LawFlash

OFCCP Releases Three New Directives for Federal Contractors

December 03, 2018

The Office of Federal Contractor Compliance Programs’ fiscal year 2019 directives rescind the Active Case Enforcement compliance review procedures, create early resolution procedures, and enhance compliance assistance through the Help Desk and opinion letters.

The US Department of Labor Office of Federal Contractor Compliance Programs (OFCCP) has issued three new directives, building on this administration’s nine directives issued in fiscal year 2018. The directives, effective immediately, are all geared toward greater transparency, compliance assistance, and enhanced guidance for federal contractors, while maximizing OFCCP’s limited resources.

Compliance Review Procedures, Directive 2019-01, rescinds Directive 2011-01 and provides that reviews will be conducted in accordance with OFCCP’s Federal Contract Compliance Manual (FCCM). The rescinded 2011 directive set out Active Case Enforcement (ACE) compliance review procedures. OFCCP states that the agency has embedded valuable components of ACE into its standard operating policies and procedures and updated the FCCM in August 2014 to incorporate the full desk audit procedures and closure letter templates. OFCCP concludes that in addition to other agency guidance, such as recent directives on transparency, compensation analysis, use of predetermination notices, and focused reviews, there is no longer a need for the ACE directive to exist as a freestanding guidance document.

Early Resolution Procedures, Directive 2019-02, “will help contractors and OFCCP achieve their mutual goal of equal employment opportunity in federal contracting and reduce the length of compliance evaluations through early and efficient resolutions.” The new procedures apply to all compliance evaluations in which a predetermination notice, notice of violation, or show cause notice has not been issued as of November 30, 2018. The agency’s intent is that the procedures will allow OFCCP and contractors with multiple establishments to cooperatively develop corporatewide compliance. Significantly, depending on the type of violation, if the contractor and OFCCP agree to corporatewide compliance and other terms, OFCCP will not schedule that establishment or all establishments covered by the agreement for a new compliance evaluation for the five‐year period, concurrent with monitoring.

Opinion Letters and Help Desk, Directive 2019-03, announces OFCCP’s intention to start issuing opinion letters to parallel the use of this type of guidance tool by other Department of Labor agencies. The directive also announces the agency’s desire to “enhance its Help Desk by making certain Help Desk [inquiries] and responses dynamically available and searchable as a self‐service option on OFCCP’s website.” OFCCP staff are directed to implement these enhancements and develop a process for issuing opinion letters.

What do these new directives mean for federal contractors? Overall, they demonstrate OFCCP’s continued commitment to more transparency and compliance assistance for the regulated community, which includes quicker resolution of issues and more conciliation opportunities.  First, federal contractors may want to consider seeking an opinion letter for fact-specific questions that they have been grappling with, such as OFCCP’s jurisdictional coverage or the application of a regulation or guidance. Second, federal contractors now have more insight into OFCCP’s procedures, and although OFCCP aims to schedule more frequent audits, its focus on early and quick resolution and closure for technical violations is good news. The agency anticipates that the new procedures and directives collectively will result in a decrease in the time it takes to complete a full desk audit and a more collaborative approach to resolving issues quickly. 

The Early Resolution Procedures directive is an important component of that approach. Federal contractors that are in the midst of, or scheduled for, compliance evaluations may want to seriously consider the option of entering into a corporatewide agreement if OFCCP finds potential material violations. Contractors should, however, carefully balance the benefits of a moratorium against the possible downsides of opening other establishments to OFCCP review.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Washington, DC
Susan Harthill
Jonathan L. Snare

Philadelphia
Paul Evans

Miami
Annie Estevez