I Can See Clearly Now: The OFCCP’s Latest Directives Seek to Increase Transparency

For the second month in a row, the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has issued guidance to update materials available to federal contractors and subcontractors. On September 19, 2018, the OFCCP issued two broad directives aimed at improving transparency and communications and to implement the highly-anticipated ombud service. These directives respond to contractor complaints related to the length and process for OFCCP audits.

First, Directive 2018-08, Transparency in OFCCP Compliance Activities, aims to “ensure transparency in all stages of OFCCP compliance activities to help contractors comply with their obligations and know what to expect during a compliance evaluation, and to protect workers from discrimination through the consistent enforcement of OFCCP legal authorities.” In doing so, the directive sets forth the roles and responsibilities of OFCCP staff, and the specific steps that should be taken to ensure transparency at every step of each compliance evaluation, from scheduling and the pre-desk audit to conciliation. Below is a summary of the directive’s key initiatives.

  • Scheduling: Delayed until 45 days after issuance of the Corporate Scheduling Announcement letters (CSAL) to give contractors more time to prepare for an evaluation.
  • Pre-Desk Audit: Allows for 30-day extension for contractors to provide OFCCP with supporting material related to Executive Order 11246, if timely requested.
  • Pre-Onsite: Requires OFCCP to include a basis for any request for supplemental information and be reasonably tailored to the areas of concern with a reasonable amount of time to respond.
  • Offsite Analysis: OFCCP will begin the offsite analysis immediately after completing the onsite and maintain regular contact with the contractor to keep them informed.
  • Conciliation Efforts: OFCCP will take a collaborative approach with contractors during exchange of information and make good faith efforts to engage the contractor to conclude compliance evaluations more efficiently.

The second directive, Directive 2018-09, OFCCP Ombud Service, announced the long-awaited and planned implementation of an Ombud Service. The Ombud Service was developed based on feedback from several town halls and stakeholder meetings conducted in September 2017 and January 2018. This is part of the OFCCP’s “effort to increase transparency and communication with agency stakeholders.” The directive explains that the Service will “facilitate the fair and equitable resolution of concerns raised by OFCCP’s external stakeholders, conduct independent and impartial inquiries into issues related to the administration of the OFCCP program, and propose internal recommendations to continuously improve the quality of services OFCCP provides to its stakeholders.”

The directive also defines the roles and responsibilities of the national office and the OFCCP Ombud in establishing the Ombud Service, which include:

  • “Listen to external stakeholder concerns about OFCCP matters and suggestions for improvements[;]”
  • “Promote and facilitate resolution of OFCCP matters at the district and region office level[;]”
  • “Work with OFCCP district and regional offices as a liaison to resolve certain issues after stakeholders have exhausted district and regional office channels”; and
  • “Refer stakeholders to the OFCCP Help Desk for routine compliance and technical assistance inquiries[.]”

Importantly, the Ombud Service will not advocate, provide legal advice, conduct compliance evaluations or complaint investigations, participate in conciliation agreement negotiations, or become involved in staff discipline.

These two directives follow on the heels of a trio of directives released in August 2018 that were similarly aimed at increasing transparency and providing clarity—though they targeted narrower, specific programmatic elements and procedures.

  • Directive 2018-05 (which we covered in detail here) replaced Directive 307, outlining “standard procedures for reviewing contractor compensation practices during a compliance evaluation and emphasiz[ing] OFCCP’s priority of eliminating pay discrimination through enforcement by OFCCP and compliance by contractors through proactive self-auditing.” The OFCCP analysis of the directive explains that it specifically aims to provide transparency about how the agency determines similarly situated employees, creates pay analysis groups, and conducts analyses including statistical modeling.
  • Directive 2018-06 established a Contractor Recognition Program in order to “recognize contractors with high-quality and high-performing compliance programs and initiatives” and to “highlight specific contractor programs and initiatives that are innovative, have achieved demonstrable results, and that could be taught or incorporated into contractor peer mentoring programs.” Contractors who are recognized “should have a record of accomplishment related to nondiscrimination and providing applicants and employees with equal employment opportunity under the laws enforced by the[OFCCP].” The OFCCP envisions the Contractor Recognition Program as a tool or resource that would provide guidance to its contractors by “highlight[ing] implementable best or model contractor practices.”
  • Directive 2018-07 established an Affirmative Action Program Verification Initiative. The initiative aims to “implement a verification process with the objective of ensuring that all covered federal contractors are meeting the most basic equal employment opportunity (EEO) regulatory requirement, namely, the preparation of a written affirmative action program (AAP) and annual updates to that program.” The reason for the initiative is that the “OFCCP is concerned that many federal contractors are not fulfilling their legal duty to develop and maintain AAPs and update them on an annual basis” and that contractors not in compliance are not discovered unless and until they are subject to a compliance review.

These directives reflect the OFCCP’s ongoing and anticipated efforts to increase transparency in assisting federal contractors and subcontractors with efforts to comply with federal obligations. Other transparency and communication initiatives that we can expect to see in the future include “a contractor mentoring program that uses contractors to help their peers improve compliance, and other initiatives that provide opportunities for contractors to collaborate or provide feedback to OFCCP on its compliance assistance efforts.” Orrick will continue to monitor these developments.