Government Contractor Update: New OFCCP Directives and Minimum Wage Increase

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Following last month’s flurry of activity, as we discussed in the August 2018 E-Update, the Office of Federal Contract Compliance Programs has issued additional directives of interest to government contractors. In addition, the Department of Labor (DOL) has announced the updated minimum wage rates for certain workers performing work on federal contracts.

  • (Proposed) Directive XXXX-XX Functional Affirmative Action Programs: This proposed directive is intended to reduce the burden on contractors who wish to implement affirmative action programs based on functional units (that cross geographic locations), rather than by establishment. This is accomplished by entering into an agreement that is approved by the Director of the OFCCP. The OFCCP proposes the following significant revisions to the current Functional Affirmative Action Programs (FAAPs) directive:
    • Agreements would exist for five years, instead of three.
    • Eliminate the requirement to undergo at least one compliance evaluation during the term of the agreement.
    • Extend the 24-month exemption period following the closure of a compliance evaluation to a 36-month period.
    • Eliminate consideration of the contractor’s EEO compliance history in deciding whether to approve a FAAP request.
    • Remove the three-year waiting period to reapply for a FAAP after termination of an FAAP agreement.
    • Eliminate the annual requirement to modify the FAAP agreement.

This proposed directive is subject to notice and public comment for a 60-day period that closes on November 13, 2018, and comments may be submitted here. The OFCCP will then consider any submitted comments before issuing a final directive.

  • Directive 2018-08 Transparency in OFCCP Compliance Activities: This directive is intended to ensure transparency in OFCCP compliance activities “to help contractors comply with their obligations and know what to expect during a compliance evaluation, and to protect workers from discrimination through the consistent enforcement of OFCCP legal authorities.” The directive sets forth the following obligations for contractors and the OFCCP:
    • Contractors must:
      • Ensure non-discrimination and affirmative action in the workplace through implementation of EO 11246, Section 503 and VEVRAA requirements;
      • Submit affirmative action plans (AAP) and support data timely when scheduled for a compliance evaluation; and
      • Allow OFCCP access to its records and establishments, in accordance with applicable law and contractual provisions.
    • OFCCP will:
      • Be transparent and collaborative in educating contractors about how to comply with their requirements;
      • Conduct high quality, consistent, and efficient compliance evaluations;
      • Ensure there is open communication, cooperation, and intent to minimize unnecessary burden;
      • Make considerable efforts to resolve violations through conciliation; and
      • Stand ready to pursue litigation vigorously when necessary.

The directive then sets forth specific timelines and procedures that the OFCCP will implement in the course of all the stages of a compliance evaluation: scheduling, pre-desk audit, pre-onsite, offsite analysis, and conciliation efforts.

  • Directive 2018-09 OFCCP Ombud Service: The OFCCP announces the planned implementation of an Ombud Service to facilitate the resolution of specific types of concerns raised by external stakeholders. According to the directive:
    • The Ombud Service should require the Ombud to:
      • Listen to external stakeholder concerns about OFCCP matters and suggestions for improvements;
      • Promote and facilitate resolution of OFCCP matters at the district and region office level;
      • Work with OFCCP district and regional offices as a liaison to resolve certain issues after stakeholders have exhausted district and regional office channels;
      • Refer stakeholders to the OFCCP Help Desk for routine compliance and technical assistance inquiries;
      • Accept and review matters referred directly by the national office; and
      • Have the discretion to reject a referral in appropriate circumstances.
    • The Ombud Service will not:
      • Advocate for either side of a dispute;
      • Give legal advice, analysis, opinions, or conclusions;
      • Conduct compliance evaluations, complaint investigations or participate in conciliation agreement negotiations; and
      • Have any role in conduct or discipline issues regarding OFCCP staff.
  • Executive Order 13658 established a minimum wage rate, increased annually, for all covered workers performing work on construction contracts covered by the Davis-Bacon Act (DBA); service contracts covered by the Service Contract Act (SCA); contracts to provide concessions (g. food, lodging, fuel, etc.) on federal property; and contracts to provide services (e.g. child care, dry cleaning, etc.) in federal buildings. The DOL has announced the applicable minimum wage increase effective January 1, 2019: $10.60 per hour, with a tipped wage rate of $7.40 per hour. In addition, covered contractors must update the required minimum wage poster, available here.