What Should Your Company Submit to OFCCP at the Start of a Compliance Review?

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Your company has received that dreaded letter from the U.S. Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) indicating that your company has been scheduled for an affirmative action compliance review. After the initial panic has subsided, it is time to consider what you will send to OFCCP in order to comply with the requests in the scheduling letter and itemized listing you've received.

While more affirmative action compliance reviews by OFCCP are now ending in conciliation agreements than was the case in the past, there are still plenty of companies that are receiving letters of compliance at the end of their reviews. The decision on what items to send to OFCCP and what items to hold back can be crucial in determining the outcome of an affirmative action compliance review. The 30 days between the time the scheduling letter is received and the time that your company's affirmative action plan is due to OFCCP should be used to make various strategic and tactical choices on what to provide to OFCCP.

Characteristics of the Information Your Company Should Submit to OFCCP



At the start of a compliance review at any particular establishment, OFCCP requests a copy of the company's affirmative action plan (AAP) that covers minorities and females as well as a copy of the company's affirmative action plan(s) that cover veterans and persons with disabilities. There are a number of items that should be part of the package that is initially submitted to OFCCP in response to these requests. These items have one or more of the following characteristics:
  1. The federal affirmative action regulations require the submission of these items.
  2. The items place your company in the best strategic position to have a successful OFCCP review.
  3. The items are required by the scheduling letter and/or itemized listing and are non-controversial items that will help create a positive rapport with OFCCP.

Submitting Information in the Itemized Listing



The letter that opens an OFCCP compliance review (called a "scheduling letter") includes an itemized listing that asks for specific information from the company. The reports and other documents in the itemized listing are among the items that are part of any appropriate submission to OFCCP at the start of an affirmative action compliance review. While OFCCP has asked to make significant changes to the scheduling letter and itemized listing, as of October 2012, these changes have not been approved by the Office of Management and Budget. Thus, the agency has continued to use the scheduling letter and itemized listing that have been in place for some time. The information requested in the current itemized listing includes the following:
  • Complete, correct copies of the organizational profile, job group analysis, comparison of incumbency to availability, and placement goals for the establishment that has received the scheduling letter. (These items are requested as items 1 through 6 in the itemized listing.) The federal regulations clearly delineate the contents of these reports and clearly mandate that these items must be part of an annual affirmative action plan update.

  • Three years of EEO-1 reports for the establishment that has received the scheduling letter. Note that scheduling letter item 7 requests more than the most recent EEO-1 report.

  • A copy of any collective bargaining agreements that cover employees at the establishment that has received the scheduling letter. (See itemized listing item 8.)

  • A report on whether placement goals from the previous affirmative action plan year were met. (See itemized listing item 9.) Unlike the organizational profile or availability analysis, the federal regulations do NOT define what should be included in this report on whether placement goals were met. While the scheduling letter states that certain information should be included in this report, it is not clear that companies are strictly required to follow this format. However, it is helpful to the completion of the compliance review if companies follow this format. We suggest that companies include all of the elements listed in the scheduling letter.

  • Information on "specific good faith efforts" made to meet last year's placement goals. (See itemized listing item 9.) There is value in providing OFCCP with information on specific, tangible efforts made to meet last year's placement goals and to otherwise reach out to minorities and females. This is an opportunity for a company to discuss the positive and proactive efforts it has made to comply with the affirmative action regulations. Conversely, this is NOT a time to make excuses for the failure to recruit or select minorities or females.

  • Summary data on applicants, hires, promotions, and terminations during the last AAP year. (See itemized listing item 10.) This data may be presented by job group or job title. Again, there are no specific regulations that define the format in which this information must be presented. This provides significant leeway for companies to determine the best way in which to provide this data to OFCCP. OFCCP will use this data to determine whether there are disparities involving the hire, promotion, or termination of employees based on race or gender. Companies should review applicant, hire, promotion, and termination data to determine whether it is more strategically advantageous to present information by job group or job title. Companies should also determine whether it makes sense to provide data on each individual race category or show data only on whites and non-whites. (In either case, there should be a category for unknown race in regard to applicants.) While OFCCP typically analyzes data by job group, and typically requests data by individual race categories, the scheduling letter does not require an initial submission of data in this manner. If there are no meaningful disparities in regard to individual race groups when data is presented by job group, companies may facilitate the process of closing a review by presenting data in this manner.

  • If the company is more than six months into its current AAP year, an additional report on whether the current AAP year's placement goals have been met as well as summary data on applicants, hires, promotions, and terminations during the current AAP year. (See itemized listing items 9 and 10.) Again, OFCCP has no specific regulations on how these reports are to be produced. In regard to time frames, some companies provide reports that cover only the first six months of the AAP year, while others provide reports that cover the period of time from the beginning of the AAP year until a date closer to the submission date of materials to OFCCP.

  • A summary report on annualized compensation data showing total number of employees and total compensation by race and gender. (This is requested in item 11 in the itemized listing.) This report should include the employees covered in the organizational profile in the AAP being provided to OFCCP.

Additional Information to Submit



There are a number of additional items that companies should consider submitting at the start of a compliance review. These items include the following:
  • A table of contents for each AAP. While this may seem obvious, it is very helpful for each AAP (i.e. the AAP for minorities and females and the AAP(s) for veterans and persons with disabilities) to have a page that clearly defines where particular items can be found in that AAP.

  • An Equal Employment Opportunity/Affirmative Action (EEO/AA) policy. While there is no formal request for such a policy in the itemized listing, OFCCP expects that companies will have such a policy that is signed by the head of the company or another senior officer and that lists an EEO Officer for the company. Please note that companies occasionally confuse the EEO/AA policy and the complete AAP. An EEO/AA policy is a basic policy outlining the company's commitment to follow the laws that prohibit discrimination and encourage affirmative action. The AAP is a multi-faceted document containing many statistical and narrative reports on the company's actions and activities.

  • A policy or other statement that informs employees and applicants that the affirmative action plan(s) for veterans and persons with disabilities is available for inspection during working hours. This statement can be incorporated into the EEO/AA policy or it can be a separate statement. The statement should be referenced and/or included in the AAP for veterans and persons with disabilities. Note that the statement should NOT indicate that the AAP for minorities and females is available for inspection. There is no regulatory requirement to make the AAP for minorities and females available for employees and applicants, and that AAP contains enough sensitive information that it should not be routinely provided to persons who don't have a defined reason to view the AAP.

  • A statement that the AAPs are protected documents that should not be released to the public. As noted above, there is sensitive information in the AAP for minorities and females and there may be sensitive information in the AAP(s) for veterans and persons with disabilities. A strong statement affirming the company's interest in protecting the contents of the AAPs is critical.

  • A purchase order or related document that demonstrates vendors are made aware of their obligations under the federal affirmative action regulations and under Executive Order 13496 (the executive order regarding federal contractors' obligation to notify employees of their collective bargaining rights). While there is no longer a requirement to send out the massive vendor certification letters that companies formerly sent, OFCCP routinely asks for something that demonstrates companies are making at least a minimal effort to inform vendors of their obligations.

  • A copy of the company's latest VETS-100A report for the establishment that received the scheduling letter. The VETS-100A report is requested in the scheduling letter itself rather than in the itemized listing. As I have noted in previous editions of The OFCCP Digest, companies should be preparing the VETS-100A rather than the VETS-100 report, and should be submitting the VETS-100A report to OFCCP.

  • Documents about the company's compensation system, if these documents will explain disparities found in compensation data and if these documents will otherwise support the company's compensation-related decisions. Item 11 in the itemized listing suggests that companies may "include any other information you have already prepared that would assist us in understanding your compensation system(s)." Some companies have documentation that provides insight into how compensation decisions are made. Some companies also have information that speaks to how potential compensation disparities arise and how they are analyzed to determine what factors may be affecting compensation. These types of documents may be worth submitting if they will place the company in a stronger strategic position and if the company has followed the procedures and processes in these documents.

Information That Should NOT Be Submitted at the Start of a Compliance Review



While there are a significant number of items that should be submitted to OFCCP at the start of a compliance review, it is also important to limit the amount of information that is provided to OFCCP.
  • The company should not use the narrative in the affirmative action plans to make any type of admission of possible discrimination or other adverse action against employees or applicants. The AAP narrative can be used to explain unusual situations and to justify a company's actions. However, the company should totally avoid any statement that might form the basis for a discrimination action by OFCCP or any other regulatory agency.

  • The company should not include any statistical report that uses a test of statistical significance indicating that there has been adverse impact against any particular group. There are many vendors that provide "canned" impact ratio analyses that include columns showing where there is statistically significant adverse impact under a standard deviation test, a Fisher's Exact test, or other tests of statistical significance. Companies are NOT required to provide this information to OFCCP, and no company should provide OFCCP with a report that states there is statistical evidence of discrimination under one or more meaningful tests.

  • The company should not provide OFCCP with individualized compensation data when information is originally submitted to OFCCP. Under OFCCP's current itemized listing, there is no requirement to provide detailed compensation information by employee, nor is there a requirement to break down compensation by individual race categories. While most OFCCP reviews include a later request for this individualized compensation data, the itemized listing requires only the submission of generalized compensation data. OFCCP is very interested in how federal contractors and subcontractors pay their employees, but it is not true that every affirmative action compliance review includes an extensive review of compensation. We have seen a small number of cases where OFCCP made no request for compensation data beyond what was delivered for item 11. Thus, companies should wait to see what OFCCP demands, if anything, in regard to compensation before submitting extensive additional information.

  • The company should not provide detailed reports on personnel activity. Several years ago, there were times when it was useful to provide extensive detail on applicants, hires, promotions, and terminations at the start of an affirmative action compliance review. This demonstrated that the company both understood the federal affirmative action regulations and was ready for any questions OFCCP might have about personnel activity. Now, in light of the unpredictable nature of OFCCP reviews and OFCCP's increasing interest in investigating seemingly minor issues, companies are better served by submitting summary data on personnel activity and holding more detailed information in reserve.

  • The company should not provide OFCCP with information on other establishments connected to the establishment that received the scheduling letter. For companies with multiple facilities and/or multiple locations, all data provided to OFCCP should focus strictly on the facility that has received the scheduling letter. Data concerning personnel activity at other locations should be omitted from the statistical reports provided to OFCCP. For example, if the facility receiving the scheduling letter shares applicant pools with other facilities, an effort should be made to determine which applicants applied for positions at the facility where the review will be taking place. Narrative sections of the AAP should, as much as possible, avoid making reference to other facilities and locations in order to limit the scope of the compliance review. Basic documents such as EEO-1 and VETS-100A reports should refer to the establishment undergoing the review and not the company as whole.
The process of submitting information to OFCCP at the start of a compliance review may seem relatively simple. The company is required to submit the AAPs and various supporting documents for the establishment that has received the scheduling letter. However, it is clear from the above that the exact nature of the information provided can go a long way in determining the course of a compliance review.

Did you know…that OFCCP compliance officers rarely read the narrative sections of an AAP. Compliance officers focus almost exclusively on the statistical reports in the AAPs. Thus, a contractor's or subcontractor's primary focus should be on these statistical reports and what they may tell a compliance officer about the company's compliance with the affirmative action regulations.

For more information on what to submit (and what not to submit) at the start of an OFCCP compliance review, contact Bill Osterndorf at wosterndorf@hranalytical.com.

Please note: Nothing in this article is intended as legal advice or as a substitute for any professional advice about your organization's particular circumstances. All original materials copyright © HR Analytical Services Inc. 2012