Is the OFCCP Just Making Things Up As It Goes Along?

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The Office of Federal Contract Compliance Programs issued its revised regulations implementing Section 503 of the Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act on September 24, 2013. Since then, contractors have had more questions than answers. What is troubling is the OFCCP’s apparent failure to think through many of the obvious issues now facing contractors, and instead of incorporating answers to these questions in the regulations before issuance, the OFCCP is now “regulating by fiat” or through its informal guidance.



It is important to remember the distinction between regulations and an agency’s informal interpretative guidance. Regulations have the force and effect of law – unless a court rules them to be invalid for some reason. Informal guidance issued by an agency, however, may be provided some deference by the courts, but generally guidance is just an agency’s current interpretation and is not binding on the agency or the public.



Let’s look at just a few examples where the OFCCP is using informal interpretative guidance as opposed to addressing matters directly in its regulations, or has failed to provide timely information to contractors:



Timing of Compliance.





The regulations provide that they become effective on March 24, 2014. In the preamble to the regulations, however, the agency explains that there is actually phased-in compliance:

  • Although this final rule becomes effective 180 days after publication, full compliance with the requirements of this final rule by current contractors will be phased in as follows: Current contractors subject to subpart C of the existing 41 CFR part 60-741 [and 41 CFR part 60-300] regulations that have written affirmative action programs (AAP) prepared pursuant to those regulations in place on the effective date of this final rule may maintain their AAP for the duration of their AAP year. Such contractors are required to update their affirmative action programs to come into compliance with the requirements of subpart C of this final rule at the start of their next standard 12-month AAP review and updating cycle. . . .


78 Fed. Reg. 58618, 58685 (emphasis added). All this means is that contractors do not have to update their AAPs to comply with the new regulations before their normal AAP development cycle. Period.



At some point, an agency representative made a general comment about contractors with existing AAPs in place on March 24, 2014 not needing to comply with subparts C until they update their AAPs. Well, this is an entirely different statement than what is in the preamble. In addition to the required components of AAPs, subparts C include the new pre-offer self-identification obligations. Did the agency truly mean that contractors with existing AAPs on March 24, 2014 would not be required to start soliciting self-identification information from its applicants until they updated their AAPs? Wouldn’t that set substantially different burdens for contractors based solely on the arbitrary nature of their AAP date? Wouldn’t that delay the data collection requirements that the OFCCP deems so important by up to a year for many contractors?



Finally, in mid-December 2013, after much gnashing of teeth by contractors over this uncertainty, the OFCCP issued an answer to a “Frequently Asked Question,” i.e., informal guidance, on its website resolving this dilemma: “As a contractor, you may delay compliance with the AAP requirements of Subpart C until your first AAP is due following the March 24, 2014 effective date. This includes the newly required pre-offer self-identification elements . . . .” (Emphasis added). Although this FAQ conflicts with the language from the regulatory preamble, I am sure many contractors are quite pleased with this guidance from the agency. Too bad for the rest of ‘em!



Mandatory Self-Identification Form.





The issue here is not about the agency’s informal guidance, but rather the failure to appropriately plan ahead. The OFCCP decided that the invitation to self-identify disability status must be done by contractors “using the language and manner prescribed by the Director and published on the OFCCP Web site.” It is not difficult to understand the agency mandating a specific form with specific language for a variety reasons – mostly to encourage individuals to self-identify when they become used to seeing the same government form used by many employers. But the agency could not even get its act together enough to publish the required form at the same time as the regulations?!? It had no problem providing recommended language for the veterans’ self-id obligations in the regulations.



Instead of issuing this mandatory form concurrently with the regulations, the OFCCP stated that it would place the approved form on its website. For four months after the regulations were issued, contractors wondered what this form would look like and how they were to incorporate it into their processes. The OFCCP does not seem to understand that contractors need sufficient time to implement such changes (at least those contractors not fortunate to have an AAP in place before March 24, 2014).



On January 27, 2014, the OFCCP finally announced that it had obtained approval from the Office of Management & Budget and released the form. And did you happen to see the form the OFCCP initially proposed? Its language was not consistent with the statute or the regulations. It required individuals to choose between either (1) Yes, I have a disability (or have previously had a disability); or (2) No, I don’t wish to identify as having a disability. What about folks who just aren’t disabled? Most importantly, there was no indication whether contractors could incorporate the required form with electronic applicant systems.



The OFCCP has issued an FAQ, though, explaining that contractors can use the mandatory form in their electronic systems as long as it meets certain requirements: includes the OMB number and expiration date; contains the text of the form without alteration; uses at least 11-point and san-serif font. Let’s hope contractors obtained the form with sufficient time to incorporate it into their electronic systems and be compliant.




Components of Data Collection Analysis.





The new data collection analysis is another example of the OFCCP putting one thing in the regulations and something different in agency guidance. The new regulations require contractors to:

  • document the following computations or comparisons pertaining to applicants and hires on an annual basis and maintain them for a period of three (3) years:



  • (1) The number of applicants who self-identified as individuals with disabilities . . . or who are otherwise known to be individuals with disabilities;

  • (2) The total number of job openings and total number of jobs filled;

  • (3) The total number of applicants for all jobs;

  • (4) The number of applicants with disabilities hired; and

  • (5) The total number of applicants hired.



41 C.F.R. § 60-741.44(k) (emphasis added). See corresponding regulations for veterans at 41 C.F.R. § 60-341.44(k).



Well this seems pretty straightforward. We have to maintain these figures for our applicants and hires, right? Right!?! That’s what the regulation specifically says – “pertaining to applicants and hires.” Well, the OFCCP’s FAQ takes the plain meaning of the regulations and imposes a drastically different interpretation. Here is how the OFCCP intends to enforce this provision:

  • In the context of the data collection requirements of 60-741.44(k), jobs “filled” refers to all jobs the company filled by any means, be it through a competitive process or non-competitively, e.g., through reassignment or merit promotion. It, therefore, should take into account both new hires into the company and those employees who were placed into new positions via promotions, transfers, and reassignments. [Okay – I can see that; I get it]. In contrast, the number of those “hired” refers solely to those applicants (both internal and external to the contractor) who are hired through a competitive process, including promotions.



Wait a minute here! So, “hires” does not actually mean “hires” as all contractors understand the term and as the agency has always applied the term? Apparently not. The OFCCP, in its informal guidance (and its infinite wisdom) is taking the position that “hires” actually means “hires and promotions.” If this was what the agency intended, why didn’t it put those terms in the regulations, or refer to “selections” or “competitive selections”? The agency has drafted regulations that are clear and concise, then – using its guidance – modified their everyday, ordinary meaning to mean something entirely different. This interpretation also leads to the conclusion that “applicants” really means “candidates, both internal and external.” This unprecedented obfuscation of these terms now has the potential of creating confusion wherever they are used in the regulations. For example, when calculating the number of protected veterans “hired” for purposes of the annual benchmark, are contractors supposed to count competitive promotions?



The OFCCP should say what it means and mean what it says. If this is truly the result the agency intended, wouldn’t it have been so much easier to use the precise language in the regulations? Do we really want lawyers fighting about what “applicants” and “hires” actually mean for the next 20 years? (Well, maybe I do, but I doubt contractors or the agency does!)



Job Posting Requirements.





The OFCCP has also expanded the requirement that contractors alert job seekers that they will not be discriminated against on the basis of race and gender to include disability and veteran status. That does not seem very complicated; in fact, many contractors have already been including “D” and “V” in their “EOE/AA” solicitation tagline. However, the OFCCP states in its FAQs that “D” and “V” “are not adequate abbreviations” because they are not commonly understood by applicants. The agency states that abbreviations are only permissible if they are commonly understood and that “the tagline should at a minimum state ‘disability’ and ‘vet.’”



Given that the OFCCP has never (at least to my knowledge) stated that using “M” and “F” were insufficient to denote non-discrimination against minorities and females, this pronouncement by the agency regarding “D” and “V” is surprising. Does this mean that the OFCCP also considers “M” and “F” to be inadequate? The agency’s FAQ seems to raise more questions than it answers. Moreover, considering the significant additional costs faced by contractors having to place much longer job advertisements, this tagline comes with a big price tag!



Despite having two years (actually more than that if you consider the time to prepare the proposed rules) to craft these new regulations, the OFCCP failed to address these obvious types of issues. The agency now appears to be scrambling to put out FAQs and webinars to answer the recurring questions faced by the contractor community. Certainly, we cannot expect any government agency to be prescient and consider every single possible consequence of every single possible scenario. But that is not what we are talking about here. We are looking at an agency’s failure to incorporate basic information in its regulations in response to items that could reasonably have been anticipated.



I think we deserve more from our government. Don’t you?