More than three years after the Office of Federal Contract Compliance Programs (OFCCP) first announced its intent to issue a new Scheduling Letter and Itemized Listing, the Agency finally has obtained approval to do so from the White House Office of Management and Budget (OMB). The OFCCP’s Scheduling Letter provides a contractor with notice of its selection for a compliance evaluation (audit), and the Itemized Listing constitutes OFCCP’s standard initial request for submission of the contractor’s Affirmative Action Plan and supporting personnel activity and compensation data. OFCCP announced the OMB approval in a September 30, 2014 Notice, and published the final versions of the Scheduling Letter and Itemized Listing on October 1, 2014.
As a practical matter, OFCCP already has been requesting much of the information sought in the new Itemized Listing in the form of supplemental data requests submitted by the Agency in most OFCCP audits. Nevertheless, OMB approval will make the changes officially part of OFCCP’s standard operating procedure for compliance evaluations on a go-forward basis. OFCCP claims that the “limited number of substantive changes” approved by OMB actually reduce the cost and burden imposed on contractors and maintain contractor flexibility, and estimates that responding to the new Itemized Listing will take an average of 27.9 hours total. On its face, the new Itemized Listing demonstrates, however, that the new standardized requests for information are quite onerous, may require contractors to change their record keeping practices, and responding undoubtedly will take significantly more time than OFCCP estimates.
For example, items 7 through 14 of the new Itemized Listing ask contractors to submit detailed data related to their record keeping, outreach and recruitment efforts, and compliance with OFCCP’s new regulations governing individuals with disabilities and protected veterans (commonly referred to as Section 503 and VEVRAA). As the contracting community is aware, these regulations first became effective earlier this year, contain many uncertainties, and many contractors are still struggling with the nuances of compliance. Similarly, item 18 of the new Itemized Listing, which asks contractors to submit data related to applicants, hires, promotions and terminations, no longer permits contractors to submit such data by minority vs. non-minority totals. Instead, contractors must break down the data into five specific race/ethnicity groups (including African-American/Black, Asian/Pacific Islander, Hispanic, American Indian/Alaskan Native and White).
Additionally, the new item 19, which asks for contractors’ compensation data, seeks detailed, precise compensation data of individual employees, including things such as base salary, hours worked, bonuses, commissions, merit increases and overtime. Previously, the Itemized Listing sought only aggregate compensation data. The new request also asks contractors to identify the factors used to determine employee compensation, and asks contractors to submit copies of any compensation-related policies. According to OFCCP, collecting individualized compensation data will allow the agency to engage in a broader and deeper analysis of pay. This new request is consistent with numerous statements by OFCCP officials emphasizing the agency’s focus (along with the White House and the Equal Opportunity Employment Commission) on ending pay disparities between men and women. See, e.g., National Equal Pay Task Force Report (June 2013).
Finally, the new Itemized Listing includes new requests related to policies. For example, the new item 20 asks contractors to submit copies of reasonable accommodation policies, as well as “documentation of any accommodation requests received and their resolution, if any.” Similarly, items 21 and 22 ask contractors for detailed information regarding their most “recent assessment” of their personnel policies and processes, includes dates, resulting changes, and the date scheduled for the next assessment.
The best way to successfully pass an OFCCP audit is to begin preparing for it long before OFCCP schedules it. Accordingly, contractors should familiarize themselves with the new Itemized Listing so they are aware of their obligations ahead of time, and can assess how they would respond if OFCCP comes knocking.