Monday, February 22, 2010

OFCCP Town Hall Meeting, February 16, 2010

Biddle Consulting Group attended the OFCCP’s Town Hall Meeting in San Francisco on February 16, 2010. The meeting was very similar to the webcasts held previously where the focus was not on a fixed presentation but rather on an open dialogue with the public. The meeting began with Bill Smitherman, Regional Director (Pacific Region), offering a flattering introduction to the new Director of the OFCCP, Patricia Shiu. The meeting was also attended by Sandra Dillon, National Director of Policy, as well as an attorney from the solicitor’s office.

The purpose of the meeting was to engage the public in dialogue regarding Section 503 of the Rehabilitation Act. Once the meeting was opened up to the floor there was significant discussion about the obstacles that employers face regarding recruitment of people with disabilities as well as the difficulties associated with soliciting information on accommodations. Several attendees articulated that the loss of America’s Job Bank has made life more difficult for Federal contractors to comply with the requirement to post open jobs with state and local employment agencies. Other attendees spoke up and suggested that the intention of eliminating America’s Job Bank was not only due to budget constraints but also to allow state agencies to evolve so the national board was not necessary.

Ms. Shiu and her team were very engaged in the dialogue and asked many questions based on the attendees concerns. It was made clear that the new leadership is using Town Hall Meetings and webcasts to gather input on what works and what doesn’t from the public perspective.

In conclusion, it was clear that Ms. Shiu has a plan in mind and that this administration has a very different agenda than the previous. The new OFCCP is certainly interested in the most egregious systemic offenders, but is also interested in returning to the days of enforcing classical affirmative action principles and all of its associated rules/regulations (and not just adverse impact). This focus suggests a reduction in the use of Active Case Management and an increase in the full desk audit methods of the past.

Ms. Shiu articulated to the attendees that “It is a new day at the Department of Labor and OFCCP.” Based upon the audits we have seen lately, we couldn’t agree more.

Monday, February 15, 2010

Compliance Officers are Requesting Records on Other Personnel Actions

By Marife Ramos

One of the recent atypical activities from the OFCCP is the compliance officer conducting detailed data reconciliation. That is, compliance officers “doing the math.” They look at the contractor’s previous year’s employee representation, add/subtract the transactions, and “expect” the numbers to match the current employee representation. (Please see blog dated February 5, 2010 for various other OFCCP requests and activities that make the Federal contracting community cringe).
When a compliance officer attempts to reconcile numbers based solely on the information contained in the AAP, more often than not, the starting and completing numbers will not add up. This is due to the fact that the AAP reports do not account for transfers, demotions, job eliminations, and/or acquisitions (and other personnel activities) that occurred in a job group. In previous audits, contractors were simply asked to explain the discrepancies. A brief explanation of these other activities used to be enough but not anymore. Contractors are now being asked to provide the actual data that will, so to speak, balance the equation. The question now becomes: “Since transfer and/or demotion data are not part of the AAP (nor in the itemized listing of the audit letter), can contractors argue against providing such data sets?”

Let’s take a look at what the regulations [CFR 60-2.17(b)] states:
"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…(2) personnel activity (applicant flow, hires, terminations, promotions, and other personnel actions [emphasis added]) to determine whether there are selection disparities…"

Consider these two things: 1) The audit letter only requests data for applicants, hires, promotions, and terminations and there is no mention of other personnel activities; however, 2) the regulations state that contractors are required to analyze other personnel actions as part of their affirmative action program obligation. Your direction? Clear as mud.

The advice would be that the regulations are in place and there is not much a contractor can do to argue against them. Contractors have always been expected to have other personnel actions tracked and analyzed and therefore, be able to provide all data in the event of an audit. Besides, if the data can explain the discrepancies in numbers then why not provide it? Now, if the data cannot explain the discrepancies, as is often the case, the contractor may have some explaining to do in regard to their recordkeeping systems and a Notice of Violation from OFCCP becomes likely.

Friday, February 12, 2010

OFCCP Corporate Management Review Initiative Defined in New Budget Plan

The OFCCP has unveiled a new budget plan that defines their goals for 2010-2011 and initiatives that could have a tremendous impact on larger organizations. In the excerpt below, OFCCP is stating they plan to conduct multiple establishment reviews of single organizations that will span a two-year time period. The premise being that OFCCP wants to determine how a series of reviews for one organization in one-year will impact compliance reviews for the same organization in the second year. Making this initiative even more eye-catching is that the OFCCP has indicated the reviews will cover multiple, randomly selected sites in the first year and a different set of locations in year two to determine the impact of the first series of audits.

A critical question that is not addressed is if the organization will be forewarned of these audits. It will also be interesting to see if the contractor community will claim that this new format is burdensome.

Quoted from the OFCCP FY 2011 CONGRESSIONAL BUDGET JUSTIFICATION:

OFCCP will also conduct a corporate, multi-establishment compliance evaluation approach designed to assess whether OFCCP’s activities within a single corporation leads to increased compliance by the other establishments within the same corporation. Using the Corporate Management Compliance Evaluation list, which uses neutral selection criteria, OFCCP will identify the first eligible corporation on each regional list for a multi-establishment corporate-wide review. A random sample of establishments from each corporation will be drawn for compliance evaluations. One half of the establishments will be scheduled for compliance review in FY 2010; the second half of establishments will be scheduled in FY 2011. Using this approach, OFCCP will measure whether subsequent evaluations result in a higher compliance rate than those of the first group, indicating that OFCCP has had some impact on corporate practice.

Wednesday, February 10, 2010

OFCCP Budget Plan for Fiscal Year 2011

The Office of Federal Contract Compliance Programs (OFCCP) has posted its latest budget plan for the next fiscal year. The document identifies several very important pieces of information that contractors should take note of. In the budget document are the 2009 recovery figures ($9 million down from $67 million due to a change in reporting structure), the number of audits completed and forecast, in addition to early results from the American Reinvestment and Recovery Act(ARRA) audits. Readers will also see planned initiatives for 2010 and 2011.

www.dol.gov/dol/budget/2011/PDF/CBJ-2011-V2-04.pdf

Biddle Consulting Group will post more details in subsequent blogs

Court Approves $6.2 Million Distribution in EEOC v. Sears Disability Settlement

235 Former Employees Terminated at End of Workers’ Compensation Leaves of Absence to Share Settlement Proceeds After Participating in Claims Process

See EEOC Press Release here:

http://www.eeoc.gov/eeoc/newsroom/release/2-5-10a.cfm

CHICAGO – The U.S. Equal Employment Opportunity Commission (EEOC) today announced court approval of the distribution of a $6,200,000 compensation fund in the landmark Americans With Disabilities Act (ADA) litigation between the EEOC and Sears, Roebuck & Co. The distribution is being carried out pursuant to the terms of a consent decree approved by Federal District Judge Wayne Anderson on September 29, 2009. In its lawsuit against Sears, the EEOC had alleged that Sears maintained an inflexible workers’ compensation leave exhaustion policy and terminated employees instead of providing them with reasonable accommodations for their disabilities, in violation of the ADA. The case resulted in the largest ADA settlement in a single lawsuit in EEOC history

Friday, February 5, 2010

Changes Happening at Office of Federal Contract Compliance Programs (OFCCP)

All Federal contractors should be aware that OFCCP is making dramatic changes under the leadership of Patricia Shiu. Desk-audit procedures are being changed behind the scenes and while formal documentation on any policy change has yet to be released, here is some of what we are seeing at Biddle Consulting Group (BCG):

• There has been a surge in the number of desk audits being converted into formal on-site reviews. OFCCP has stated that on-site reviews are now “Standard” and provide a more efficient audit process. It is unclear if OFCCP is attempting to make every audit an on-site although that would seem to be unwieldy for both the OFCCP and the contractor. BCG is attempting to get a response from OFCCP national office to determine any changes in policy.

• OFCCP is focused on job postings, specifically postings for veterans and the disabled. OFCCP is often asking for evidence of job postings in addition to the results of those postings. Related to postings, OFCCP is being very aggressive about Action Oriented Programs (AOP’s) and how successful they have been for contractors. OFCCP is even asking for documentation of the AOP’s listed in the narrative.

• Recent requests for extensions on the 30-day delivery of the AAP after a desk audit letter has been received are being rejected at a seemingly higher rate. While some are still being granted, there has been an increase in rejections. In previous years, rejections were virtually unheard of. Also, OFCCP has threatened very low tolerance for plans not submitted on time.

• One of the more difficult areas that OFCCP is focusing on is data reconciliation. OFCCP is comparing plan data at the beginning and at the end of the plan year to see if the transaction counts result in the expected number(s). For example, if there were ten (10) people in a job group at the beginning of the year, and there were no hires and two (2) terminations in the job group, then OFCCP expects there to be eight (8) people in the job group in the new AAP. This form of data management can be very tricky because people move into and out of job groups and plans for many reasons beyond the basic hire, promotion, or termination. For instance, a transferred or merger related employee may not be noted in one of these types of transactions.

• Since the new leadership has taken over at OFCCP, the number of audits closing has seemed to slow to a crawl compared to the brisk pace of audit closures at this time last year. Whether this is a coincidence or not is unknown.

• While OFCCP continues to focus on hires analyses where possible, BCG is seeing more questions about layoffs and terminations. Even small sample sizes are being scrutinized.

• OFCCP is publicizing their high profile hiring case against Bank of America. See here for details: http://www.dol.gov/_sec/newsletter/

• The OFCCP website has changed to http://www.dol.gov/ofccp/index.htm and readers should note that many of the answers under the Frequently Asked Question (FAQ) section have been updated. Including a broad answer regarding the use of a compensation “Trigger” test.

Tuesday, February 2, 2010

OFCCP Posts the Definition of the Compensation "Trigger" Test

After several years of debate and speculation, the OFCCP has finally posted an answer to the question regarding initial compensation analyses in a desk audit. While it may not provide an exact methodology, the answer does provide the basic formula. The details can be found here:

http://www.dol.gov/ofccp/regs/compliance/faqs/emprfaqs.htm

HAS OFCCP DEVELOPED PROCEDURES FOR CONDUCTING A DESK AUDIT OF A CONTRACTOR'S COMPENSATION PRACTICES?

Each of OFCCP's regional offices uses the same basic procedures for conducting a desk audit review of a contractor's compensation practices. Generally speaking, during a desk audit, the agency will examine the following three criteria when evaluating a contractor's compensation practices:

* Whether, for at least one pay division, there is a specified difference in average compensation between the groups being compared and, if so, whether at least one group appears to be adversely affected.
* After combining the pay divisions meeting the above condition, whether the number of employees in the non-favored group is greater than a specified number and represents a specified percentage of the total employees in that group in the overall workforce.
* Whether the overall percentage of the group most adversely affected in the combined pay divisions is larger, by a specified amount, than the overall percentage of the other groups adversely affected.

The specific thresholds used in each of the three criteria above are not static, but rather are subject to change as OFCCP continues to evaluate its targeting methodology.

OFCCP updating their FAQ's for 2010 with important news

The OFCCP has added two new responses under the Frequently Asked Questions part of their website that Federal contractors need to be aware of. See text below from OFCCP website under http://www.dol.gov/ofccp/regs/compliance/faqs/csalfaqs.htm

IS IT POSSIBLE FOR ESTABLISHMENTS OTHER THAN THOSE LISTED ON THE CSAL TO BE SCHEDULED FOR A COMPLIANCE EVALUATION DURING THE SCHEDULING CYCLE?

Yes. The list of establishments provided with the CSAL is not all-inclusive for a variety of reasons. For example, company establishments that are not clearly associated with a contractor's parent organization through currently-available EEO-1 Reports, such as those that have been acquired through recent mergers, are not included on the CSAL. In addition, the CSAL does not identify whether an establishment of a contractor has been selected for evaluation because of a contract award notice, a directed review, as a result of conciliation agreement monitoring or an individual complaint, or as part of the agency's Corporate Management Compliance Evaluation (CMCE) or Functional Affirmative Action Plan (FAAP) initiatives.


IS THERE A LIMIT ON THE NUMBER OF ESTABLISHMENT EVALUATIONS THAT CAN BE SCHEDULED PER CONTRACTOR?

No. Beginning in FY 2010, there is no limit on the number of compliance evaluations that OFCCP may schedule or conduct per contractor during a fiscal year.

New Recommended Resource for Federal Contractors

There are very few comprehensive resources out there regarding Affirmative Action Planning for Federal contractors. Biddle Consulting Group has been recommending one book for many years and there is a new edition out there that we believe every contractor should own. Bill Truesdell is the author of Secrets of Affirmative Action Compliance and it is an excellent resource for quick access to all the requirements that contractors need to know. AAP's, Definition of an Applicant, EEO-1 and Vets-100, it's all there.

See details below:

You can purchase this book directly from us or from Bill's website:

www.management-advantage.com

Details are here:

THE #1 AAP REFERENCE FOR FEDERAL CONTRACTORS!

The 8th Edition was featured as Member's Choice by The SHRM Store in August 2009 and on SHRM's Best Seller List in September AND November 2009 How to write your plan narrative, prepare your statistical reports and manage a compliance review, all in one concise reference book. The latest (2010) on federal regulations from the U.S. Department of Labor.

Author: William H. Truesdell, SPHR

If you are a vendor or supplier to the government, you may be required to have a written Affirmative Action Program. If you fit into any of these categories, you need the new ninth edition of

Secrets of Affirmative Action Compliance

* 50 employees and $50,000 or more in total contracts.
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* Any construction contractor with federally assisted construction contracts in excess of $10,000.
* Receive a contract or subcontract (at any tier) valued at $1 or more from the American Recovery and Reinvestment Act (ARRA).

Federal regulations have changed! If your current AAP doesn't address these new requirements, you will not be in compliance. (41 C.F.R. 60 changes)

You need our book ...

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If your organization has chosen to do business with federal, state or local governments, this book is going to be invaluable to you. Many federal government contractors (vendors and suppliers) are required to have a written Affirmative Action Program for minorities and women. Two additional written AAP documents are required for Disabled and for Veterans. This book shows you how to meet all three requirements in one document. Use the checklists to conduct your own internal compliance review so you can detect problems before they are pointed out by compliance officials. Use the diagrams, flow charts and forms to both understand and implement your own affirmative action programs as you determine they are necessary. Help your organization meet legal requirements.