Federal Contractors Can Expect Strong OFCCP Enforcement Effort on Affirmative Action

Posted on March 18, 2010 by Christa Richer Cook, Esq.

The Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”), the Federal agency responsible for enforcing affirmative action mandates against Federal contractors and subcontractors, recently reported on its enforcement efforts for fiscal year 2009. OFCCP collected $9.31 million in back pay from 94 federal contractors through settlements of discrimination claims last year. It completed close to 4,000 compliance evaluations, resulting in conciliation agreements with nearly 700 employers. OFCCP issued this data in connection with its budget request for 2011, which anticipates continued growth and aggressive enforcement efforts. Federal contractors can anticipate that OFCCP’s enforcements efforts will likely increase this year. The Agency’s budget for fiscal year 2010 was increased significantly by the Obama administration in order to increase the number of compliance officers and to meet the agency’s goal of conducting more on-site compliance reviews.

As reported by BNA’s Daily Labor Report, in 2010, the agency also intends to change its focus by increasing its affirmative action compliance efforts and more closely scrutinizing Federal contractors’ affirmative action plans. Construction industry employers are among those who are likely to be targeted in the coming year.

OFCCP has also announced a renewed emphasis on affirmative action efforts for veterans and disabled workers, which includes plans to amend and strengthen regulations under the Vietnam Era Veterans’ Readjustment Assistance Act and Section 503 of the Rehabilitation Act. In light of OFCCP’s expressed intent to make affirmative action its enforcement priority, federal contractors should ensure that their Affirmative Action Plans, and related data on employment actions, are in place, up to date, and in full compliance with regulatory requirements.
 

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Is Your Organization Required to Have an Affirmative Action Plan?

Posted on December 4, 2009 by Joseph Dole

As calendar year 2009 draws to a close, employers who do business with the federal government should examine whether they are required to have an annual affirmative action plan (“AAP”), and, if so, whether it is up to date. Executive Order 11246 (“EO 11246”) requires federal contractors and subcontractors who have 50 or more employees and at least one contract worth more than $50,000 to have an affirmative action plan, to update that plan annually, and to keep and analyze a wide variety of employment data during each plan year.  Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans Readjustment Assistance Act of 1974 create additional affirmative action plan obligations related to veterans and individuals with disabilities. A covered contractor's failure to satisfy its AAP obligations is typically revealed through an audit by the Office of Federal Contract Compliance Programs (“OFCCP”).  OFCCP is part of the United States Department of Labor and is charged with enforcing EO 11246. OFCCP selects contractors for audit using its Federal Contractor Selection System, which utilizes a variety of neutral criteria. The ultimate sanction for failing to comply with AAP obligations is debarment from federal contracts.

What contracts are covered by EO 11246? In general, a covered contract is one whereby the contractor agrees to supply goods or services to a federal administrative agency or department. Special rules apply to banks and construction contractors. A subcontract is covered if the subcontractor furnishes supplies, services or property necessary for the performance of any one or more covered primary contracts, or if the subcontractor agrees to perform any portion of the covered contractor’s obligations to the government. Generally speaking, receipt of some form of federal financial assistance does not create a covered contract. However, employers should examine the terms of any federal agreements to ensure that the agreement itself does not require an affirmative action plan.

If you are required to have an affirmative action plan, the plan, or separate plans, must cover each of your establishments, even if only one establishment has the covered contract. OFCCP defines an establishment as a facility which produces goods or services such as a factory, office, store or mine. Although it is clear that all of a contractor’s establishments must have a plan even when only one has a federal contract, questions related to when a parent or subsidiary must have a plan simply because a related corporate entity has a covered contract can be more difficult to answer. Whether some or all of the entities must have an AAP turns on whether the corporate entities are truly separate, a question that is answered using a multifactor test. The most important factor is common control of labor and employee relations.
 
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