OFCCP Issues Two New Directives; Focuses on Compliance Evaluations and Faith-Based Organizations

Hitting the ground running, Acting OFCCP Director Craig Leen released two new directives on August 10, 2018.

Directive 2018-04

As anticipated from Leen’s conversations with contractors at the National Industry Liaison Group (NILG) conference in Anaheim, California during the first week of August 2018, the Office of Federal Contract Compliance Programs’s (OFCCP) Directive 2018-04 plans to initiate “focused reviews” in compliance evaluations scheduled in Fiscal Year 2019 (October 1, 2018 – September 30, 2019). During these reviews, OFCCP would go on-site to a contractor’s establishment and focus on one of OFCCP’s three authorities: Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA).

According to OFCCP, its aim is to ensure compliance with equal employment opportunity and anti-discrimination obligations. OFCCP will develop a protocol for and frequently asked questions (FAQs) concerning these reviews, which OFCCP hopes to make available to contractors prior to the issuance of the next audit scheduling list.

Directive 2018-03

Designed to ensure that faith-based organizations can compete for federal grants, contracts, programs and other federal funding opportunities, OFCCP issued Directive 2018-03 without notice to the contracting community. The directive cites several decisions from the Supreme Court of the United States as examples of cases addressing freedoms and protections that must be afforded to religion-exercising organizations and individuals, as well as President Donald Trump’s executive orders 13798 and 13831 regarding the federal government’s duty to protect and not impede religious exercise.

This directive instructs OFCCP staff to take these legal developments into account in all of their relevant activities, including providing compliance assistance and processing complaints, prior to an anticipated addition to the U.S. Department of Labor’s regulatory agenda and rulemaking. In a footnote, the directive notes that it supersedes prior guidance discussing how religious exemptions apply to sexual orientation and gender identity.

Acting Director Leen told contractors at the NILG conference that a substantial part of OFCCP’s mission is “education and guidance.” He laid out four goals for OFCCP in his keynote message to contractors: clear guidance to contractors about their obligations (including the possibility that OFCCP will issue opinion letters), a transparent conciliation and enforcement process (already enhanced by the requirement of predetermination notices when OFCCP alleges discrimination), reducing OFCCP’s case backlog and closing new compliance evaluations in an efficient manner (45 days if OFCCP doesn’t find compliance issues), and incentivizing compliance through awards and apprenticeship programs. Many of his stated goals and OFCCP’s expectations are contained in What Contractors Can Expect, a document published on OFCCP’s website on August 1 that signals a “friendlier” and less adversarial OFCCP.

Acting Director Leen also intends to ferret out noncompliant contractors by utilizing government databases such as the System for Award Management to discover which contractors have not certified compliance with their affirmative action obligations. Requiring contractors to submit and certify affirmative action program (AAP) summaries to OFCCP on an annual basis is also a possibility that OFCCP is exploring. Clearly, OFCCP is anxious to find ways to ensure that employers receiving federal contracts commit to and implement their affirmative action obligations; noncompliant contractors can expect to be the recipients of OFCCP’s attention.

Acting Director Leen is not letting the grass grow under his agency’s proverbial feet. While much of his message to contractors through these new directives and other publications is positive and collaborative, Acting Director Leen has made it clear that federal contractors must comply with the affirmative action obligations—including preparation of annual AAPs; extensive recordkeeping obligations; and outreach to minorities, women, individuals with disabilities, and protected veterans—or risk the agency’s enforcement wrath.