Q&A on 2013 OFCCP budget and possible changes in Affirmative Action
The Bloomberg B&A recently interviewed the OutSolve team about the OFCCPs 2013 Budget Plan, and today under the Labor and Employment blog they posted the results here:
Q&A: Reading OFCCP's Tea Leaves
Monday, March 12, 2012
Chris Lindholm, a consultant on affirmative action policies for federal contractors, discusses the Office of Federal Contract Compliance Programs' budget justification for fiscal year 2013 that was recently submitted to Congress. The document outlines the agency's funding proposals and enforcement priorities.
In the budget request, OFCCP asked Congress for $106.4 million for fiscal year 2013, a slight jump from the $105.2 million it received in fiscal 2011 and 2012. The agency also plans to conduct 4,530 compliance evaluations in fiscal 2013, a 12 percent increase over the 3,980 reviews targeted for fiscal 2012.
"In the previous budget document published in 2011, readers were surprised by the bewildering and unprecedented number of new initiatives that OFCCP was undertaking," said Lindholm, the vice president of compliance at OutSolve, a Louisiana-based affirmative action consulting firm. "The 2013 version appears tame by comparison, with few new initiatives and more focus on staying on course with the proposals related to recruitment and hiring of veterans and individuals with disabilities, compensation and construction," he explained in this email Q&A interview.
Bloomberg BNA: Is there anything in the 2013 budget justification that grabs your attention?
Lindholm: The discussion that stands out is under "Strategic Case Selection" where OFCCP states that they are seeking inroads to auditing entire corporations without the constraints of having to audit one establishment at a time.
Representatives from large organizations should take careful note of the following statement on page 10: "Enterprise-wide investigations, based on patterns of violations and identification of egregious violators, will enable the OFCCP to remedy deficiencies across an entire corporate structure, rather than one facility at a time."
The implications here are staggering. While it has not been defined exactly what rules OFCCP would follow if auditing entire organizations, I shudder to think of the possibilities. For example, if OFCCP has been posting six-figure dollar settlements based on issues found at an establishment, what kind of figures are we talking about for a national organization? Also, does this mean that OFCCP could audit an entire company and all of its establishments at one time? How would the company coordinate the resources to support such an audit? Comparing the results across establishments would be a new concept.
Bloomberg BNA: What are the key takeaways from the 2013 budget justification for federal contractors?
Lindholm: The primary takeaway from the budget document is OFCCP is reinforcing the message they have been sending over the last few years. The headline being that OFCCP is an enforcement agency, they are enforcing all of the laws, and they are seeking to update and enhance certain laws including, and especially, those around hiring opportunities for veterans and individuals with disabilities as well as a perceived, ongoing pay equity imbalance.
At least in concept, OFCCP has it right when they say that many of their proposed changes to the regulations are simply a more formal approach to requirements that have been in place for many years.
OFCCP has stated that contractors are not following all of the existing laws. It is hard to blame OFCCP for venting when many of the recordkeeping and outreach violations being handed out over and over are right out of Executive Order 11246, Section 503 of the Rehabilitation Act, Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA) and the Uniform Guidelines for Employee Selection Procedures (UGESP). I am not advocating that the regulations as written are right or wrong. I am simply stating that I understand where OFCCP is coming from.
Bloomberg BNA: What practical advice would you offer to federal contractors seeking to remain in compliance with their affirmative action and nondiscrimination obligations?
Lindholm: The practical advice that I would give to contractors is to not waste time or resources working on changes associated with proposed regulations. The final rule is likely to be very different from the proposed rule and any discussion before those rules become law is just speculation. I would focus on the core concepts of the current regulations and make sure that any particular weaknesses a contractor can identify get addressed. With full-desk audits in effect, I expect that there are more than enough current issues to keep people busy.
It is my impression that contractors are often in survival mode when it comes to compliance. Any regulation that doesn't require specific analysis or a submission to OFCCP ends up sitting on the shelf because people are forced to prioritize and they simply don't have the budget, resources or regulatory knowledge to live by the letter of the law for every line-item on the books.
A contractor should review the regulations, make a list of what the company does and does not have in place and work to close the gap. Combine that effort with all the free support out there, including webinars, articles and everything else the web has to offer and a contractor can, at the very least, come to understand their vulnerabilities so any shortcomings can be communicated to leadership allowing for a realistic strategy to be crafted. As the old saying goes "People don't know what they don't know." That is not a safe place to be in today's compliance world.
Bloomberg BNA: Do you have any further comments on the budget justification or OFCCP enforcement?
Lindholm: Having read notices of proposed rulemaking for many years, there is one thing that I have always felt is lacking, and that is cooperation between the government and the contractors. Regardless of comment periods, Industry Liaison Groups and Town-Hall meetings there is still simmering distrust between OFCCP and the contractor community. Each side continues to express a deep concern the other side doesn't understand the other's needs and the communication gap is widening.
As I recall, OFCCP used something similar to a peer review group at an ILG national conference when considering changes to the functional affirmative action plan rule and it was well received. Federal contractors and the Department of Labor should consider a more aggressive method for helping each understand the other's point of view and work towards an environment of successful affirmative action that is less partisan politics and a little more effective.