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OFCCP’s contractor portal is new for everyone, and we are all learning how to use it.

But it presents a unique and interesting inflection point for higher education employers.

Let us explain . . .

OFCCP uses EEO-1 reports to identify the scope of potential contractor establishments for audit.  Because higher education contractors do not file EEO-1 reports, OFCCP has less visibility into those institutions and more importantly, less access to the data used to select contractors for audit.  As a result, the Agency has fewer higher education ping pong balls to draw from in its annual audit selection “lottery.”  It also results in OFCCP sending audit letters to often obscure divisions of a university that house the specific departments that entered into the federal contracts—and not more common addresses for a campus.

The contractor portal, however, might open the door to change higher education audit selection. Why is that? 

When registering for the portal, contractors (including colleges and universities) must identify each of their establishments to OFCCP.  They must disclose each establishment’s headcount, and they must certify that each establishment is covered by an affirmative action program.  These disclosures provide OFCCP with direct (and current) information on how a university sees its workforce.  They provide “better” addresses for audit selection.  And they can shed light on a university’s affirmative action program and workforce – which gives OFCCP “better” data to leverage to focus their higher education selections for audit.

What does that mean? With the certification deadline on the horizon, higher education contractors have a choice.

On one hand, they may report to OFCCP that they have a single establishment—the entire campus.  This will suggest to OFCCP that the campus has one affirmative action plan and that an audit will include every campus employee.  Simply put, if selected this will likely be a large audit, covering the entire system and all that a large-scale OFCCP audit entails.

On the other hand, consistent with OFCCP’s Technical Assistance Guide, a campus employer may conduct OFCCP’s fact-based assessment to determine whether its campus environment can support multiple establishments.  If it can, the employer may prepare a separate affirmative program for each establishment.  This targeted approach can focus affirmative action analyses and efforts, instill more ownership over plan results with decentralized leaders, and create less potential risk should an audit arise.

Why does this matter?  Well, the workforce within each establishment would include more similarly situated employees—and provide more meaningful insights for Department Chairs.  The hiring, promotion, termination, and compensation decisions for a single establishment will generally be made by a smaller number of common managers.  And because OFCCP considers workforce size in selecting contractor establishments for audit, any individual establishment would include fewer employees and, thus, may be less likely to be selected for audit than an overall campus.

Okay, how?  OFCCP’s guidance explains that some campus employers may have multiple buildings or schools that each can properly constitute separate establishments.  And therefore, each would appropriately be covered by a separate affirmative action plan.  In both its Educational Institutions Technical Assistance Guide and FAQs, OFCCP instructs that in making this assessment contractors should consider the following factors:

  • What is the function of the building, and how do the employees in the building interact with employees in other buildings?
  • Are employees across different buildings part of the same organizational unit, such as department, division, section, branch, group, job family, or project team?
  • Are the hiring, compensation, and other personnel decisions handled separately at each building or are those functions consolidated across the entire contractor or across multiple buildings on one campus?
  • Does each building handle its own recruitment or is that function consolidated across multiple buildings?
  • Do the buildings recruit from the same labor market or recruiting area?
  • To what extent are other human resources and Equal Employment Opportunity compliance functions operationally distinct for each building or group of buildings?
  • To what extent are other human resources and Equal Employment Opportunity compliance functions operationally distinct for each building or group of buildings?

Under this Agency guidance, if the factors balance such that different schools or colleges are sufficiently separate, a campus employer may prepare separate plans for each establishment on campus.  Even so, we have seen inconsistent responses in audits for employers who have relied on it.  In some instances, OFCCP has expected a single plan for the whole campus and pushed back, requiring a broader plan for audit.  In others, OFCCP has accepted the more limited submission without raising any questions.  Agency priorities can shift over time, so things may change.

But for now, one thing is clear:  the Contractor Portal will give educational institutions the opportunity to tell OFCCP how they believe their AAPs should be structured and how OFCCP should select its establishments for audit.   So, it is wise to think about it now—before certification.

For more information on the OFCCP contractor portal, please register here for our March 16, 2022 webinar, Navigating the OFCCP Contractor Portal: Registration and AAP Certification.

OFCCP’s Contractor Portal, which will be used for certifying AAP development, as well as for uploading documents and data during a compliance review, opened for registration (not AAP certification) on February 1.  If you’ve tried to register as a federal contractor or subcontractor at the OFCCP Contractor Portal, you may have encountered some “challenges.”  We have.

For example:

  • EEO-1 Company Number:  the system told us that the pre-populated employer company identification was associated with another employer.  Turns out, the company number is only the first six digits for Portal registration, not the complete seven digits that appear in your 2018 EEO-1 report.  OFCCP clarified this point this week in a mass e-mail:
    • Enter only the first six digits of the 2018 EEO-1 identifiers when completing the fields “Headquarter/Company Number” and “Establishment/Unit Number.” Each identifier you enter must be a six-digit number. If an EEO-1 identifier has more than six digits, enter only the first six digits of the number.
    • Enter EEO-1 identifiers from the 2018 EEO-1 report only. The Contractor Portal’s registration process is configured to work only with information from the 2018 EEO-1 report. At this time, no other versions of the EEO-1 report are supported.
  • DUNS number:  we found that to register, we needed a “0” as the first digit in the DUNS.  Without the “0,” we received an error message with no guidance as to how to correct the issue.
  • Establishment Information:  when we attempted to modify Establishment information, we encountered an error regarding the Company Number, without any guidance.  However, when we deleted the pre-populated Company Number, we were able to edit the Establishment information.

It appears that there will be challenges to Contractor Portal registration and that OFCCP will provide guidance as it becomes aware of the issues.  Likewise, as we encounter issues or tips, we will supplement this blog.  Stay tuned!

It’s here!  As we’ve been discussing, the Agency announced today during a live webinar the opening of the Contractor Portal, which will be used for AAP certification, as well as submission of data and documents during compliance reviews.  However, construction contractors will not be required to register in the Portal or certify AAP development – largely because such contractors are not required to prepare written AAPs under Executive Order 11246.

Between February 1 and March 30, 2022, the Portal will be open for registration only.  The Portal will not allow actual certification until March 31.

The deadline for existing contractors and subcontractors – those subject to Executive Order 11246, Section 503 and/or VEVRAA – to certify AAP development is June 30, 2022, although the Portal will remain open past June 30 for late registration.  Contractors will certify that they have or do not have current AAPs in place as of the certification date.  For example, a contractor with May 1, 2021 AAPs in place, can certify on April 1, 2022 that it has current AAPs in place because those May 1, 2021 plans have not yet expired.

New federal contractors and subcontractors will have 120 days from entering a covered contract to prepare written AAPs – according to existing regulations – and 90 days from then to register and certify in the Portal.

The Agency spent much of the webinar conducting a live walk-through of the registration process, which appears to be reasonably user-friendly.  The Portal also includes a User Guide and Updated Frequently Asked Questions.  There is also a  Contractor Portal Technical Help Desk available to assist with any questions.

What about Data security?  The Agency touted that the Portal follows applicable data security standards issued by the National Institute of Standards and Technology (NIST).

OFCCP will conduct another webinar – focused on certification – on March 31, the day the Portal will be open for certification.  Thus, today’s Agency webinar did not address more substantive questions about AAP certification.  One question the Agency did answer is, what are the consequences of failing to timely certify AAP development?  The answer goes to one of the objectives of Portal certification:  to identify non-compliant contractors and subcontractors for audit.  Those contractors/subcontractors who do not timely certify will be “more likely” to be selected for a compliance evaluation.

That answer begs the question of whether and how the Agency will be able to identify covered contractors and subcontractors who fail to timely file.  OFCCP says it will use (outdated) 2018 EEO-1 reports to notify existing contractors and subcontractors of the certification obligation and prepopulate registration data.  However, there will be procedures for updating relevant information before certification.

Parent companies can add users for subsidiary entities that are responsible for developing and certifying their own AAPs.  The Portal will allow contractors to register and certify consistently with the way it prepares and files EEO-1 Reports, but parent entities are ultimately responsible for certification by their subsidiaries.

Significantly, a covered contractor/subcontractor that does not receive an OFCCP notice email is still obligated to register and certify.

While the Agency has a good handle on identification of prime contractors, it acknowledges it does not have a comprehensive way of identifying covered subcontractors.  To that end, included in OFCCP’s latest Regulatory Agenda is a proposal to require prime contractors to notify OFCCP of covered subcontracts.  For some employers, it is difficult at best to determine if it has covered federal subcontracts.  OFCCP has little guidance for such employers, except to provide coverage guidance at its website.  This may leave some employers with a register-or-not conundrum.

In an e-mail delivered after the webinar, OFCCP “strongly” urged covered contractors and subcontractors to register as soon as possible so that they may also timely certify their AAPs by June 30.

Stay tuned for more substantive information regarding AAP certification.

As anticipated, OFCCP has published additional information, including an implementation timeline, for its Affirmative Action Verification Interface (AAPVI) Portal.  OFCCP provided the following timeline in its communication to contractors:

On Feb. 1, 2022, contractors may begin registering for access to the portal. OFCCP will also send an e-mail to each covered federal contractor in its jurisdiction whose email information is available in its system inviting them to register.

On March 31, 2022, contractors will be able to utilize the certification feature in the portal to certify their AAP compliance.  

By June 30, 2022, existing contractors must certify whether they have developed and maintained an affirmative action program for each establishment and/or functional unit, as applicable.

 

Additional information will be forthcoming from the Agency.  But in the meantime, OFCCP is directing contractors to its Contractor Portal Landing Page as well as its Frequently Asked Questions.

We will be reviewing this information and will provide additional updates and insights in the coming days.

The EEOC has announced on its EEO-1 Data Collection website that it has, again, extended the deadline for filing EEO-1 Reports this year—this time to October 25.  Employers still rushing to finalize and upload their 2019 and 2020 EEO-1 reports by the prior August 23 deadline will certainly welcome this extra breathing room.

But EEOC’s announcement makes clear that there will be no more extensions:

Please note that this new deadline is the FINAL DEADLINE and all eligible filers MUST submit data by this date.  No additional changes to the filing deadline will be made.

So it is wise for employers to continue to finalize these reports with urgency.  This year, the EEO Joint Reporting Commission must review and approve each company’s 2019 filing before it may file its 2020 data, which also must be approved.   This, among other things, has caused delays in certifying filings this year.  As the deadline approaches beware of this added step and be sure to plan ahead.

 

As yet another confirmation that pay equity will be a priority for the Biden-Harris administration, the proposed Paycheck Fairness Act has been reintroduced in the U.S. House of Representatives as H.R. 7.  The proposed legislation has a long history but has never been given a vote in the Senate – it last passed in the House of Representatives in 2019.

In summary, the current version of the Act would address the gender wage gap by amending the equal pay provisions of the Fair Labor Standards Act of 1938 to:

  1. restrict the bases on which pay disparities may be legally justified and exclude “any factor other than sex”;
  2. enhance nonretaliation prohibitions,
  3. make it unlawful to require an employee to sign a contract or waiver prohibiting the employee from disclosing information about the employee’s wages, and
  4. increase civil penalties for violations of equal pay provisions.

Notably, this version of the Act would require OFCCP to:

implement a survey to collect compensation data and other employment-related data (including hiring, termination, and promotion data) and designate not less than half of all nonconstruction contractor establishments each year to prepare and file such survey, and shall review and utilize the responses to such survey to identify contractor establishments for further evaluation and for other enforcement purposes as appropriate.

It seems this new OFCCP obligation could supplement OFCCP plans to require contractors to annually certify their AAP compliance, and seeks to fill the gap while EEOC studies the viability of collecting pay data for all employers through the EEO-1 reporting mechanism. For those of you who recall, this has remnants of the retired EO survey of years past.

There will likely be changes to the bill as it passes through the legislative process.  As always, we will keep you updated with further developments.

OFCCP has published a notice in the Federal Register extending the public comment period on its proposal to require federal contractors to submit an annual certification of their AAP compliance.  The new comment deadline is January 28, 2021.  While this notice does not state the reason for the extension, it appears the Agency received only 15 comments by the November 13, 2020 deadline.

As reflected in OFCCP’s original notice, it seeks regulatory authority to:

  • Require federal contractors to annually certify they have prepared AAPs via an online interface; and,
  • Institute “a secure method” to electronically submit AAPs when contractors are scheduled for an audit.

In a supporting document, OFCCP says it will use an online platform – the Affirmative Action Program Verification Interface (AAP-VI) – to execute a GAO recommendation “to collect and monitor Affirmative Action Programs (AAP) from covered federal contractors and subcontractors on a regular basis.”  This recommendation stems in part from GAO’s observation that OFCCP audits only about 2% of federal contractor locations each year.

OFCCP designed AAP-VI to increase contractor compliance by creating an annual certification process and to optimize the compliance review process by creating a tool for scheduled contractors to upload their AAPs electronically for OFCCP’s review.

AAP-VI will have five user interfaces for federal contractors, including an AAP Upload Interface and an Annual Certification interface.  Federal contractors would receive an OFCCP email with AAP-VI user registration instructions, which would also be posted on OFCCP’s website.

Once the process is effective, federal contractors would have 90 days to complete the certification process.   “After the initial certification year, OFCCP will set a date by which all existing contractors must renew their annual certification.”  New contractors would  have 90 days from development of their AAPs to make the certification.

The proposed certification process would require each federal contractor to annually select one of the following options in the AAP-VI interface:

  1. Entity has developed and maintained affirmative action programs at each establishment, as applicable, or for each functional or business unit. See 41 CFR Chapter 60.
  2. Entity has been party to a qualifying federal contract or subcontract for 120 days or more and has not developed and maintained affirmative action programs at each establishment, as applicable. See 41 CFR Chapter 60.
  3. Entity became a covered federal contractor or subcontractor within the past 120 days and therefore has not yet developed applicable affirmative action programs.  See 41 CFR Chapter 60.

Additionally, it is proposed that when scheduled for an audit, contractors would use AAP-VI to upload the applicable AAP(s) for the “scheduled establishment(s), functional business unit, or corporate headquarters.”

By January 28, 2021, OFCCP is seeking comments on a number of topics, including:

  • The frequency of the certification (the proposal is for annual certification, but some comments suggest every other year);
  • The type of information and level of detail to be required in the certification;
  • Whether certification would be practically useful to OFCCP in service of its mission, as compared to the burden on contractors; and,
  • Whether the estimated burden on contractors (36 minutes to certify) is accurate.

Contractors can submit their input to OFCCP via the federal e-Rulemaking portal at https://www.regulations.gov/ .

 

On September 22, 2020 President Trump issued an Executive Order “on Combating Race and Sex Stereotyping” (“September 22 EO”) covering government contractors and certain grant recipients that outlines what those organizations cannot include in employee training. It appears, the September 22 EO covers all federal contractors and subcontractors and will require contracting agencies to insert a contract clause in contracts (presumably, from the language of the EO new contracts only) entered into 60 days from September 22, 2020 addressing race and sex stereotyping.

Stemming from the belief that

[i]nstructors and materials teaching that men and members of certain races, as well as our most venerable institutions, are inherently sexist and racist are appearing in workplace diversity trainings across the country

the Order establishes a requirement that contractors and grant recipients not use any workplace training that

“inculcates in its employees” any form of race or sex stereotyping or any form of race or sex “scapegoating”

This includes prohibition on the following concepts:

  • one race or sex is inherently superior to another race or sex;
  • an individual, by virtue of his or her race or sex, is inherently racist, sexist, or oppressive, whether consciously or unconsciously;
  • an individual should be discriminated against or receive adverse treatment solely or partly because of his or her race or sex;
  • members of one race or sex cannot and should not attempt to treat others without respect to race or sex;
  • an individual’s moral character is necessarily determined by his or her race or sex;
  • an individual, by virtue of his or her race or sex, bears responsibility for actions committed in the past by other members of the same race or sex;
  • any individual should feel discomfort, guilt, anguish, or any other form of psychological distress on account of his or her race or sex; or
  • meritocracy or traits such as a hard work ethic are racist or sexist, or were created by a particular race to oppress another race.

Given this, the Executive Order could severely limit and curtail diversity and inclusion, sexual harassment, and related EEO training contractors and government grant recipients are allowed to provide to their employees.

Interestingly, the September 22 EO does not include a provision that regulations be issued to implement its requirements.   However, importantly, the Office of Federal Contract Compliance Programs has been tapped as the Agency to enforce the Executive Order.  Per the Order, the Director of OFCCP is required to publish a request for information within 30 days of September 22 seeking from federal contractors and subcontractors information regarding training, workshops or “similar programming” provided to employees, and interesting, that those materials, as well as information about the expense, frequency, duration of the trainings be provided to OFCCP.  There is no detail or instruction as to what OFCCP is required to do with the submissions. However, the executive order states violators can be subject to contract suspension or termination and the contractor may be subject to suspension or debarment.

In addition, the September 22 EO requires all federal agency heads to review their grant programs, and identify in a report to be provided to the Director of the Office of Management and Budget (“OMB”) within 60 days of issuance of September 22, programs that the agency determines as a condition of receiving grant monies that the recipient certify that it will not use federal funds to “promote the concepts” identified above with respect to federal government contractor prohibitions in training and related materials.

If fully implemented, the requirements of the Executive Order could require significant modifications to the content of trainings on race and sex including, diversity and inclusion and unconscious bias, that have become the mainstay for many employers, including contractors and grant recipients.  Some of these trainings are, or may be, required by other federal or state requirements, which could pose a conflict for contractors.

We anticipate challenges to this Executive Order.  We will be following this closely and will be back with future insights and developments.

As reported in today’s Federal Register, OFCCP is seeking regulatory authority to:

  • Require federal contractors to annually certify they have prepared AAPs via an online interface; and,
  • Institute “a secure method” to electronically submit AAPs when contractors are scheduled for an audit.

As we reported nearly a year ago, because OFCCP cannot conduct a compliance review of every federal contractor location every year, OFCCP wants an efficient alternative method to ensure all federal contractors are regularly preparing annual AAPs.  OFCCP’s desire for an annual certification process stems directly from a pre-COVID-19 Government Accountability Office (GAO) criticism that 85% of contractors do not timely submit AAPs within the 30-day deadline.  According to the GAO, that statistic “suggests that OFCCP processes do not ensure that all contractors are complying with their obligation to complete and annually update an AAP.”  Due to the COVID-19 pandemic, that percentage may now be even higher.

The Federal Register notice is short on details.  Instead, OFCCP is soliciting your input regarding, among other topics:

  • The frequency of the certification (the proposal is for annual certification);
  • The type of information and level of detail to be required in the certification;
  • Whether certification would be practically useful to OFCCP in service of its mission, as compared to the burden on contractors; and,
  • Whether the estimated burden on contractors (36 minutes to certify) is accurate.

The notice does appear to propose that contractors upload AAPs annually as part of the certification process, a possibility floated in the GAO’s 2016 report.

Contractors can submit their input to OFCCP on or before November 13, 2020 via the federal e-Rulemaking portal at https://www.regulations.gov/ .

As we receive more detail and assess the possibilities for the certification process, we will make sure to bring you our insights and updates.

In its most recent required status report to the court, filed September 27, 2019, the EEOC reports:

[s]o long as the Court’s order is in effect stating that the collection will not be complete until it reaches what the Court has determined to be the target response rate, the EEOC will continue to accept Component 2 data for 2017 and 2018.

The Component 2 filing website has also been updated with the following message:

In a September 27, 2019 Status Report that was filed in the lawsuit discussing post-September 30th activities, the EEOC stated that so long as the Court’s order is in effect stating that the collection will not be complete until it reaches what the Court has determined to be the target response rate, the EEOC will continue to accept Component 2 data for 2017 and 2018. EEO-1 eligible employers should continue to submit and certify their Component 2 EEO-1 reports for 2017 and 2018 as soon as possible.

As an update to its previous report, the EEOC is reporting that as of September 25, 39.7% of eligible filers have completed submission of the Component 2 data.

As soon as additional information is known about how long EEOC expects to continue to collect data we will let you know.