OFCCP Will Speed Up Audits

Allen Smith, J.D. By Allen Smith, J.D. April 7, 2022
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U.S. Department of Labor headquarters

​The Office of Federal Contract Compliance Programs (OFCCP) recently issued a directive that will eliminate delays in scheduling audits as well as the automatic 30-day extension to submit items requested in audit scheduling letters. The OFCCP also announced that federal contractors must provide the personal contact information of employees, including their Social Security numbers, and said the agency may contact the workers directly.

"Not only did Directive 2022-02 do away with the 45-day grace period between appearing on the corporate scheduling list (CSAL)—the list notifying contractors they have been selected for an audit—and the commencement of the audit, it also does away with the automatic 30-day extension contractors had to submit items other than affirmative action programs (AAPs) requested in the audit scheduling letter," said Guy Brenner, an attorney with Proskauer in Washington, D.C.

"So, before March 31, 2022, a contractor could rest assured that it had a minimum of 75 days between notification of audit selection and having to submit its AAPs to the agency, and at least 105 days to submit the remaining voluminous materials sought during audits," Brenner said. "Now, it may have a total of 30 days between notification and submission of all materials, with a very high burden for obtaining additional time."

Removing the automatic 30-day extension for federal contractors is "extremely significant," said Joanna Colosimo, SHRM-SCP, vice president of workforce equity and compliance strategy and principal consultant with DCI Consulting in Washington, D.C. The extra time to prepare the compensation, employment activity and other support data was critical for large contractors that may have hundreds of AAPs to develop, especially if their annual plan date was close to the time the OFCCP issued the scheduling letter, she noted.

"Additionally, it is not uncommon for federal contractors to use the extra time to ensure data integrity in their applicant tracking data systems prior to plan development," she said.

"What I find interesting is that [the] OFCCP is emphasizing the importance of contractors conducting in-depth reviews of their total employment process in Directive 2022-1 and then [two weeks] later basically telling contractors to hurry up and finish their AAPs," said Lynn Clements, director of audit and HR Services for Berkshire in Columbia, Md. "The tenor of the agency's most recent directives suggests that contractors will face a tough audience in compliance reviews going forward. Contractors should not expect [the] OFCCP to grant extensions of time for initial audit submissions, with likely threats of show-cause notices and referrals to the office of the solicitor for denial of access."

Extensions in Extraordinary Circumstances

The new directive clarifies that extensions will be granted only in extraordinary circumstances. These circumstances include:

  • Extended medical absences of key staff.
  • Death in the immediate family of key staff.
  • Localized or company-specific disaster affecting records retrieval, such as flood, fire or computer virus.
  • Unexpected military service absence of key staff.
  • Unexpected turnover or departure of a key affirmative action official.

As soon as the federal contractor is aware of an extraordinary circumstance, the contractor may contact the OFCCP staff listed on the scheduling letter to request an extension. The OFCCP may ask for supporting documentation.

Reaction to Rescission of Transparency Directive

The OFCCP said it was rescinding Directive 2018-08, Transparency in OFCCP Compliance Activities, to benefit workers and minimize the delay in remedying employment discrimination.

"The transparency directive was probably the most popular directive from my time as director, well-liked by the entire stakeholder community, not only contractors," said former OFCCP Director Craig Leen, who is now an attorney with K&L Gates in Washington, D.C. "It was a good-government reform that was needed at the agency."

He noted that the transparency directive:

  • Committed the entire agency to transparency in all operations at every level as a matter of principle.
  • Treated contractors with respect, recognizing that most of them are in full compliance and want to get it right, thus treating them collaboratively instead of adversely.
  • Allowed contractors to contact OFCCP leaders if they believed OFCCP investigators weren't being clear in their requests and investigations.

"It is likely that the new administration experienced pushback from contractors on timelines for submission materials when they referenced Directive 2018-08 for automatic extensions," Colosimo said. "The new administration simply no longer wants to grant the extra time to contractors and its message in the new directive is one of timeliness, compliance and enforcement."

Personal Contact Information Sought

The OFCCP also highlighted the importance of contractors providing access to their premises and records relevant to the agency's investigation. This includes records, personal contact information, personnel files and applications that would enable the OFCCP to contact employees, former employees, applicants or other witnesses.

The agency noted that it may directly contact these individuals without the federal contractor serving as an intermediary. The OFCCP also said that it may request from the contractor the best available contact information or all available information on file, such as phone numbers, mailing addresses, e-mail addresses and Social Security numbers, for these individuals.

"In the few instances in my career when an OFCCP compliance officer has contacted employees directly without coordinating with the employer, it has always brought with it complaints from the employees themselves," said Joshua Roffman, an attorney with Roffman Horvitz in McLean, Va. "The employees don't understand why a federal agency is contacting them and are troubled by the fact that the employer provided their contact information to an agency without telling them in advance."

Colosimo added, "The announcement about requesting Social Security numbers was surprising."

"[The] OFCCP is clearly shifting its focus to systemic discrimination cases and strongly believes it needs access to data and information, including access to employees and applicants, to do that effectively," said David Cohen, president and CEO of DCI Consulting in Washington, D.C. "We hope that they will continue to honor their stated commitment to transparency and only request this information when there are true indicators" of discrimination.

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