OFCCP Wants More Data For Compliance; Seeks to Strengthen Veteran Recruitment

Jun 13, 2011
This article is part of a series called News & Trends.

Two proposals from the Federal Office of Contract Compliance Programs, now open for public comment, seek to require federal contractors and their subs to do more to hire veterans and to provide more information and data in the event of a compliance audit.

So far, neither of the proposals seems to have caused much of a stir, despite nearly unanimous mentions in the various analyses of the additional paperwork and increased obligations on federal contractors.

Littler Mendelson, one of the largest employment law firms in the country, says the OFCCP focus on veterans “significantly expands the obligations of federal contractors and subcontractors.”

Another firm, McGuireWoods, referred to the proposal for additional data as both “burdensome” and “stealthy.” The firm notes in its analysis, “The agency (OFCCP) does not understand the private sector or have any apparent concern about the burdens and confidentiality issues these proposals place on contractors.”

The OFCCP itself estimated it would take 103.2 hours and cost $135,000 to collect and provide all the data that could be requested in the so-called “Scheduling Letter” — the notice of compliance audit — should the changes it wants be adopted. (The OFCCP has to get permission from the Office of Management and Budget for changes to the document and data provisions.)

Complying with the veterans rules is estimated to cost each contractor $396 a year and take 10.7 hours a year.

The paperwork proposals apply to employers with contracts of $100,000 or more and 50 employees. They expand the specific information the OFCCP wants in a compliance audit from 11 to 13 different items and also specifies how the data is to be presented. For instance, application, hire, promotion, and termination data will have to be organized by racial/ethnic group, and not simply by the broader minority/non-minority designation.

With the initial response to the audit notice, the employer must submit all company personnel documents. This would include such things as employee manuals and leave policies. Promotions and terminations (layoffs) will have to include the actual candidate pools for each.

McGuireWoods, a 900-attorney firm based in Richmond, Virginia, calls the proposed changes to the paperwork provisioning proposal “significant and problematic.” Its analysis includes links to the relevant documents from the OFCCP, which detail the specifics.

The veterans proposal is more far-reaching in that it requires contractors to more aggressively pursue the hiring of ex-military workers. Some of the provisions apply to most federal contractors, while some of the paperwork retention requirements have thresholds of 150 employees and $150,000.

Charu Avasthy, a consultant with Berkshire Associates, says the proposals will require contractors to affirmatively pursue the recruitment of veterans, and to have the records to demonstrate their efforts.

“It is an additional burden,” she said, but it’s not a whole new set of regulations. “I see these more as the means of getting the contractor community to increase the outreach and recruitment of the veterans.”

She is one of the authors of a Berkshire Associates whitepaper on the subject: “Effective Veteran Outreach — Understanding the Compliance Requirements.”

Besides broadening some of the recordkeeping, the proposal does require contractors to set annual hiring goals — benchmarks — that are derived from a consideration of such things as the percentage of veterans in a state’s labor force, the number of vets participating in the employment service delivery system in the contractor’s home state, and the contractor’s own assessment of the effectiveness of their recruitment and outreach.

To improve veteran hiring, one of the changes requires contractors to commit to “linkage agreements” with recruitment and/or training organizations, including with veterans’ employment representatives at local employment service offices.

The linkage agreements must be part of an expanded outreach and recruitment effort; the proposal requires a minimum of three specific types of efforts. In addition, contractors must provide notice of job vacancies for most types of positions to state employment services and in the format the state requires.

Candidates, who previously were asked to self-identify as veterans after receiving an offer, now must be invited to self-identify upfront. The proposal also more specifically defines which veterans are covered by the provisions: those recently separated; service medal veterans; disabled vets; and, active duty wartime or campaign veterans.

Berkshire’s Avasthy suggests contractors review the proposals (which are extensive and in legalese) and submit comments before the June 27th deadline. The OFCCP, she says, may modify some of the proposals or even eliminate some provisions after reviewing the comments. In any case, Avasthy suspects any changes that are made won’t go into effect until mid-2012 at the earliest.

The comment period for the expansion of the data and paperwork provisioning requirements for contractors being audited closes July 11. Information on how to submit comments is here.

For the provisions regarding veterans, the comment period closes June 27. The OFCCP details how to submit those comments here.

This article is part of a series called News & Trends.
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