OFCCP Releases Three New Directives for Federal Contractors: Compliance Review Procedures, Early Resolution Procedures, and Opinion Letters and Help Desk
The Office of Federal Contract Compliance Programs continues its flurry of activity with the announcement of three new directives on November 30, 2018, following the five that were issued in August and discussed in our August 2018 E-Update. Directives provide guidance to OFCCP staff or federal contractors on enforcement and compliance policy or procedures, but do not establish legally enforceable rights or obligations. We summarize these new directives as follows:
- DIR 2019-01 Compliance Review Procedures: Noting that it had recently adopted new guidance and procedures intended to increase transparency, increase the number of compliance evaluations, shorten the time to complete desk audits, and conciliate issues more efficiently, the OFCCP announced that there was no longer a need for its Active Case Enforcement Procedures Directive. Accordingly, the OFCCP is rescinding DIR 2011-01, and directing its staff to follow the compliance procedures described in its Federal Contract Compliance Manual and supplemental agency guidance, policies and procedures.
- DIR 2019-02 Early Resolution Procedures: This directive is intended to help remedy violations found during compliance evaluations more quickly by establishing Early Resolution Procedures (ERP) and providing guidelines for their implementation. In particular, the ERP are focused on contractors with multiple establishments to assist with corporate-wide compliance, beyond the establishment under review. The Directive sets forth procedures, ideally to be completed within 60 days, applicable to three types of violations, with the latter two applicable only to contractors with multiple establishments:
- Non-Material Violations – the Compliance Officer should seek to resolve the violation during the desk audit, provide compliance assistance, and issue a closure letter.
- Material Violations: Non-Discrimination – The OFCCP will seek to resolve violations (e.g. record keeping, applicant tracking, failure to implement audit and reporting systems, and failure to conduct self-analysis, among other things) through an Early Resolution Conciliation Agreement with Corporate-Wide Corrective Action (ERCA). The ERCA sets a report monitoring period. The contractor will be required to review all or a part of its remaining establishments for similar violations during that period and will provide progress reports and supporting documentation with specific information. The OFCCP will not conduct any further compliance review at the original establishment for five years, although it may conduct such review at other establishments including those covered by the monitoring requirement.
- Material Violations: Discrimination – The OFCCP will first request additional information and interviews regarding the violation to calculate a monetary remedy. Following receipt of the information, the OFCCP will complete a refined analysis. If discrimination is still indicated, ERP will be offered, during which the contractor may provide additional information to rebut the finding of discrimination. If discrimination continues to be found, the OFCCP will seek make-whole relief for the affected applicants and/or employees. The contractor will be required to review other establishments for similar violations and implement corrective action during a five-year progress report-monitoring period. No compliance review will be conducted of the covered establishments during this monitoring period.
- DIR 2019-03 Opinion Letters and Help Desk: To enhance its compliance assistance efforts, the OFCCP will make certain Help Desk inquiries and responses dynamically available and searchable on its website. It will also begin issuing Opinion Letters to provide fact-specific guidance, as other Department of Labor agencies have done (like the opinion letters discussed earlier in this E-Update). Either employers or employees may request opinion letters, and the OFCCP will establish a process for doing so.