Proposed changes are substantial and address all three AAPs regarding data submission relating to promotions, terminations, compensation, hiring policies and practices

On November 21, 2022, the Office of Federal Contracts Compliance Programs (OFCCP) published a revised Scheduling Letter and Itemized Listing for Office of Management and Budget (OMB) approval. The agency also published a supporting statement and a revised compliance review scheduling letter.

Some of the proposed changes include the following:

• Adding an option for the scheduling letter to be issued via email with a read receipt requested.
• Requesting that contractors submit their Affirmative Action Plans (AAPs) and itemized listing data electronically.
• Requiring contractors to provide policies and practices relating to all employment recruiting, screening, and hiring, including the use of artificial intelligence, algorithms, automated systems, and other technology-based selection procedures. [Item 19 new]
• Calling for all contractors with “campus-like settings,” including higher education institutions, hospitals, and information technology companies as well as other work environments in which a contractor maintains multiple AAPs to provide OFCCP with all AAPs prepared within a single city.
• Modifying language addressing the consequences for failing to submit the requested data within the 30-day period. Allows OFCCP to initiate enforcement processing for failure to submit timely information.

Executive Order 11246 proposed changes include:

• Expanding the scope of information sought to support the determination of minority and female availability. Requires the contractor to “provide documentation to OFCCP demonstrating the consideration of the most current and discrete statistical information available, its reasonable recruitment area, and the pool of promotable, transferable, and trainable employees.”
• Elaborating on promotion information to provide for each job group or job title, the total number of promotions by gender and race/ethnicity and type of promotion (competitive or non-competitive).
• Expounding on termination information to provide for each job group or job title, the total number of terminations by gender and race/ethnicity, broken down by termination reason.
• Includes a request for the total number of employees, by gender and race/ethnicity as of the start of immediately preceding AAP year for each job title or job group [Item 20(3)]
• Requiring the contractor to provide a list of all action orient programs used to address the problems areas related to the annual analysis (42 CFR 60-2.17(b),[ Item 7 New].

The proposed compensation related changes, as identified below, are consistent with Directive 2022-01, as revised.

• Expanding compensation data reporting from one year to two years. Requiring reports from both the current and prior dates of the workforce analysis or organizational profile.
• Providing compensation data for all employees, including full-time, part-time, contract, per diem or day labor, and temporary employees including those provided by a staffing agency.
• Requiring contractors to provide documentation to demonstrate that its compensation systems were evaluated, including the type/methodology of analysis, when it was completed, number of employees and categories of employees includes in the analysis. [Item 22 new]
  
  

The following Section 503 and VEVRAA AAP changes have been proposed:

• Increasing the information contractors must submit to support their Section 503 utilization analysis. Where underutilization of individuals with disabilities has been determined, contractors must “provide a description of the steps taken to determine whether and where impediments for equal employment opportunity exist.”
• Requiring contractors to identify whether their recruiting efforts of qualified individuals with disabilities and protected veterans has been effective. When they have not been effective, contractors must provide documentation on how they will use alternative methods of recruiting.

Public comments on the proposed changes must been submitted by January 20. 2023 and can be submitted at www.regulations.gov or by mail to Tina T. Williams, Director, Division of Policy and Program Development, OFCCP, 200 Constitution Avenue NW, Room C-3325, Washington, DC 20210.

OutSolve’s Take 

OFCCP claims to be proposing these changes “as part of its continuing effort to reduce paperwork and respondent burden,” however, the changes are significant and may prove to be burdensome for contractors preparing the desk audit submission within the 30-day period. If approved, contractors will need to submit more back-up documentation to support many of its employment decisions, policies, and practices.

We further emphasize the importance of compliance with the annual pay equity analysis defined by Directive 2022-01, as revised. The requirements are now included in the proposed changes to the Scheduling Letter enabling OFCCP to collect the information in future audits. In 2023 and beyond, newly scheduled audits will be subject to the revised Scheduling letter. It is imperative that contractors plan to produce a pay equity analysis to submit the required information for compliance.

OutSolve is available to assist clients prepare for these changes. Employers with campus-like settings may want to contact us to evaluate existing AAP development and analysis, given the proposed requirement to submit all plans within a single city.   For additional guidance and support, please contact info@outsolve.com or by calling 888-414-2410.

If you feel that these changes will create a burden to your organization, we strongly suggest that you provide comments to the OMB.