Increase in OFCCP Audits Expected

The Office of Federal Contract Compliance Program (OFCCP) requires non-exempt federal contractors and subcontractors – including many hospitality employers – to take affirmative action to ensure equal employment opportunity in employment without regard to race, color, religion, sex, national origin, disability, or status as a protected veteran. Published OFCCP priorities in the Obama Administration include wage, promotion, and entry-level hiring discrimination; veterans and disability issues; and a renewed commitment to strengthening affirmative action. While the agency will continue its investigation of systemic discrimination cases, it has made clear that it will investigate all discriminatory practices – not just systemic cases – including harassment, retaliation, termination and failure to promote cases.

Hospitality employers should take stock of affirmative action programs (AAPs), ensure they are current, and conduct internal compliance reviews. If OFCCP schedules a compliance review for a hotel or other establishment, hiring (especially for service workers such as bartenders, banquet servers, cooks, laundry attendants, etc.) will be closely scrutinized. Well-documented and consistent decision-making is key to avoiding a claim by OFCCP of hiring or other discrimination.

On-site reviews are becoming a routine occurrence again, even in the absence of discrimination allegations. Recent experience with hospitality on-sites reflects OFCCP scrutiny of recruiting and outreach programs for protected veterans and disabled individuals. In addition, hospitality employers will be requested to produce current EEO-1 and VETS-100/100A reports.

OFCCP is better funded and more motivated now than in any previous administration in recent history. Noncompliance can result in burdensome agreements requiring periodic compliance reports to OFCCP; “make-whole” formula relief, including back pay, benefits, and interest, for victims of discrimination; and adverse publicity. Internal audits of compliance practices, conducted under the direction of an attorney to preserve privilege, can anticipate likely OFCCP concerns and improve overall compliance. Hospitality employers can expect aggressive enforcement in this area and should include an OFCCP self-check in a comprehensive review of labor, employment and immigration compliance and best practices.