On August 25, 2023, OFCCP issued a new Scheduling Letter and Itemized Listing (the “Scheduling Letter”) effective the day before publication and applicable to all compliance reviews initiated on or after August 24, 2023.
OFCCP initially proposed sweeping changes to the scheduling letter in November 2022. The contractor community responded by submitting lengthy comments opposing the proposed changes.[i] The comments focused primarily on two points—(1) the OFCCP’s burden calculation, which assumed that contractors could respond to the proposed letter in a mere 39 hours, a conservative 11 hour increase from the then-current scheduling letter and (2) the fact that there was no change to the 30-day submission deadline. OFCCP rejected the vast majority of the contractor community’s comments, issuing a slightly revised draft in April 2023.[ii]
Despite additional comments opposing even this “slimmed-down” version, OFCCP adopted the April 2023 version of the proposed letter without amendment.
New Data and Information Requested in the August 2023 Scheduling Letter
Executive Order 11246
Item 7: Contractors must provide documentation “demonstrating the development and execution of action-oriented programs designed to correct any problem areas identified” pursuant to a 41 CFR §60-2.17(b) assessment.
Section 503
Item 8: Contractors must provide documentation of outreach and recruitment efforts and additional details assessing the effectiveness of those efforts, and if found to be ineffective, provide “detailed documentation describing [the contractor’s] actions in implementing and identifying alternative efforts.”
Item 11: If underutilization of individuals with disabilities is identified, contractors must provide documentation describing “the steps taken to determine whether and where impediments for equal employment opportunity exist.” Such documentation shall include an assessment of personnel processes, effectiveness of outreach and recruiting efforts.
VEVRAA
Item 12: Contractors must provide documentation of outreach and recruitment efforts and additional details assessing the effectiveness of those efforts, and if found to be ineffective, provide “detailed documentation describing [the contractor’s] actions in implementing and identifying alternative efforts.”
Support Data
Item 16: Post-secondary education institutions are now required to submit Integrated Postsecondary Education Data System (IPEDS) reports for the last three years.
Item 18: When providing promotion employment activity data, contractors must also provide "documentation that includes established policies and describes practices related to promotions." Contractors are also required to provide “the total number of promotions by gender and race/ethnicity” at the start of the prior AAP year.
Item 19: Contractors are now required to provide expanded data on compensation, including:
- Employee-level compensation data for all employees. In addition to full-time and part-time employees, contractors must provide compensation data for the following additional categories of workers: contract, per diem or day laborers, and temporary employees.
- Two snapshots of compensation data: (1) as of the date of the organizational display or workforce analysis; and (2) as of the date of the prior year’s organizational display or workforce analysis.
- For each employee in the Item 19 compensation data: (1) “relevant data on the factors used to determine employee compensation”; and (2) “documentation and policies related to the contractor’s compensation practices, including those that explain the factors and reasoning used to determine compensation (e.g., policies, guidance, or trainings regarding initial compensation decisions, compensation adjustments, the use of salary history in setting pay, job architecture, salary calibration, salary benchmarking, compensation review and approval, etc.).”
Item 21: In light of the rise in AI tools, contractors must provide "information and documentation of policies, practices, or systems used to recruit, screen, and hire, including the use of artificial intelligence, algorithms, automated systems or other technology-based selection procedures." Compliance with this provision will likely be incredibly difficult given the broad scope of the request, the type of AI tools contractors may have in place, and the quality and extent of the vendor’s documentation.
Item 22: Contractors must provide documentation that demonstrates they have fulfilled their obligation under 41 CFR 60-2.17(b)(3) to evaluate “compensation system(s) to determine whether there are gender-, race-, or ethnicity-based disparities.”
Item 23: Contractors must provide documentation on reasonable accommodation requests received during the prior AAP year, and the outcome of the requests. If the contractor received the Scheduling Letter at least six months into their AAP year, they must provide reasonable accommodation request data for at least the first six months of the current AAP year
Item 24: Contractors must provide copies of EEO policies and documents which were in place for the immediately preceding AAP year as well as the current AAP year.
Item 25: In addition to providing the most recent assessment of personnel processes, contactors must “include, at a minimum, a description of the assessment, any impediments to equal employment opportunity identified through the assessment, and any actions taken, including modifications made or new processes added, as a result of the assessment.”
Special note for colleges, universities and other contractors with “campus-like settings”: Post-secondary institutions and federal contractors with “campus-like settings” that maintain multiple AAPs, must submit the information requested in the scheduling letter for all AAPs “developed for campuses, schools, programs, buildings, departments, or other parts of your institution, or company” located in the city and state listed on the letter.
[i] FordHarrison submitted comments in opposition to both the November 2022 and April 2023 proposed scheduling letters. If you are interested in receiving a copy of those comments, please contact your FordHarrison attorney.
Immediate Steps Contractors Can Take Now to be Audit-Ready
Despite the breadth of the new scheduling letter, the deadline for submission remains unchanged. Accordingly, contractors on the scheduling list should immediately begin preparations to meet the 30-day deadline by:
1. Meaningfully tailoring the generic narratives provided by AAP vendors to tell the contractor’s compliance story.
2. Developing a protocol for retaining records of action oriented programs undertaken during the AAP year.
3. Determining the scope of a 2.17(b) assessment to address any “problem areas” identified through the in-depth assessments. Contractors have great latitude to determine the type and scope of their “in-depth assessment” of recruiting, hiring, promotion, termination and compensation practices.
- Recruiting Assessment: Establish a process to evaluate the effectiveness of outreach and recruiting efforts under EO 11246, Section 503, and VEVRAA. For example, consider tracking the (1) number of individuals who attended each recruiting event or applied in response to a particular outreach effort; (2) number of minimally qualified applicants from each referral sources; and/or (3) level of public engagement with the recruiting page on the company’s website. Document any changes to the outreach and recruiting strategies and add it to your narratives. Develop a protocol for retaining records of action oriented programs undertaken during the AAP year.
- Assessment of Personnel Activities: With assistant of counsel, conduct a privileged review of statistical disparities in hiring, promotion and termination activity. Document non-discriminatory reasons for any disparities. Discuss with counsel any areas of concern in advance of a compliance review.
- Compensation Assessment: Prepare documentation of a compensation assessment. The assessment may be statistical and/or anecdotal. A statistical approach does not have to be a regression. The can be as simple as cohort analysis or a wage gap calculation. Investigate any irregularities. An anecdotal assessment may include a review of applicable policies and trainings to ensure they align with current practices. Revise as necessary. Gather relevant policies and training materials for submission to OFCCP.
4. Developing a standard communication to be sent to staffing agencies requesting relevant compensation data for contract/temporary/per diem employees and establishing timelines for receiving the requested information.
5. Gathering relevant employment policies related to internal compliant procedures, recruiting, screening and hiring and promotion processes.
6. Being prepared to identify “artificial intelligence, algorithms, automated systems, or other technology-based selection procedures.” Frequently assess outputs for adverse impact. Consult outside experts and counsel on whether validation is necessary.
Contactors should consider partnering with legal counsel well in advance of a compliance review to conduct a privileged mock audit. The new scheduling letter is a game changer. Advance preparation and self-assessment are the key to a successful OFCCP audit.
If you have any questions regarding the issues discussed in this Alert, please contact the author, Erica Johnson, associate in our Memphis office at ejohnson@fordharrison.com. Of course, you can also contact the FordHarrison attorney with whom you usually work or any member of our Affirmative Action/OFCCP Compliance practice group.