Record Retention Requirements
The Office of Federal Contract Compliance Programs (OFCCP) sets requirements for federal government contractors and subcontractors to preserve employment and personnel records. These records are subject to compliance evaluations performed by the OFCCP, and a failure to properly preserve these records could jeopardize its current and future contracts with the government. Therefore, when creating and managing record keeping systems, it is critical to plan ahead and ensure compliance.
Below is an overview of the specific record retention requirements and guidance on best practices for record management.
What Records Should Be Retained?
Federal contractors and subcontractors must retain records including, but not limited to, those “pertaining to hiring, assignment, promotion, demotion, transfer, lay off or termination, rates of pay or other terms of compensation, and selection for training or apprenticeship, and other records having to do with requests for reasonable accommodation, the results of any physical examination, job advertisements and postings, applications, resumes, and any and all expressions of interest through the Internet or related electronic data technologies as to which the contractor considered the individual for a particular position … .” 41 CFR 60-1.12(a). “Expressions of interest through the internet” is a broad category that may apply to more casual mediums, such as LinkedIn postings or emails concerning employment.
For any record that is retained, a contractor must be able to identify the race, gender, and ethnicity (Hispanic or non-Hispanic) of each employee and, where possible, each applicant. 41 CFR 60-1.12(c). Self-identification at the application stage is the most reliable and preferred method for compiling such information about an applicant. 41 CFR 60-741.42. Although visual observation is an acceptable method to identify demographic data, it may be unreliable.
In addition to personnel records, non-construction contractors and subcontractors with 50 or more employees are required to preserve their written Affirmative Action Programs and documents that demonstrate their good faith implementation efforts for one year. 41 CFR 60-1.12(b).
Which Format Should Be Used to Retain Records?
Contractors and subcontractors may keep paper records or use an electronic recordkeeping system. The regulations described above apply equally to both formats. Regardless of the format, records should be readily available and easily accessible to permit OFCCP access and review during a compliance evaluation or complaint investigation.
How Long Should Records Be Retained?
Federal contractors and subcontractors should maintain employment and personnel records for a period of two years from the making of the record, or the taking of a personnel action, whichever occurs later. 41 CFR 60-1.12(a). Those with fewer than 150 employees or a contract of less than $150,000 must keep these records for a period of only one year from the creation of the record, or the taking of a personnel action, whichever occurs later. 41 CFR 60-1.12(a). If the OFCCP were to initiate a compliance evaluation, the contractor or subcontractor is required to retain all relevant documents at least until the OFCCP makes a final disposition. 41 CFR 60-1.12(a).
Keep in mind that many contractors and subcontractors are also subject to other federal laws that may impose additional recordkeeping obligations. As such, employment and personnel records may need to be retained for longer periods of time. For example, the Fair Labor Standards Act requires that most employers preserve payroll, collective bargaining agreements, and sales and purchase records for at least three years. See 29 CFR Part 516.
What Are Some Best Practices For Record Management?
The OFCCP and the U.S. Department of Labor recommend the following record management practices to ensure compliance:
• Label electronically maintained records.
• Provide secure storage of electronic data.
• Create back-up electronic file copies.
• Observe quality assurance for electronic recordkeeping through regular system evaluations.
• Use tear-off sheets, post cards, or short forms to maintain confidential, demographic information separate from the applications.
• Document and retain information to track candidate referral and recruitment sources, particularly those that effectively target minority and female candidates. Although not expressly required, this strategy will help contractors and subcontractors to evaluate the effectiveness of their outreach efforts, and make necessary adjustments to their Affirmative Action Plans.
Notice Posting Requirements
The OFCCP has established notice posting requirements for contractors and subcontractors who hold federal contracts or subcontracts that exceed $10,000 in aggregate value in a year. Federal contractors and subcontractors who hold government bills of lading, serve as a depository of any federal funds, or act as an issuing and paying agent for U.S. savings bonds and notes are also subject to these posting requirements. Please note that the federal posting requirements are in addition to any state requirements that are generally applicable to employers.
What Must Be Posted?
The OFCCP requires that contractors and subcontractors post the following posters prepared by the OFCCP and the Equal Employment Opportunity Commission (EEOC): (i) an “Equal Opportunity is the Law” poster and (ii) an “EEO is the Law” poster supplement; and (iii) a “Pay Transparency Nondiscrimination Provision” poster. The “Equal Opportunity is the Law” poster generally describes the federal laws that protect applicants and employees from job discrimination on the basis of race, color, religion, sex, national origin, disability, and retaliation, as well as special protections afforded to disabled veterans. The poster supplement notes that federal discrimination protection also extends to discrimination on the basis of sexual orientation and gender identity, pursuant to the recent amendments to Executive Order 11246. And, lastly, the pay transparency poster specifically informs applicants and employees that a contractor or subcontractor may not discriminate against them for inquiring about, discussing, or disclosing their own pay, or the pay of others. Each of these posters explain to employees and applicants how to contact the OFCCP or EEOC to file a discrimination complaint. Contractors and subcontractors can obtain approved copies of these poster from the U.S. Department of Labor’s website at www.dol.gov.
Where Should the Notice Be Posted?
The notice should be prominently posted in a place where it can be easily seen by employees and applicants. Suggested places include the on-site Human Resources Department, work-out facilities, lunch/break rooms, and/or company bulletin boards. The U.S. Department of Labor is currently studying electronic ways to satisfy the notice posting obligations—but, for now, physical paper posting is required.
Contractors and subcontractors have an additional duty to utilize reasonable measures to accommodate applicants and employees with disabilities to inform them of the content of the notice. This may be accomplished, for example, by reading the notice to a visually impaired person, or lowering the notice so that it might be read by a person in a wheelchair.
This article was prepared expressly for OutSolve, LLC by Britney J.P. Prince, Associate at Andrews Kurth. Copyright © 2016. Andrews Kurth. This communication has been prepared by Andrews Kurth for informational purposes and does not constitute legal advice. A past performance or prior result is no guarantee of a similar future result in another case or matter. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Attorney Advertising.
OFCCP Compliance Checklist
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