OFCCP Audits Are Heating Up

Terri Swain
September 6, 2011 — 2,274 views  
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The shift in policies of the Department of Labor under Hilda Solis's leadership has finally trickled down into the Office of Federal Contract Compliance (OFCCP). In Dec. 2010, the agency scrapped the Bush administration's Active Case Management Program and adopted an Active Case Enforcement (ACE) Program. As a result, there will be less compliance reviews but the ones scheduled will be rigorous and more will result in an on-site review.

When you get your scheduling letter, you will still have 30 days to gather your documentation for desk audit.  However, the OFCCP will be doing a little homework of their own. They will be contacting the EEOC, Wage and Hour, state/local Fair Employment Practice agencies, etc. to look at your complaint history over the past three years to determine if there is any pattern/practice of non-compliance with government regulations and agencies. An on-site review will not be limited to any of the indicators that triggered the review.  And in the good news category, I-9s are no longer being reviewed by the OFCCP (of course you should still maintain them correctly).

Our practice during 2011 has shown that the OFCCP is digging deeper than we have ever seen. Compliance Officers are reviewing census codes, job titles, EEO-1 codes and the recruitment areas you are using. The recruitment process is scrutinized to make sure you demonstrate good faith efforts; are defining applicant correctly and recruiting processes are ADA accessible. Any adverse impact in any part of the employee cycle (Applicant, hire, promotions, terminations) must be explained and can be delved into.

Compensation equity remains a hot area of review. The Bush administration's Tipping Point/Trigger Test has been replaced with a simple test that identifies either a 2 percent difference in pay or a $2000 difference in pay in the data submitted. Of course, this is done at the job group or salary grade level, which means EVERY COMPANY we work with, has been asked for further information relative to compensation and compensation disparities.

The OFCCP has some proposed rules to change Veteran reporting. Significantly, that federal contractors be required to set goals for veteran hiring and track applicants by veteran status, similarly to what is done for females/minorities.
This is enough to make your head spin! So what can you do to be prepared for this new era?

If you are an Affirmative Action Employer, for heaven's sake - keep your plan up to date. Review all data for accuracy when it is completed and make sure that you share your results with your management team.

Make sure you are keeping applicant flow and defining applicant correctly. Only include those that are true applicants under the OFCCP's definition.
Develop a strategy for meaningful good faith efforts for females, minorities, disabled and veteran's and document them. We find that a lot of our clients have moved to centralized recruitment functions. There is often a lot of high-level diversity strategy but it's often not pushed down to the local level or it's not documented. When audited, make sure you include these good faith efforts in your data submission.

Assure that your recruitment process is accessible. If you are requiring people to apply on line, have a method for those who can't use the on line system to apply just as expediently as those who do. Include accessibility statement on your career page.

Make sure you are listing your jobs with the State job services where you operate. This is a requirement. Since America's job bank has gone away (which was a free centralized board), there have been other paid services that have sprung up if you are a big company. If you are a small company, develop a relationship with your local job service and find a way to get your postings to them.

Compensation - this is the toughie. Compensation equity review is often difficult to do because all of your data points don't reside on your HRIS. For example, previous year's experience a person brings to the job or education. Another complicating factor is when your organization has been the subject of merger/acquisition/divestiture/bankruptcy, etc. WHO HASN'T?

Adding compensation equity review as part of your compensation cycle is key. Where inequities exist because of business conditions and not because of discrimination, have a plan for fixing them. The OFCCP will take the stance that you didn't have anything to do with past comp, but when they became your employee you had the obligation to fix any past inequities. That is straight from an auditor's mouth!

EPS has successfully assisted clients through complex plan generation and tough OFCCP audits. Please let us know if we can assist you.

Terri Swain

Employment Practices Solutions, Inc.

Terri Swain is an equal employment opprotunity/affirmative action expert. Terri consults with clients on on the development of AAP's and audits. She began her career in human resources via government compliance as an investigator for the EEOC.