FAAP Webinar by the OFCCP

The Office of Federal Contract Compliance Program (OFCCP) has issued a new directive outlining the application and approval procedures for Functional Affirmative Action Program (FAAP) Agreements. Federal contractors and their subcontractors are required to comply with the guidance in the new FAAP Directive which became effective June 14, 2011.

This webinar is designed to provide an overview of the key changes to the FAAP Directive and the procedures for requesting, renewing, modifying and terminating FAAP agreements. The OFCCP Acting FAAP Director, Ms. Nakisha Pugh will conduct the webinar, which will last approximately 1.5 hours long that includes 30 minutes of Q&A opportunities.

Date: Tuesday, August 9, 2011
Time: 2:00 PM - 3:30 PM EDT
After registering you will receive a confirmation email containing information about joining the Webinar.

Space is limited.

Reserve your Webinar seat now at:
https://www1.gotomeeting.com/register/872699264

OFCCP Issues New Functional AAP Directive

This directive is effective immediately and outlines the application and approval procedures for FAAP's. Click on this link for the full directive text:
http://www.dol.gov/ofccp/regs/compliance/directives/dir296.pdf

OFCCP Publishes Proposed VEVRAA Regulation Revisions

By Robert Newland

Below the details of this announcement. Affirmative Action Services will prepare an in-depth analysis on this in the next few days.

OFCCP published in the April 26, 2011 Federal Register a Notice of Proposed Rulemaking (NPRM) that proposes to strengthen affirmative action requirements of federal contractors and subcontractors for veterans protected under the Vietnam Era Veterans' Readjustment Assistance Act of 1974. Veterans protected by VEVRAA include those with disabilities and those recently discharged as well as those who served during a war, campaign or expedition for which a campaign badge is authorized. The NPRM link to the Federal Register is http://www.gpo.gov/fdsys/pkg/FR-2011-04-26/html/2011-8693.htm. In addition, a list of frequently asked questions regarding this NPRM may be found here.
Increasing numbers of veterans are returning from duty in Iraq, Afghanistan and other places around the world only to face substantial obstacles in finding employment. Today, in the spirit of ensuring that all Americans have equal access to good jobs and that America's workplaces are equitable, the Office of Federal Contract Compliance Programs (OFCCP) published a Notice of Proposed Rulemaking (NPRM). The NPRM recommends revisions that strengthen Federal regulations implementing the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (Section 4212), as amended, commonly referred to as VEVRAA.
OFCCP proposes several changes to the requirement that employers doing business with the Federal government engage in specific types of outreach and recruitment that target veterans. One proposal requires Federal contractors to evaluate annually the effectiveness of their efforts to ensure that protected veterans have access to employment opportunities. The NPRM also proposes requiring Federal contractors to establish and maintain quantitative data on the number of protected veterans they learn about through job referrals, the number of protected veterans applying for jobs, and the number of protected veterans they hire. OFCCP's proposal also requires contractors to establish annual hiring benchmarks based on availability data and other relevant information. These benchmarks will enable contractors to measure their success in recruiting, employing and retaining protected veterans.
Another proposal addresses self-identification. In light of the difficulty identifying a veteran protected by Section 4212, the NPRM suggests requiring Federal contractors to invite veterans to self-identify both pre-and post-offer of employment.
You can submit comments on OFCCP's NPRM either electronically at http://www.regulations.gov or by mail. The identification number (RIN) for this NPRM is 1250-AA00. If you are mailing or hand delivering comments, send them to Debra Carr, Director, Division of Policy, Planning, and Program Development, Office of Federal Contract Compliance Programs, Room C-3325, 200 Constitution Avenue, N.W., Washington, D.C. 20210. Indicate RIN number 1250-AA00. Comments must be received on or before June 27, 2011.

Robert Newland: OFCCP v Florida Hospital – Lessons for all the Contractor Community

As some of you may know by now, a favorable ruling to the OFCCP by an Administrative Law Judge creates an interesting enforcement environment for medical institutions, but also the contractor community in general.

Medical institutions that are part of medical services contracts or subcontracts with the federal government are likely to be viewed by the OFCCP as within their jurisdiction. In other words – say you are a medical services provider in an insurance company network and said company has federal contracts to provide medical care, then you will likely be viewed as “covered”. The ALJ has made clear that you are unlikely to be covered by AA obligations, only in the event where an insurance carrier has federal contract for “insurance services” (not medical care). It seems that the devil is in details of the language in the actual contract.

And while at first glance it may seem likely that insurance carriers may try to steer away from the language that creates AA obligations, it is also possible that the federal government may push for that language now that the Florida Hospital v OFCCP gives them their second beachhead in a few years in the battle to extend OFCCP coverage to the healthcare industry. Given the current economic environment, the healthcare industry may have little choice but to accept this, if they want to get the much needed business.

It is not new that the OFCCP wants to create a more proactive and aggressive agency. As such, don’t be surprised to see the OFCCP going after other industries that claim to be outside their jurisdiction. For now, if you are involved in a healthcare organization, you probably want to take a closer look at your contracts with insurance providers and contact the insurance companies to review their contracts with federal agencies – are the contracts crafted in a language that creates an obligation to provide insurance or medical care?

If you are part of one of those contracts where the language indicates that the deliverable between the company and the federal agency is to provide medical care, you will be better off by preparing an Affirmative Action Program.

For questions about your status as a federal contractor or how to prepare an Affirmative Action Program, don’t hesitate to call at 800-707-9250 Ext. 246, email me at Rnewland@AffirmativeActionServices.com, or visit our website:
www.AffirmativeActionServices.com.

ANPRM of Section 503 Round 1 Completed. Here Comes Round 2 – by Robert Newland

With the closing of the deadline to submit comments in the Advance Notice of Proposed Rulemaking (ANPRM) to expand the efforts of affirmative action for people with disabilities, the OFCCP completes the first stage of an interesting process.

A total of 127 comments were submitted to the OFCCP where the more substantial issues appear to be the objective to set placement goals and quantitative analysis versus the quality of data available and the burden this process can create for federal contractors.

I recommend you visit www.regulations.gov where you can read the comments. Another “must read” is Economic System Inc.’s web site where you will find many of the likely proposed changes in language for the regulations.

While this is going on, the OFCCP Deputy Director Les Jin has been hinting the next steps for similar actions over implementing regulations of the Vietnam Era Veterans Readjustment Assistance Act (VEVRAA). Click here to read his complete statement http://www.dol.gov/_sec/media/congress/20100929_Jin.htm.

This is round 2 of a major overhaul in affirmative action. Stay tuned for more updates by subscribing to our Affirmative Action Alerts, visiting our website www.AffirmativeActionServices.com, or email me at Rnewland@AffirmativeActionServices.com.

Robert Newland - Limits Set on OFCCP’s Compliance Reviews

A recent ruling by an Administrative Law Judge effectively capped the period that can be covered during an OFCCP compliance review, more specifically limiting the period for which the agency can request information.

In the case of Frito-Lay v. OFCCP, the ALJ ruled that the period for which data can be requested is limited not only by 41 CFR Ch. 60-1.20(a)(1), but also the Federal Contract Compliance Manual (FCCM), a document outlining the rules of engagement for OFCCP compliance officers.

The OFCCP had asked Frito-Lay to submit contractor data for the two years after the initial compliance review period after identifying adverse impact. Frito-Lay refused to provide the data, stating the OFCCP Scheduling Letter only requests data for the previous AAP year and current AAP year, if more than six months into the current Plan.

According to Frito-Lay, the OFCCP regulations and the FCCM establish this as a temporal scope of the compliance review, and that in the case of potential discrimination; the OFCCP can go back two years from the date of the Scheduling Letter.

OFCCP argued that the regulations at 41 CFR Ch. 60-1.20(a)(1) grants them authority to request this information and that Frito-Lay cannot rely on the language of the FCCM to support their position.

In his ruling, ALJ Price stated the following key considerations to his decision in favor of Frito-Lay:
1. While there are ongoing contractor obligations in the preservation of data, there’s nothing on the regulations that require contractor to provide this information outside the time frame of the compliance review period.
2. The fact that the OFCCP repeatedly refers to the FCCM as the place to address issues like this accentuates Frito-Lay’s contention that it is valid guideline to determine how to proceed with the OFCCP’s request.
3. The FCCM instructs compliance officers to complete compliance reviews within 60 days from the receipt of an AAP, thus the regulations did not envision requesting data for two whole years after the date of the scheduling letter.

What happens next?
The OFCCP has appealed the ALJ decision is already discussing how to make changes to the FCCM. Until, and if that happens, you now have availed yourself of a ruling that clearly sets the boundaries for the OFCCP.

As a former OFCCP Compliance Officer I can tell you that many times we pushed the envelope when it came to extending the review period. The ruling by the ALJ outs a clear stop to that.

If you need help with an OFCCP audit or to learn about our services and free webinars, please visit www.AffirmativeActionServices.com.

Jim Higgins - Avoiding Litigation Risk In Selection: Tips for Employers

I have been considering the Wackenhut case that was discussed in the OFCCP News Release dated 06/09/2010 and wondering how many employers run the same risks--completely unnecessarily. Consider what happened to Wackenhut. They were required to pay a total of $290,000 in back pay to 446 African Americans who were not hired (at least partly) on the basis of their score ona personnel selection test.

In examining item and test performance data on the test used by Wackenhut, the OFCCP determined that there was statistically significant adverse impact against African Americans in violation of Title VII of the Civil Rights Act of 1964. Because of these group differences, the OFCCP demonstrated that Wackenhut was engaging in systemic discrimination. In addition to the consent decree requiring the payment of $690,000 in back pay to the applicants, Wackenhut was required to hire 41 of the original applicants into traditional security positions.

Dr. Patricia Shiu, Director of the OFCCP, noted that "This...should put all federal contractors on notice that the Labor Department is serious about eliminating systemic discrimination."

Wackenhut could have completely avoided this situation if they had followed the appropriate steps for validating their personnel selection tests. They should have spent the relatively short amount of time to conduct a job analysis that contained the kinds of quantitative data that would help them identify the critical job duties as well as the critical knowledge, skills, and abilities required to perform those duties. Then they could have documented the extent to which each question on their test was "linked to" or "measured" one or more critical knowledge, skills or abilities required on the job. Once they administered their test, they should have conducted a statistical analysis to determine whether the test scores exhibited adverse impact against employees based on those characteristics protected under Title VII of the Civil Rights Act. Finally, they should have documented a review of the available test options to demonstrate that there were no other testing formats that were equally valid and which were feasible given the employer's current situation.

These steps are easy and well worth the effort. Wackenhut could have saved up to 90% of what they paid in back pay and avoided the negative press that comes with being found to discriminate.

To learn more about how to validate pre-employment tests or for assistance conducting validation studies to minimize your own company's legal exposure, visit: http://www.affirmativeactionservices.com/.

Jim Higgins - Rescinding The 2006 Compensation Analysis Guidelines

While Dr. Patricia Shiu of the OFCCP announced that the current OFCCP Compensation Guidelines were to be "rescinded" at the 2010 National Industry Liaison Group (NILG) meeting in Las Vegas, employers should be aware that this announcement will have little effect on how they will defend themselves during compensation discrimination-related litigation or an OFCCP audit. This is because the question in such situations is "after taking into account the legitimate reasons why two groups (e.g., males and females) differ in terms of the pay they receive, are there unexplained differences that could be attributed to their gender (ethnicity, age, etc.)?" This question is most effectively answered through the careful application of the statistical tool known as Multiple Regression Analysis--the very tool that the OFCCP has settled upon in the 2006 Compensation Analysis Guidelines.

It is the power of Multiple Regression Analysis to "control for" legitimate job-related factors while determining the effect of a factor like gender that makes in the perfect tool for use in compensation analysis. It is also the reason that the courts have used Multiple Regression to both determine whether compensation discrimination exists and, if so, how much the disadvantaged group would need to be paid to eliminate the statistically significant disparity.
"SO," you might ask, "if all of this is true, why does it appear that the OFCCP may be reducing their reliance on Multiple Regression Analysis?" The answer is simple. The OFCCP spent a significant amount of time researching the tools and techniques necessary to conduct a valid compensation analysis. You only have to review the discussion published in the Guidelines to see this. The fact of the matter is they did a great job of identifying the relevant issues and choosing the right tool for the job.

What's the problem, then? Essentially, that it takes a significant amount of expertise to do Multiple Regression correctly. The OFCCP understood this problem well which is one of the reasons that they frequently used a "trigger" or "red flag" test as a pre-screen to identify those federal contractors whose data suggested they were systemically discriminating based on a protected characteristic. Even this pre-screening technique, however, failed to help them uncover significant amounts of actionable pay disparities.

Now, the OFCCP is looking for alternative analytical methodologies. However, they did such a great job (from a statistical standpoint) that they will be hard pressed to find anything better.

So, what is the bottom line? Federal contractors would be best served by continuing to conduct proactive compensation analysis using Multiple Regression Analysis as the cornerstone--where appropriate. In cases where unexplained pay differences are found, employers should conduct a thorough cohort analysis as a follow-up. Only after finding unexplainable differences in pay using Multiple Regression that were confirmed through a cohort analysis should the contractor make adjustments to employee pay. In this manner, federal contractors are likely to realize maximum protection from OFCCP audits or pay-related litigation.

To learn more about compensation analysis and multiple regression, visit me on the web at www.AffirmativeActionServices.com.

EO 13,496 Compliance

Many people have asked my for the link to get this poster so here you go:

http://www.dol.gov/olms/regs/compliance/EmployeeRightsPoster11x17_Final.pdf

Please keep in mind that you only need the poster where you have employees that work directly in the federal contracts and employees that do not work directly in the contracts but their work may be contract-related. In addition, you also have to do electronic notifications if you communicate electronically with employees.

Lastly, don't forget you also need to communicate these obligations to subcontractors.

OFCCP Director Patricia Shiu Highlights of Remarks at the NILG Conference, August 2010

With all of this in mind, what are the challenges that we face in making equal employment opportunity a reality? Here is what OFCCP is doing to address some of these issues.

OFCCP is working on pay equity issues. As a member of the White House Task Force on Pay Equity, the Department of Labor—and specifically OFCCP— is playing a leading role on this issue with our partners at the Equal Employment Opportunity Commission, the Department of Justice and the Office of Personnel Management. The goal is pay equity, and the federal government is holding itself accountable as well. OPM is examining how it will further reduce the wage disparity between male and female employees working for the federal government.

OFCCP will rescind the 2006 Guidance and will issue an Advanced Notice of Proposed Rulemaking to solicit your ideas and views about the new wage data collection instrument.

EEOC and OFCCP have embarked on a new path of partnership and leadership that will help to guide the civil rights agenda for this country. I am so pleased to have the opportunity to work closely with my dear colleague, Jackie Berrien, the Chair of the EEOC, who is also here today. She is deeply committed to the well-being of workers, and we share a philosophical belief in the importance of work to each individual. Our work together on implementing the White House Pay Equity Initiative affords our respective agencies the unique opportunity to work in concert on these and so many of the other pressing issues that workers face. I look forward to working closely with her and my other colleagues at the EEOC and the Department of Justice.

Just a few weeks ago, OFCCP issued an Advanced Notice of Proposed Rulemaking to solicit your ideas and views about the following topics:

- Employment practices that have been effective in recruiting, hiring, advancing and retaining qualified individuals with disabilities;

- The availability of data that could be used to establish hiring goals and conduct utilization analyses of individuals with disabilities; and

- How linkage agreements between Federal contractors and organizations that focus on the employment of qualified individuals with disabilities can be strengthened to increase effectiveness.

Yesterday, I spoke with many of you about OFCCP's full regulatory agenda, and many of you know about our efforts to strengthen affirmative action for protected veterans, and for women and minorities in the construction industry.

With respect to enforcement, OFCCP is working to transform its enforcement procedures to be more effective, more efficient, and more pro-active. OFCCP staff across the country is stepping up their investigations and audits, ensuring accuracy, thoroughness and quality outcomes. Excellence is the standard.

Speaking of enforcement, and in particular OFCCP's Functional Affirmative Action Program, I would like to make a request. All of you can help me, if you would. Mr. Jim Pierce, OFCCP Deputy Director of Operations, will be leading a discussion on OFCCP's FAAP program. I am examining whether this program should continue, and if so in what form. Please use this time with Jim to share your views on how the FAAP works in your company, why it promotes affirmative action, how it promotes affirmative action, how you measure results, how you know your results are accurate, what steps you take to adapt your AAP when necessary, and how you know when it is necessary to do so. Your willingness to share your views today, and most importantly the details of these questions, will go a long way in my exploration and consideration of this important program.

Functional AAP on Hold by OFCCP until Further Notice

OFCCP is not accepting any new requests to develop or to renew Functional Affirmative Action Program (FAAP) agreements at this time. The agency is currently reviewing its policies regarding the FAAP process. Until such guidance is issued, contractors without FAAP agreements should continue to develop and maintain establishment-based AAPs.

Contractors with approved FAAP agreements should maintain their functional unit AAPs and operate under their current FAAP agreement. If significant changes occur in the normal order of business for contractors with existing FAAP agreements, such as mergers, acquisitions, divestitures, and recent changes, these should be reported to the FAAP Director for appropriate actions, as per the agreement. OFCCP will notify contractors when new guidance is published.

In a recent Keynote Speech to the National Industry Liaison Group, OFCCP Director Patricia Shiu informed that Jim Pierce, OFCCP Deputy Director of Operations, will be leading a discussion on OFCCP's FAAP program. She will be examining whether this program should continue, and if so in what form.

OFCCP issues Advance Notice of Proposed Rulemaking (ANPRM) on Section 503

The Office of Federal Contract Compliance Programs (OFCCP) is issuing this Advance Notice of Proposed Rulemaking (ANPRM) in order to invite the public to provide input on how OFCCP can strengthen the affirmative action requirements of the regulations implementing section 503 of the Rehabilitation Act of 1973, as amended (Section 503). All comments must be received on or before September 21, 2010.
OFCCP is seeking public comment on the following inquiries:

1. How can the affirmative action requirements of Section 503 be strengthened to measurably increase employment opportunities of covered contractors for individuals with disabilities? If available, include examples or information illustrating the effectiveness of the suggested new requirements.

2. What measures have contractors and subcontractors taken to fulfill the current affirmative action requirements of Section 503? How much did these measures cost?

3. What barriers currently impede Federal contractors from hiring people with disabilities?

4. Are there changes that could be made to the existing language on permissible qualifications standards that would better ensure equal employment opportunities for individuals with disabilities?

5. If OFCCP were to require Federal contractors to conduct utilization analyses and to establish hiring goals for individuals with disabilities, comparable to the analyses and establishment of goals required under the regulations implementing Executive Order 11246, what data should be examined in order to identify the appropriate availability pool of such individuals for employment?

6. Would the establishment of placement goals for individuals with disabilities measurably increase their employment opportunities in the Federal contractor sector? Explain why or why not.

7. What experience have Federal contractors had with respect to disability employment goals programs voluntarily undertaken or required by state, local or foreign governments?

8. What specific employment practices have been verifiably effective in recruiting, hiring, advancing, and retaining individuals with disabilities?

9. To what extent does workplace flexibility, including flexibility in work schedules, as well as job-protected leave, impact recruitment and retention of individuals with disabilities?

10. Has training of employees and/or managers been effective in increasing advancement and/or retention of individuals with disabilities? If so, how?

11. Federal contractors are required to invite all job applicants to voluntarily and confidentially identify their race and gender pre-offer. The collection of this information allows contractors to monitor the impact of their employment practices by race and gender and to assess progress in meeting their affirmative action goals. Existing Section 503 regulations require contractors to invite applicants to voluntarily and confidentially self-identify as a person with a disability after making an offer of employment but before the applicant begins employment. (See 41 CFR 60-741.42(a).) Would amending the Section 503 regulations to require contractors to invite all applicants to voluntarily and confidentially self-identify if they have a disability prior to an offer of employment enhance a federal contractor's ability to more effectively monitor their hiring practices with respect to applicants with disabilities?

12. How can linkage agreements between Federal contractors and organizations that focus on the employment of individuals with disabilities be strengthened to increase effectiveness? Do linkage agreements have better outcomes when higher level company officials are responsible for their implementation/execution? Include examples of cooperative agreements between employers and disability or community recruitment organizations that have been helpful in hiring persons with disabilities.

13. What impact would result from requiring that Federal contractors and subcontractors make information and communication technology used by job applicants in the job application process, and by employees in connection with their employment fully accessible and usable by individuals with disabilities? What are the specific costs and/or benefits that might result from this requirement? For example, requiring that contractors ensure that application and testing kiosks are fully accessible and usable by individuals with disabilities, and that contractors strive to ensure that their Internet and Intranet Web sites satisfy the United States Access Board's accessibility standards for technology used by the Federal Government and subject to section 508 of the Rehabilitation Act.

14. What other specific changes to the Section 503 regulations might improve the recruitment, hiring, retention, and advancement of individuals with disabilities by Federal contractors?

15. Regulatory Flexibility Act--Consistent with the Regulatory Flexibility Act, the Department must consider the impacts of any proposed rule on small entities, including small businesses, small nonprofit organizations and small governmental jurisdictions with populations under 50,000. In response to this ANPRM, the Department encourages small entities to provide data on how additional requirements under Section 503 may impact them.

16. OFCCP seeks public comment on the types of small entities and any estimates of the numbers of small entities that may be impacted by this rule.

17. OFCCP seeks public comment on the potential costs of additional 503 requirements on small entities.

18. OFCCP seeks public comment on any possible alternatives to the proposed measures that would allow the agency to achieve their regulatory objectives while minimizing any adverse impact to small businesses.

Affirmative Action Alerts by Newland Associates

Welcome to the first of our Affirmative Action Alerts. With so many changes in AAP/EEO regulations under the Obama Administration and the OFCCP, it is important for organizations to stay abreast of how these events can impact their compliance status.

We will send out periodical emails with our Affirmative Action Alerts for your benefit. These alerts will include:

- Information on changes to applicable laws, implementing regulations and policy directives.
- Alerts of proposed changes at the OFCCP or Congress so that you can make you opinion count.
- Schedule of upcoming educational opportunities on Affirmative Action

If you know of someone who would like to subscribe to the Affirmative Action Alerts, tell them to write to us at info@newland-associates.com where they can request it.

We will keep a blog with an archive of all the alerts here at www.AffirmativeActionAlerts.com where you can research issues relevant to your affirmative action needs.

Thank you. I hope you find the Affirmative Action Alerts beneficial. Please, let us know your thoughts on how to make them better for you.