Brief Thoughts on the Updated OFCCP Scheduling Letter
OMB Approves New OFCCP Scheduling Letter
After years of waiting, OFCCP has finally received approval from the Office of Management and Budget (OMB) to enhance their scheduling letter for use in desk audits. With the previous letter having been expired and renewed many times over the last few years we can expect the new letter to go into effect right away. While the initial reaction to these changes will no doubt be severe considering the volume of changes being made, the reality is that the changes can also be perceived as OFCCP simply being more efficient with what they are already doing. Call it our "Cup is half-full" approach to the changes.
Here Is a Short Summary Of The Changes (please see full letter and itemized listing for details):
1. The Scheduling letter will allow contractors to submit personnel activity by either job group or job title. OMB rejected the request to require contractors to submit the data by job group and job title.
2. Contractors will continue to provide transaction data by sex; however, they will submit race and ethnicity information using five specified categories instead of two broad categories (i.e., minority and nonminority).(Note the listing of five categories excludes the Native Hawaiian/Other Pacific Islander and Two or More categories)
3. Compensation data, formerly Item #11 in the scheduling letter and now Item #19, which in its previous form required contractors to submit compensation data in the aggregate, now requires contractors to submit individualized employee compensation data as of the date of the workforce analysis in the Affirmative Action Program, also noting the job title, job group and EEO-1 category. In addition, OFCCP changed the definition of compensation to include consideration of hours worked, incentive pay, merit increases, locality pay, and overtime.
4. The new requirements under VEVRAA and 503 are in the Itemized Listing with eight (8) related request items.
How Do These Changes Affect Federal Contractors
While all of these changes are significant, it is fair to say that OFCCP has provided plenty of warning regarding their expectations for all of the updated requirements in the itemized listing. OFCCP has been aggressively trying to define, pursue and identify compensation disparities for over 20 years. Regarding transactions, every contractor that has not been hiding under a rock for the last 10 years knows that OFCCP make almost all of their money from hiring discrimination linked to collecting and analyzing volumes of applicant and hires data. Since hiring discrimination, particularly in entry-level jobs, is where OFCCP generates their big press releases and high-dollar settlements, contractors must expect OFCCP to continue to enforce the strategy of seeking out contractor data. Another significant factor in the scheduling letter will be the addition of the requirements associated with the updated VEVRAA and Section 503 of the Rehabilitation Act regulations. Again, OFCCP has been pushing out information publicly since the introduction of the proposed regulations in 2011. Now that the Veteran and Disability changes are in effect or 2014, it makes sense that the OFCCP would have the Itemized Listing updated prior to their claim that aggressive enforcement will begin in 2015.
So how should contractors react to the latest big change in compliance? Frankly, with no real surprises and despite the common (and realistic) belief that compliance as a whole has become incredibly challenging, the reaction can only be determination to get the needed resources in place as quickly as possible. Fair or not, the requirement for advanced record keeping is in effect and contractors need to get ahead of the game through detailed reviews of their ability to collect the necessary data and adaptation to the required output prior to receipt of the new scheduling letter. For those contractors who feel blindsided or overwhelmed by the change, support for contractors is at their fingertips or a phone call away. Contractors can continue to obtain all the information they need through the many conferences, webinars and social media outlets that are available to them. Here at OutSolve we are always training through webinars, articles, blogs and more.
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Good luck out there!