The Office of Federal Contract Compliance Programs (OFCCP) has recently published a new and extensive technical assistance guide (TAG) for “supply and service” (non-construction) contractors regarding their equal employment opportunity (EEO) and affirmative action (AA) requirements under Executive Order (E.O.) 11246, Section 503 of the Rehabilitation Act, and Section 4212 of the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA). The OFCCP has previously published new guides for educational institutions and construction contractors, as well as a new guide for “small businesses” that are not large enough to trigger the OFCCP’s formal affirmative action requirements. The OFCCP maintains a “landing page” for all technical assistance materials here.
The new TAG runs 74 pages plus another 83 pages of appendices and we recommend giving it a good read. However, there are some notable oddities and, in some cases, flat-out inaccuracies that you should be aware of as you do.
Affirmative Action Clarification
Right off the bat, the agency gets its own regulations wrong by stating in the “two general rules” that contractors are required to take affirmative action “to ensure equal employment opportunity without regard to race, color, religion, sex, sexual orientation, gender identity, or national origin.” That statement is true insofar as it goes, but ignores the plain fact that the OFCCP’s regulations implementing E.O. 11246 explicitly requires affirmative action only on behalf of women and people of color.
Affirmative action efforts on behalf of men or Whites* is permitted, should circumstances warrant, but that is generally left up to the individual contractor to decide. In an audit, the OFCCP could determine that such efforts are warranted and require the contractor to engage in affirmative action for men or Whites on a going-forward basis, but it would not be a violation of the agency’s regulations to have not done so up to that point.
*Note that BCGi capitalizes all official EEO-1 race/ethnicity designations in accordance with longstanding EEOC practice; capitalization is not meant to denote importance.
Contradictory Self-Identification Guidance
The TAG notes that contractors covered by E.O. 11246 are required to invite applicants to self-identify their sex and race/ethnicity, which is true. Although the OFCCP’s regulations do not require it specifically, it is necessary to meet the contractor’s affirmative action plan (AAP) and EEO-1 reporting obligations. Past agency guidance has noted that the OFCCP’s “Internet Applicant” rule generally allows contractors to screen-out jobseekers who do not meet the basic qualifications for the job and therefore do not “count” for AAP analysis purposes. Accordingly, contractors are allowed to perform this screen before inviting the remaining applicants to self-identify.
The new TAG, however, notes that although the OFCCP does not mandate a specific time in the selection process by which the self-ID invitation must happen, the agency suggests that “[c]ontractors should not wait until after assessing basic qualifications” to solicit self-identification. Note that the agency’s past guidance linked to above gets the law right here and the rest is unenforceable guidance. In other words, contractors are still permitted to wait until after screening for basic qualifications to solicit self-identification information.
Workforce Analysis Guidance
When preparing AAPs for women and people of color (POC), contractors have the option of preparing either an “organizational display” or a “workforce analysis” to meet the “organizational profile” requirement. The organizational display is basically an extremely complicated org chart while the workforce analysis is more like an EEO-1 report and is much easier to create and maintain. Accordingly, almost all contractors opt for the workforce analysis. But here is where the OFCCP gets confused.
If a contractor chooses to create an organizational display, the org chart has to identify and provide demographics for each unit’s “supervisor.” The workforce analysis, on the other hand, is described as “a listing of each job title as appears in applicable collective bargaining agreements or payroll records ranked from the lowest paid to the highest paid within each department or other similar organizational unit including departmental or unit supervision” (emphasis added).
Historically, the phrase “including departmental or unit supervision” was interpreted to describe what the agency meant by “department,” and contractors were not required to annotate the workforce analysis to identify each department’s supervisor. The TAG, however, offers a new interpretation under which “including departmental or unit supervision” means to identify the supervisor as one would if preparing an organizational display.
This is new, and it is unclear whether and to what extent it is enforceable. The TAG is clearly sub-regulatory guidance that is expressly not enforceable, but that the OFCCP’s regulations are. To the extent that the agency has changed its interpretation, this could very well become a requirement. If the agency pushes the point in an audit, a contractor will likely have to choose between updating the workforce analysis to satisfy the agency, or strapping in for a court fight. My guess is that most will opt to avoid the court fight as the return on investment there is unlikely to justify the expense.
The TAG also runs counter to decades of agency guidance regarding the sort order on the workforce analysis. The regulations clearly state that the job titles in each department must be ordered by “wage rate” from lowest to highest; that is not in dispute. But for generations, the OFCCP has allowed contractors to sort the opposite way—from high to low—so long as they are consistent, and the agency has published guidance to that effect. Here, the TAG sticks to the regulatory language. It is unclear whether or not the agency intends to enforce the order in which contractors sort their job titles on the workforce analysis. If you currently sort high to low, switching the sort order might avoid an unnecessary conversation with an OFCCP compliance officer in an audit.
New Guidance on AAP Job Group Size
The OFCCP’s regulations are completely silent on the issue of what is and is not an appropriate “size” for an AAP job group. Contractors are instructed to form groups of jobs “with similar content, wage rates, and opportunities,” but that is the extent of the guidance provided in the regulations. For years, the OFCCP has strongly encouraged contractors to ensure that their AAP job groups are “large enough for statistical analysis,” but has not required it.
For example, let’s say the AAP for my facility in Emporia, KS has just one HR professional in a sea of warehouse workers and supervisors. Since it is unlikely that the HR professional would be combined with any of the other jobs at this facility for availability purposes (because the demographics of available HR professionals, and the skills and experience necessary for that job, are likely too different from the rest of the positions at the facility), I end up with an AAP job group comprised of just 1 person. . The OFCCP will balk at forming AAP job groups for every job title as a matter of course, but where the contractor has made a legitimate decision to not combine job titles, the agency has little authority to challenge those decisions.
On the other hand, the new TAG states, “At a minimum, the job group should be large enough that when assessing underutilization in that group, a goal of at least one whole person can be established.” While that provides more detailed guidance than “large enough for statistical analysis,” the key word in there is “should.” Should is not must and there is no violation for forming an AAP job group with “too few” people in it.
External Availability
The new TAG is a bit misleading regarding the source(s) of information contractors are allowed vs. required to use when calculating the demographics of the external labor force for availability purposes. The OFCCP’s regulations state that contractors must use “the most current and discrete statistical information available to derive availability figures,” and provides examples such as U.S. Census data, data from local job service offices, and data from colleges or other training institutions.
The Department of Labor actually contracts with the U.S. Census Bureau about every 10 years to create “Special EEO Files” (referred to in the TAG as the “EEO Tab”) for contractors to use when calculating external availability. Historically, if that is the data source a contractor used, the agency has treated it as de facto “current and discrete” under the agency’s regulations. However, U.S. Census data is typically two years old before it is released to the public for these purposes. Because files are now created from a 5-year survey (not the decennial census), some of the data contractors are using today is as much as 15 years old!
When the Census data is too far out of date or otherwise does not accurately reflect the availability “pool,” contractors have the option of selecting a different data source that might provide more accurate and up-to-date information, such as the examples provided in the regulations. But the new TAG states that contractors “must use the EEO Tab for external availability data,” and that contractors “may supplement the EEO Tab with other external data sources” if they so choose (emphases added). That is just flat wrong. Contractors are not required to use any particular data source, and can use a non-Census source exclusively.
In practical terms, this is unlikely to be much of an issue for most contractors. But if you are using data other than the Census “EEO Tab,” be prepared to justify that in an audit if necessary. As long as your rationale is reasonable, the OFCCP should not press the issue.
More Goal-Setting Elbow Room
When the Federal Contract Compliance Manual (FCCM), used to train OFCCP compliance officers, was revised several years ago, language was added noting that contractors should choose one method for determining whether or not a placement goal must be set. Acceptable methods are the “any difference” rule; the “whole person” rule; the “80%” or “4/5ths” rule; or a more refined test of statistical significance.
Many contractors used a combined method, typically either the 80% rule or a test of statistical significance coupled with the whole person rule. The idea is that, regardless of the apparent size of the delta between incumbency and availability in percentage terms, if that difference does not at least equal one whole person, you do not set a goal. This comes into play particularly with very small AAP job groups where one person might represent a relatively large percentage of the overall group. It is a backstop to avoid setting placement goals for very small real differences and concentrate efforts where the difference is meaningful.
But the revised FCCM gave many OFCCP compliance officers the impression that a combined method was unacceptable—that contractors had to choose “one” method. The agency has been slow to clarify but typically does not push very hard on that point in audits. The new TAG finally clarifies that the agency’s edict is not so strict as some originally thought.
The TAG states that contractors “must uniformly apply the same method to all job groups, as appropriate, and contractors should not use more than one method to mask underutilization” (emphasis added). So as long as a combined test is not being used for nefarious purposes, the OFCCP should accept it.
The TAG goes on to note that, “in rare cases contractors may use more than one method in an AAP, such as when there is a single job group that is too small for a statistical method to provide a reasonable result.” In other words, for extremely small AAP job groups, the agency understands that a statistical test might be inappropriate, so rather than sacrificing the value of statistical results for all the larger AAP job groups, the contractor can use statistical tests when appropriate and otherwise use simpler tests, like the any difference or whole person rule.
In such circumstances, the OFCCP suggests, and BCGi agrees, that contractors should note the method(s) and reasoning in the body of the AAP narrative. Providing the OFCCP with an explanation up front will likely lead to a smoother audit experience.
Finally, the TAG suggests that contractors can deploy different methods for determining placement goals from AAP to AAP. For example, I can use the 80% test at one location and the whole person rule at another, and that would not violate the OFCCP’s regulations. However, BCGi does not recommend that practice. The OFCCP has, over the past several years, engaged in more “cross-office staffing” and has increased the ease and accuracy of sharing information across OFCCP regional and district offices. That means that the compliance officer handling the audit at your location in Boulder, CO will likely see the audit files of past audits at your locations in Nebraska and Pennsylvania. If the compliance officer notices that different methods are being used at different AAP locations, even though that is technically “compliant,” they may get the impression that the contractor is “cherry-picking” methods to minimize placement goals and wonder whether the contractor is trying to “game the system.” That is not a very good look in an audit and will likely lead to unnecessary conversations.
Personnel Process Review
The OFCCP’s regulations regarding the requirement to review “personnel processes” has always been vague. As an overarching matter, contractors are required to ensure that their “personnel processes provide for careful, thorough, and systematic consideration of the job qualifications of applicants and employees,” that they do not stereotype people with disabilities or veterans, and that only relevant portions of a veteran’s service record are considered when making employment decisions. Past that, the content and format of these periodic (not annual) reviews are largely up to the individual contractor.
The new TAG, however, provides a bulleted list of personnel processes to review, some of which contain words like “should” (recommended) and others that use the word “must” (mandatory). Unfortunately, the agency appears to be playing fast and loose with some of the “musts.”
For example, the TAG states that contractors “must” periodically review their reasonable accommodation practices and procedures. Please email and let us know if we are wrong on this point, but this commentator was unable to find any such requirement in the OFCCP’s regulations for federal contractor employers.
The TAG also states that contractors “must periodically review the accessibility of their online or electronic application systems to applicants and employees with disabilities and ensure that necessary reasonable accommodations can be easily requested and are readily provided when requested.” That is not entirely true. Contractors are required to provide assistance in completing online applications and must provide information on their career pages regarding how to request that help. Contractors must provide such accommodations in a reasonable amount of time, but not necessarily “readily.” And while BCGi recommends testing these accommodation procedures, nowhere in the OFCCP’s regulations is that actually required.
Parting Thoughts
The OFCCP has done a tremendous job in attempting to overhaul and improve the agency’s technical assistance offered to federal contractor employers and should be commended. The new TAGs are generally well-organized and thorough and can be useful.
But keep in mind that the TAGs are guidance. They cannot be “relied upon” in a legal sense by contractors, meaning that the OFCCP can’t be held to anything in the guidance. However, that goes both ways in that the OFCCP also cannot enforce anything in their guidance that is not rooted in regulations that have the force and effect of law. So, to the extent that the guidance strays from the agency’s regulations, the regs control.
That goes for definitions. The TAG provides definitions of terms that are not defined in the agency’s regulations, such as “applicant” and “promotion.” Unless and until the agency updates its regulations with official definitions of those terms, those definitions are still up to reasonable debate. If you have questions about this or any other OFCCP guidance, feel free to contact us at bcgi@biddle.com.