OFCCP Proposed Changes Could be Costly for Contractors

The Office of Federal Contract Compliance Programs has recently proposed five regulations which could, if enacted, result in unprecedented impact on federal contractors. In addition, enforcement efforts by OFCCP to ensure compliance with existing programs have increased significantly in the past year. An OFCCP investigation can be extremely expensive and can take years to complete. OFCCP investigations are not complaint-driven, but are agency-initiated evaluations that are broad-reaching and exhaustive.

The OFCCP resides within the US Department of Labor. It is charged with enforcing employment discrimination and affirmative action regulations for virtually every company that does business of any kind with the federal government. The President of the Equal Employment Advisory Council, which is made up of representatives of nearly 300 federal contractors, testified recently that the proposed changes are likely to have an adverse affect on the very people they are intended to assist, and warned that costs for implementation have been underestimated.

What follows is a very general summary of the proposed changes. This is a complex subject with many technical nuances, and we encourage you to consult your attorney for assistance with your equal employment and affirmative action policies and programs.

The five changes proposed by the OFCCP in 2011 include:

• Rescinding existing guidance on procedures and standards for investigation of systemic compensation discrimination
• Requiring the establishment of targets for the employment of veterans with attendant requirements for documenting the identification, recruitment and treatment of veterans
• Imposition of broad new compensation reporting requirements on contractors
• Requesting permission from OMB to greatly expand the scope and amount of data requested of contractors at the outset of compliance evaluations
• Imposition of a 7% hiring goal for individuals with disabilities and attendant obligations for documenting the identification, recruitment and treatment of individuals with disabilities

For more information on the OFCCP, visit the OFCCP FAQ.