OFCCP Issues "Back to School Update"

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OFCCP offers contractors answers to puzzling questions.

Wondering about whether to count student workers? Or whether multiple locations can be combined into one Affirmative Action Plan? These are questions that have vexed many contractors, particularly institutions of higher education.

On September 5, the Office of Federal Contract Compliance Programs issued a Directive and a set of FAQs to address these issues.
 
Directive 2019-05 – Contractors' Obligations Regarding Students in Working Relationships with Educational Institutions

Colleges and universities have long struggled with deciding whether student workers should be included in their AAPs. The types of student workers and their relationships with an institution are varied and vast. For example, some student workers may be regular part-time employees, while others are earning credits or working toward a degree requirement. Generally, though, their main relationship with the organization is educational.

The OFCCP's new Directive states that the OFCCP will not evaluate student employees as part of an AAP during a compliance evaluation:
OFCCP will exercise its enforcement discretion by limiting its compliance evaluations of educational institutions to non-student employees. . . .
The OFCCP recognizes that determining whether student workers meet the definition of an "employee," such that they should be included in an AAP, is an extremely fact-intensive endeavor. In light of this, the OFCCP announced:
OFCCP appreciates the difficulty for educational institutions in determining whether student workers meet the multifactor tests for employee status, and accordingly whether such employees should be included in their AAP job groups. OFCCP faces similar difficulties making these determinations when these entities are scheduled for compliance evaluations. Sorting through data to determine jurisdiction on student workers is not only burdensome for contractors but may prolong the time it takes OFCCP to complete compliance evaluations, and may take focus away from examining the personnel practices and outcomes of non-student employees of these contractors. Additionally, data on student workers is typically not robust enough for analyses due to quick turnover and limited application pools. OFCCP has an interest in focusing its time, attention, and resources on individuals whose primary relationship with the educational institution is work-related.
Significantly, the OFCCP does not state that student workers should not be included in AAPs. Rather, the agency provides that it is exercising its enforcement discretion in deciding not to cite contractors for excluding student workers from its AAPs and analyses.

The OFCCP also specifically notes that it will continue to accept and process complaints from student workers of covered contractors and proceed with investigations where appropriate.
 
FAQ: Developing and Maintaining Establishment-Based AAPs for Campus-Like Settings

According to OFCCP regulations, unless a contractor obtains approval to develop functional AAPs, it must develop an AAP for each "establishment." The OFCCP has defined an establishment as:
A facility or unit that produces goods or services, such as a factory, office store, or mine. In most instances, the unit is a physically separate facility at a single location. In appropriate circumstances, OFCCP may consider as an establishment several facilities located at two or more sites when the facilities are in the same labor market or recruiting area. The determination as to whether it is appropriate to group facilities as a single establishment will be made by OFCCP on a case-by-case basis.
When a contractor has multiple buildings in the same general location, there is often a question whether those buildings can be considered a single establishment for AAP development purposes. The OFCCP notes that this situation often applies to educational institutions, hospitals, and technology companies.

Providing more certainty to contractors in this situation, the OFCCP's FAQ states that "contractors may group employees located across several buildings on a campus under one establishment-based AAP." The OFCCP notes, however, that several factors should be considered to determine whether this approach is appropriate. Specifically, contractors should consider:
  • What is the function of the building, and how do the employees in the building interact with employees in other buildings?
  • Are employees across different buildings part of the same organizational unit, such as department, division, section, branch, group, job family, or project team?
  • Are the hiring, compensation, and other personnel decisions handled separately at each building or are those functions consolidated across the entire contractor or across multiple buildings on one campus?
  • Does each building handle its own recruitment or is that function consolidated across multiple buildings?
  • Do the buildings recruit from the same labor market or recruiting area?
  • To what extent are other human resources and Equal Employment Opportunity compliance functions operationally distinct for each building or group of buildings?
  • To what extent do certain employees perform work functions across various buildings?

  • (FAQ #4).
Of course, this is a balancing test, and the OFCCP notes that the more the factors weigh in considering the settings as independent, the less appropriate it becomes to combine them in a single AAP.

This Directive and FAQ continue Director Craig Leen's stated mission to increase OFCCP transparency and provide more certainty for federal contractors. Both of these announcements ease compliance burdens for federal contractors and are welcome news.