The U.S. Department of Labor, including OFCCP, recently issued its Fall 2021 Regulatory Agenda, which identifies the regulatory goals the Agency would like to achieve during the fiscal year and beyond.  While OFCCP may not complete all (or even any) of these goals during the current fiscal year, the Agenda provides insights into the Agency’s objectives.

The following are the more important and substantive items in OFCCP’s Agenda.

• Proposal to Rescind Implementing Legal Requirements Regarding the Equal Opportunity Clause’s Religious Exemption

As reflected in an earlier blog post, OFCCP has previously announced its intention to rescind the “problematic” Religious Exemption Rule that the Trump administration implemented.

• Notification of Supply and Service Subcontract Awards

OFCCP has long been interested in better identifying for audit covered subcontractors and has previously proposed collection of this information as part of the revised scheduling letter (a suggestion it ultimately abandoned) as well as a suggestion it would implement a requirement for subcontractor disclosure as part of the AAP certification process.  The current proposal would add language to the Executive Order 11246 regulations to require contractors notify OFCCP when they award supply and service subcontracts. “The notice would include information currently unavailable to OFCCP, enabling it to schedule supply and service subcontractors for compliance evaluations.”

In conjunction with the AAP certification requirement, this requirement could significantly change the compliance landscape for covered subcontractors by making them more susceptible to OFCCP compliance reviews.  On the other hand, this might also assist employers to better identify if they are, in fact, covered subcontractors.  As it stands now, some employers are uncertain whether they provide supplies or services to prime federal contractors or upper-tier subcontractors that are “necessary to the performance of” those contracts and subcontracts, triggering AAP obligations.   This proposal will likely draw significant feedback when proposed.

• Access to Records Regulatory Updates

This proposal would make changes to 41 CFR parts 60-1 and 60-40 in order to bring OFCCP’s Freedom of Information Act regulations in line with relevant legal authorities and precedential case law, and to ensure consistency among OFCCP’s regulations on access to records.

Although it is not clear what regulatory changes would be made, it appears this Agenda item relates to public access to EEO-1 Reports that OFCCP collects during compliance reviews.  OFCCP currently does not provide public access to EEO-1 Reports in its files, but evolving caselaw may require a change.

• Modernizing Affirmative Action Programs, Recordkeeping, and Other Components of the Executive Order 11246 Supply and Service Obligations for Federal Contractors and Subcontractors

This broad item could cover a host of changes, none of which is particularly clear in OFCCP’s description, but is consistent with previous remarks from OFCCP Director Jenny Yang about her desire and efforts to modernize the agency.  OFCCP says it:

… will propose changes to modernize its Executive Order 11246 compliance program for federal supply and service contractors and subcontractors, including but not limited to recordkeeping and affirmative action program obligations.  In addition, the proposal will consider modifications in light of Executive Order 13988, Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation.

Based on the reference to Executive Order 13988, OFCCP might require more robust affirmative action obligations regarding the LGBTQ+ community.

• Modification of Procedures to Resolve Potential Employment Discrimination

This Agenda item could also prove to be significant for contractors in that it appears OFCCP would like to undo the Agency’s efforts under former Director Craig Leen to clarify and make more regimented the processes OFCCP must follow when asserting discrimination during an audit.

This proposal would modify certain provisions set forth in the November 10, 2020 final rule, Nondiscrimination Obligations of Federal Contractors and Subcontractors: Procedures To Resolve Potential Employment Discrimination (85 FR 71553) and make other related changes to the pre-enforcement notice and conciliation process. The proposal will promote effective enforcement through OFCCP’s regulatory procedures.

As discussed in an earlier blog, the final rule made a number of changes, that:

• Clarify that evidentiary standards that OFCCP must meet for a Pre-Determination Notice (PDN) must also be met for a Notice of Violation (NOV).

• Establish the use of the terms “qualitative” and “quantitative” evidence to describe the type of evidence OFCCP must identify in support of a PDN or NOV. Specifically, replacing reference to non-statistical and statistical evidence with these broader, more encompassing terms.

• Codify the use of the Agency’s consideration of practical significance in assessing potential violations and “help the agency ensure it is directing its efforts effectively.”

• Identify and differentiate procedures and burdens for disparate treatment versus disparate impact cases. This includes the requirement that OFCCP provide qualitative evidence for all disparate treatment cases and identify a policy or practice causing adverse impact with factual support for disparate impact cases.

• Establish that OFCCP must explain the basis for its findings, and for pay allegations provide the model, variables used and explanation why variables were excluded from its analysis upon request of the contractor.

• Provide the framework for contractors and OFCCP to explore early resolution procedures currently in use by OFCCP, as specifically set out in the Early Resolution Procedures program, during a review.

The final rule was largely seen as a positive development for the contractor community because it addressed criticisms around transparency and certainty that have plagued the Agency for years.

When (and if) OFCCP takes steps to propose regulations or modifications to existing regulations, we will blog about those proposals.