You Have Got to Read This - FY 2012 OFCCP Budget Justification Has Just Been Released!

by Patrick Nooren. Ph.D., Executive Vice President
Biddle Consulting Group

As with previous years, the place to go to find real insights regarding what lies ahead with the OFCCP is in their congressional budget justification. This document outlines the Agency’s initiatives for the upcoming year(s) and is usually full of nuggets of information . . . and this year is no exception.

While there will be modest increases in full-time employees (11) and overall budget ($3.624M) when compared to previous years, the OFCCP is undertaking several significant initiatives that will have lasting impact on the contractor community. They include (but are not limited to):

1. Electronic Submittal of AAP Data: The OFCCP will continue to focus on using technological advancements to increase the depth and breadth of their enforcement. To this end, they are continuing to fund advancements in the Federal Contractor Selection System (FCSS), the primary tool used to identify which contractors will receive scheduling letters in any given year. The Agency envisions that AAP data (e.g., hiring, promotions, terminations, workforce, compensation, etc.) will be submitted electronically by contractors via a secure web portal and that the data will be analyzed automatically, resulting in a much more efficient and focused selection process for audits. For obvious reasons, it will become more important than ever to analyze your data prior to submittal and to ensure that your organization completely understands the extent of any “issues.” The stage has already been set with the electronic submittal of EEO-1 data. It appears that AAP data is next.

2. Compensation Equity: The OFCCP is making pay equity a top priority by developing a web-based Compensation Data Collection Tool that would allow the Agency to better identify indicators of pay disparity. While the final scope of the data to be collected is still to be determined, variables such as gender, race, salary and/or average salary, and variance (a statistical term for average amount of variation in salaries) will likely be on the list. This data will be collected on 70,000 – 110,000 contractors (depending on the threshold for submittal) and allow the OFCCP to identify statistically significant disparities and focus their enforcement on those contractors with the highest likelihood of discrimination. (Note: The OFCCP intends to also make this data available on-line, in a searchable database, to improve transparency and public disclosure. Given the highly confidential nature of this data, we eagerly await to see just what data is made available.)

3. Increased Enforcement/Education: The OFCCP intends to conduct significantly more full desk-audits, additional on-site investigations, focused reviews, and stakeholder education.

4. Misclassification of Workers: The OFCCP will be focusing on efforts to deter, detect, and eliminate worker misclassification as independent contractors. They are allocating over $3.5M and 11 full-time employees to this initiative.

5. Regulatory Revisions: In FY 2012, OFCCP is scheduled to: 1) finalize its revision on 41 CFR Part 60-4 which impacts contractors and subcontractors in the construction industry, 2) finalize its revision on 41 CFR Part 60-741 which protects workers with disabilities and finalize and publish its revision on VEVRAA (summer 2011).

6. Compliance Manual Updates: Updates to the OFCCP compliance manual are ongoing and will include revised enforcement procedures to both broaden and deepen the scope of future compliance evaluations. The Agency believes that while this approach may result in fewer overall audits, it will likely result in more findings of discrimination. It’s doesn’t take an expert to see that this will also result in lengthier and more time-intensive investigations.

Editor’s Note: Electronic submittal of AAP and compensation data, if executed, would be a monumental advancement for the OFCCP. It will accomplish what has been long sought within the Agency; automation of the preliminary AAP analyses resulting in a rank-ordered list of the likeliest offenders. This would mean that contractors can no longer submit data to the OFCCP and “hope” that it somehow evades scrutiny. Under this model, all data would be analyzed, and all potential problem areas would come to light. Given this, it is imperative that contractors ensure their AAP data accurately reflects reality and that they conduct their own analyses prior to submittal. Do not hesitate to contact Biddle Consulting Group at 1.800.999.0438 should you have any questions.