis of Individual Employee-Level Data
3. Determines the Approach from a Range of Investigative and Analytical Tools
4. Considers All Employment Practices that May Lead to Compensation Disparities
5. Develops Pay Analysis Groups
6. Investigates Systemic, Small Group and Individual Discrimination
7. Reviews and Tests Factors before Accepting the Factors for Analysis
8. Conducts Onsite Investigation, Offsite Analysis, and Refinement of the Model
Contractors have an opportunity to provide clarification of their submissions and to explain their compensation system and practices.
OFCCP Audits:
The basics (what we see in typical requests):
Emp ID, race, gender, title, hire date, job group, job change date, exempt/non-exempt, annual salary, etc.
The additional variables (other items seen):
Education, bonuses, commissions, overtime, shifts, performance scores, etc. (less reliable)
On the table (where we may be going):
Starting salary, job placement, progression
Try to avoid giving OFCCP junk data
Compensation Enforcement
Record Keeping and Adverse Impact
Is this still a critical item?
Common record keeping issues
How to minimize exposure/risk
What is the right analysis?
What to expect in an audit
Audit Preparation
Standard submission issues
Expected follow-up questions
Driving the process
Communicating with OFCCP
Thank you for joining us!
Questions and Answers
Chris and Patrick (504) 486-2410 * [email protected] * [email protected]
www.outsolve-hr.com * www.affirmativeactioneducation.com