Rumors have long been swirling and the recent announcement makes it official: after just two years, Jenny Yang is stepping down from her post as the OFCCP’s Director to serve as the Deputy Assistant to the President for Racial Justice and Equity. Her last day as Director of OFCCP was Friday, March 31, her new job begins Monday, April 3.
Ms. Yang was a champion for equal pay at the EEOC before joining the OFCCP, and worked to strengthen both agencies’ practices regarding potential pay discrimination investigations.
Most would agree that to address pay equity issues, the actual pay of actual people must be evaluated. Trouble is that most employers hold pay data pretty close to the vest and loathe sharing this valuable (and potentially damning) information with federal law enforcement agents. The EEOC tried to address this by developing and implementing “Component 2” pay data reporting requirements into the existing EEO-1 reporting obligation for all employers subject to Title VII of the Civil Rights Act. The new pay data report was highly controversial and was pulled soon after implementation, ostensibly so the EEOC could evaluate the utility of data collected at that point. Since that time, “Component 2” reporting has remained “dead” but could be revived at some point.
The OFCCP had already been pushing contractors to turn over copies of compensation analyses in audits prior to the arrival of Jenny Yang, so when she brought her focus on pay equity to the OFCCP it seemed to most to be a good fit. However, the OFCCP’s regulations implementing Executive Order 11246 do not actually require federal contractor employers to engage in any sort of broad, statistical analysis of their compensation data on an annual or any other basis, much to the agency’s chagrin. To really “move the needle” in terms of the OFCCP’s authority and ability to investigate potential pay discrimination, the agency will need to update its implementing regulations, and that is often a multi-year effort that can span disparate White House administrations and leadership.
Perhaps the most important thing to come out of Director Yang’s tenure was the launch of the OFCCP’s AAP Verification Initiative (AAP-VI) utilizing the agency’s new software platform designed to be an all-in-one hub for managing audits and investigations, and to build-out a more robust database of federal contractor employers who can be selected for a compliance review.
The Information Technology project was ongoing for some years before Ms. Yang’s arrival, but she helmed the ship for its maiden voyage, opening the platform for contractors to log-in and certify whether they are compliant with the OFCCP’s AAP requirements. In case there was any doubt about the agency’s intentions, the OFCCP promptly generated its first audit list relying on AAP-VI data to identify contractors likely to be out of compliance.
The Director of OFCCP is appointed by the Secretary of Labor. However, the current Secretary is now the Executive Director of the National Hockey League Players’ Association and the Acting Secretary, Julie Su, is still awaiting Senate confirmation, so a permanent OFCCP Director appointment may still be a few months away.
Until then, Michele Hodge will serve as the Acting Director of OFCCP. Ms. Hodge is “home-grown,” a career OFCCP official that many may know from her work as the Director of the OFCCP’s Mid-Atlantic Region. She has been a fierce defender of employee rights and a bit of a disrupter in the OFCCP since her start as a Compliance Officer in New Jersey. She has repeatedly demonstrated willingness to think outside the box and innovate the ways the OFCCP investigates contractors. So while the job of an Acting OFCCP Director is typically thought to be focused on keeping the Agency running and not to implement policy changes, Ms. Hodge may bring her experience “in the trenches” to bear at least somewhat on the general direction of the OFCCP’s National Office. Anything more would be a guess, but one thing is almost certain—audits are unlikely to slow down over this.
The OFCCP still has its proposed revised audit scheduling letter winding its way through the Paperwork Reduction Act process, is still working on the next phase of the implementation of their new Contractor Portal, and is still struggling with the fact that the regulations that underpin all their work have not been significantly updated in nearly a quarter century, so there is plenty of work waiting for the next Director.
For contractors, though, nothing changes. The second year of AAP certification is upon us and it should be another wild ride. AAPs must still be prepared and implemented, and audits and investigations will still be going forward.
If you have any questions about this, or any other OFCCP-related matter, do not hesitate to reach out to us at BCGi@Biddle.com.