As previewed yesterday in OFCCP Interim Director Michelle Hodge’s keynote remarks during the opening day of the NILG 2023 National Conference, OFCCP has released the final rule on “procedures for identifying and remedying discrimination in federal contracting.” Commonly referred to as the PDN rule, the Pre-Enforcement Notice and Conciliation Procedures rule will be officially published in the federal register on August 4, 2023 and will go into effect on September 5, 2023.

Director Hodge announced the release of the final rule in a blog titled “Department of Labor Establishes Final Rule that Promotes Equal Employment Opportunity” in which she reports the new rule

restores flexibility to OFCCP’s pre-enforcement and conciliation procedures, promotes efficiency in resolving cases, strengthens enforcement and promotes alignment of the standards of Title VII of the Civil Rights Act of 1964.  

The new rule modifies the Agency’s earlier “Nondiscrimination Obligations of Federal Contractors and Subcontractors: Procedures to Resolve Potential Employment Discrimination” rule which took effect on December 10, 2020.

In an e-mail from OFCCP announcing the rule, the Agency stated

[t]he 2020 rule imposed inflexible evidentiary requirements early in the agency’s compliance evaluation process and attempted to codify complex definitions for “qualitative” and “quantitative” evidence and other standards. These evidentiary standards and definitions hindered OFCCP’s ability to pursue cases with merit and diverted agency and contractor resources away from addressing discrimination.

We are in the process of reviewing the final rule and will be back soon with further thoughts and insights.

Day One of the NILG 2023 National Conference is in full swing. Not deterred by the outdoor temperatures, conference attendees, presenters, vendors and Agency representatives enjoyed a first day’s agenda overflowing with informative sessions where “ideas are nurtured and knowledge is exchanged” as part of this year’s conference theme of “Transforming for Tomorrow.”

The Opening Ceremony started with a traditional dance from representatives of the Yellow Bird Apache Indians.

Acting OFCCP Director Michelle Hodge was the morning’s keynote speaker. Director Hodge opened her remarks by addressing the recent United States Supreme Court Decision addressing affirmative action in higher education admission programs, stating there is a

“bright line between that ruling and the work we do”.

She stated the work is “wholly distinct” and there continue to be lawful and appropriate ways to foster inclusive workplaces”. She shared her belief that “diversity is one of our country’s greatest strengths.”

 Director Hodge then went on to describe what contractors can expect from OFCCP. “Strengthening enforcement efficacy and efficiency” topped the list followed by modernization and tightening unnecessary extensions as well as strengthening data analytics, and agency hiring and training.

As far as Agency priorities, Director Hodge listed three specifically:

  1. Strengthen enforcement to protect underserved marginalized workers
  2. Dismantle hiring barriers
  3. Expand outreach and education outreach efforts  

Spending a good deal of her remarks on the first item, Director Hodge shared statistics about OFCCP contractor portal compliance, discussed the agency’s focus and perspective on contractors’ compliance obligations with respect to use of artificial intelligence in the hiring process and the state of OFCCP’s rulemaking efforts. Director Hodge shared that the final PDN rule should be released in the coming days. She noted the rule will “restore” the Agency’s flexibility in audits but also “continue to promote transparency and consistency by requiring continued use of the PDN.”

In closing, highlighting the conference theme by noting “the time is now to transform for tomorrow,” Director Hodge invited conference attendees to “reflect on your workplace programs“ and to ask the question “does the intent of your policies in practice remove barriers or create them?” 

The remainder of the day was filled with thought-provoking sessions on a wide variety of topics, including OFCCP’s approach to pay in audits, artificial intelligence, disability accommodations, ESG, OFCCP enforcement statistics and audit trends, military recruitment best practices and a whole host of other informative discussions.

We are looking forward to Day Two which will kick off with an address from EEOC Chair Charlotte Burrows.

Have a great evening and we’ll see you tomorrow!

As a reminder, the deadline to implement the latest, updated version of the Section 503 voluntary disability self-ID form is July 25, 2023.

The OMB approved revised form, including versions in various languages, is available on OFCCP’s website.

OFCCP also provides a number of Frequently Asked Questions regarding implementation of the form that contractors may find useful, including information on what may and may not be altered with implementation of the form.

A new Federal Acquisition Regulation (FAR 52.204-27) enacted in June 2023 requires companies with covered contracts to ban the use of TikTok and other apps developed by ByteDance Limited on employee devices, including personal cell phones, which are used in the performance of government contracts.  The ban does not apply to devices “incidental to a Federal contract” however, the term “incidental” is not defined.

The ban applies to federal contracts that include the FAR clause (FAR 52.204-27), which Federal agencies were directed to include in all new solicitations beginning June 2, 2023. Existing contracts and indefinite-delivery contracts may also be amended to include the new clause.  The ban is far-reaching and applies to contracts below the micro-purchase threshold, contracts for commercial products and services, and Commercially Available Off the Shelf (COTS) items.

While the interim rule is already in effect, public comments are still being solicited. The ban was designed to ensure data security but could create headaches for federal contractors as it may implicate wage and hour, free speech and other legal issues.   

Prime contractors must flow down the clause in subcontracts, but there is no current mechanism requiring prime contractors monitor compliance by subcontractors.  There is no self-certification or non-compliance reporting obligation.

To ensure compliance with the new rule, contractors should take the following steps:

  • Review contracts, bids solicitations and any requests for amendment: Examine existing contracts entered in after June 2, 2023 and upcoming solicitations to determine applicability of the ban.
  • Update policies and procedures: Revise company policies and procedures to reflect the ban on TikTok usage and its impact on device policies.  Consider obtaining employee acknowledgment of the policy.
  • Block TikTok on company-issued devices: Take necessary technical measures to prevent the usage of TikTok on devices owned by the company, including those issued to employees.
  • Discuss implications with counsel: The TikTok ban may have an impact on existing policies and practices, and it may create other legal risks and compliance issues, especially in connection with personal employee devices used for work.

The deadline for federal contractors and subcontractors to certify compliance with the affirmative action regulations in the OFCCP Contractor Portal was June 29, 2023.  Leading up to the deadline, many contractors experienced technical issues in registering and certifying on the portal. 

OFCCP released a statement on June 30th stating that

OFCCP will consider a contractor’s registration and/or certification timely if the contractor has a pending request for assistance as of June 29, 2023.

The communication further stated that while the Help Desk is currently working through the open help desk tickets,

the deadline to certify compliance has not been extended. 

OFCCP directs any contractor or subcontractor that has not registered, certified, or submitted a help desk ticket should do so “as soon as possible.”  The Help Desk is still open to assist contractors and subcontractors with the registration and certification process.

We continue to monitor developments with the Contractor Portal and will provide updates as new information becomes available. If you have questions, please contact the Jackson Lewis attorney with whom you regularly work or a member of the Affirmative Action, OFCCP and Government Contract Compliance Group to discuss.

In an update on its EEO-1 Component 1 Data Collection landing page, EEOC pushed

“the tentative opening of the 2022 EEO-1 Component 1 data collection to the Fall of 2023.”

As previously reported, EEOC originally anticipated the portal to open mid-July 2023.  Due to the Agency completing a “mandatory, three-year renewal of the EEO-1 Component 1 data collection by the Office of Management and Budget (OMB),” the opening has been further delayed.  Last year the reporting period began in April with a deadline of May 17, 2022.

A final opening date as well as the opening of the filing support Message Center will be posted to the EEO-1 Component Data Collection landing page once available.  We will keep monitoring developments in this area and will update as more information becomes available.

On June 5, OFCCP released a new Corporate Scheduling Announcement List (CSAL) for construction contractors. The CSAL is the list of construction contractors selected for upcoming audits by the Agency. OFCCP last released a CSAL for construction contractors in 2021.

This CSAL comes on the heels of OFCCP’s Mega Construction Project Program launch and furthers former OFCCP Director Jenny Yang’s campaign to increase OFCCP’s oversight of construction contractor affirmative action compliance efforts.

OFCCP stated that the list includes “250 federal contractors, federally assisted contractors, and federally assisted subcontractors.” The Agency’s scheduling methodology explains that the CSAL was developed by first “downloading federal construction contracts valued over $10,000 from the USA spending database.” The U.S. Department of Transportation provided similar information to OFCCP related to federally assisted construction contracts. The list was then narrowed to those contractors with the highest aggregated contract values, with start dates prior to May 15, 2022, and end dates after May 15, 2025. Finally, OFCCP removed contractors currently under review in a monitoring period pursuant to a conciliation agreement or within the exemption period after a compliance evaluation.

OFCCP indicated that it would not schedule any compliance evaluations from this CSAL until the 2021 construction contractor CSAL has been exhausted.

As a reminder, the construction contractor affirmative action requirements differ significantly from those applicable to supply and service contractors. However, some construction contractors may be subject to both sets of requirements. This advance notice represents an excellent opportunity for contractors on the CSAL to ensure compliance with all applicable regulations and prepare for their impending audit.

We will continue to monitor developments in this area and provide updates as appropriate.

The Office of Federal Contract Compliance Programs (OFCCP) has been working to revise the scheduling letter and itemized listing it uses to initiate compliance reviews of supply and service federal contractors and subcontractors. After considering public comments, the Office of Management and Budget (OMB) has released a new version of the proposed Scheduling Letter and Itemized Listing.

The modified proposal comes with an additional public comment period.
The public can submit comments on the new proposed Scheduling Letter and Itemized is until May 17, 2023. Once the comment period closes, OMB will start reviewing the proposed scheduling letter under the Paperwork Reduction Act. OFCCP will not be authorized to utilize the new scheduling letter until OMB grants its approval.

We are reviewing the proposed changes and will follow up with an updated blog post discussing them. Stay tuned!

OFCCP has once again updated the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) hiring benchmark. Effective March 31, 2023, the new veteran hiring benchmark (the percentage of total hires who are protected veterans that the contractor seeks to hire in the following AAP year) is 5.4%. This is a 0.1% decrease from the 5.5% mark set last year and continues the trend of reduced benchmarks. The database with previous benchmarks can be found here.

As a reminder, contractors required by VEVRAA to develop a written affirmative action program (AAP) must also establish a hiring benchmark for protected veterans every year, or adopt the national benchmark provided by the Office of Federal Contract Compliance Programs (OFCCP) each year, as part of their AAP update. Under either approach, contractors must compare the percentage of hires who are protected veterans in each of their written AAPs to the hiring benchmark set for that AAP. Contractors should use the result of this comparison when assessing the effectiveness of their veteran outreach and recruitment efforts.