On September 30, 2014 the Office of Management and Budget (OMB) approved OFCCP’s revised scheduling letter and itemized listing which were used to initiate compliance reviews after October 15, 2014. One of our clients unhappily received one of these letters and is currently in the midst of an audit. Shortly after submitting their desk audit package electronically, my client, XYZ Company, received an extremely onerous request for additional data from the Compliance Officer (CO) in the Mid-Atlantic region.
Before I speak to the OFCCP post desk audit request, I think that it would be helpful to understand the new items required by the itemized listing. Here is a condensed summary of the new items required by OFCCP.
Section 503 and 4212
- Contractor’s evaluation of the effectiveness of its outreach and recruitment efforts.
- Actions taken to comply with audit and reporting systems.
- Data collection metrics for preceding year and current year, if six months or more into the current AAP.
- Utilization analysis for employees with a disability to show goal achievement, and current year goal progress if more than six months into your plan year.
- Identification of the hiring benchmark for protected veterans, benchmark achievement and current year progress if more than six months into your plan year.
- Reasonable accommodation policies and documentation of accommodation requests and resolution.
- Recent assessment of personnel processes and mental and physical qualifications, including the date of assessment, actions taken, and date of the next scheduled assessment.
- Submit by job group or job title, by racial subgroups and gender.
- Include the “unknown” race and gender information for applicants.
- Provide the definition of promotion and how promotions are compiled (into a job group, from and/within the job group); must clarify if different for each job group.
- If promotions and/or terminations are submitted by job title, you must include the department and job group from which and to which the promotion occurred and/or the department and job group where the person terminated.
- Provide compensation for all employees (FT, PT, contract, per diem or day labor, temporary) as of the date of the Workforce Analysis.
- Data must include gender, race, hire date, job title, EEO-1 category and job group.
- Compensation includes base salary and/or wage rate, hours worked in a typical workweek.
- Other compensation includes bonuses, incentives, commissions, merit increases, locality pay or overtime and should be identified separately.
- Documentation and policies related to compensation practices. This is requested by OFCCP but not required.
- Additional data may be provided, e.g. education, past experience, duty location, performance rating, department or function, salary level/band/range/grade.
It is also important to note that if your AAP plan dates are prior to March 24, 2014 at receipt of your scheduling letter, then many of the new items above in the Section 503 and 4212 request do not apply to your company until your 2015 update. These include numbers 1, 3 - 5 and part of 7 above. For #7, prior to the new letter, you were not required to identify the date of the assessment, actions taken, or the date of the next planned assessment.
Additionally, OFCCP wants to receive all of this information electronically, including the compensation data in MS Excel format. To assist contractors with these new items, OFCCP has posted several FAQs to answer questions relating to partial year data and analysis and compensation data.
Once you have provided all of this information and data to the OFCCP, you take a deep breath and wait. In most cases, you do not have to wait too long, as these days most follow-up requests are sent within a few weeks of receiving your desk audit submission.
Company XYZ submitted their desk audit package on December 1st and received their follow-up request on December 10th. However, on December 3rd the CO contacted them requesting the password for the compensation data, even though they had provided that information in the package. This request so soon after the submission makes it clear that the CO’s priority was compensation; however, the follow-up request did not address compensation.
OFCCP follow-up request due by Close of Business (COB) December 16th:
- Does XYZ treat leave for pregnancy and pregnancy-related conditions the same as leave for disabilities related to medical condition? Describe the policy related to leave for pregnancy, childbirth, and related medical conditions and how it is implemented. If you have a policy in the employee handbook you may attach a copy of that policy.
- Does XYZ have a policy for ensuring accommodation for religious observance and practice? If so, how is it implemented? If you have a policy in the employee handbook you may attach a copy of that policy.
- XYZ established goals for the AAP year. What efforts has the company made during the review period to recruit minorities, women, individuals with a disability, and veterans? What recruitment sources do you use? Specifically, we are requesting documented evidence of those efforts for each of these groups. Please provide us with some support data of recruitment efforts with specific organizations or agencies used as outreach and recruitment sources. Examples should be submitted.
- The AAP indicates that XYZ lists openings with the state employment service. Please submit some examples of job postings submitted to the state employment service during the review period.
- Please submit a copy of the contractor's VETS- 100 Report/VETS- 100A Report, if applicable.
- There are some indicators in the personnel activity for period from 1/1/13 to 12/31/13. Please provide personnel activity data by title and breakdown by race for applicants, hires, promotions and terminations during this period.
The following details the dialogue between XYZ and the OFCCP following this request.
XYZ’s first follow-up on December 10th: “Can you elaborate further on what you mean by ‘there are some indicators in the personnel activity for 2013, referencing race’? Our internal impact ratio analysis indicates that there are no indicators of statistical significance for race in hiring activity or termination activity.”
OFCCP’s response on December 15th: The CO responded by saying that “in response to your question about Item #6, our office uses different statistical analysis tools. In an effort to pinpoint if and where the issue exists specifically we need the information at a minimum by race. There are indicators as a whole for males, females and minorities in several of the job groups. This information is necessary to narrow the results. Our analysis looks at the entire work force and when there are issues we try to break down the information into smaller groups. I can start with race, but as for the male and female issues there are no smaller groups so job titles would be necessary. I have to collect all the information in this way in order for the Statistical Analysis Unit to analyze the information.”
XYZ’s second follow-up on December 16th: “… you reference "different statistical tools used by your office, and yet regardless of the tool used, the calculation should yield the same results as our internal IRAs…. It may be helpful to schedule a conference call between our team, our AAP consultant, your office and your statistical analysis unit to jointly review the personnel activity summary data and ensure we are basing analysis work on the same numbers. Further, if you can identify the specific personnel activity and the specific job groups in which you find indicators, then we would be happy to comply with your request for those specific job groups and activity.”
We have also discovered that another contractor with an audit with the same CO received the same request #6 and also asked for clarification. As of the writing of this article, neither contractor has received a response from the OFCCP.
In the last response from the CO, there are several things to note in reference to:
- Different statistical tools used – how many tools need to be used to determine adverse impact?
- Our analysis looks at the entire workforce – the itemized listing asks for the data by job group and/or job title. Since when is OFCCP then consolidating the data for the entire workforce?
- Statistical Analysis Unit – does this mean that OFCCP is sending all indicators of adverse impact (with a standard deviation rate greater than two) to this unit?
We have decided to wait for the CO’s response before moving up the chain of command. We anticipate that the Mid-Atlantic region is now evaluating the reasonableness of this request; however, it is taking a long time to get back to us.
Since most contractors have just begun having audit activity using the new scheduling letter, we all will have to wait and see how far OFCCP with go to solicit more data to broaden their areas of investigation. Hopefully, requests like this one are random requests initiated by one CO.
Good luck with your future compliance evaluations!