On May 23, 2017, the Trump Administration released its proposed fiscal year 2018 budget. Not surprisingly, the budget proposes significant changes for the Office of Federal Contract Compliance Programs (“OFCCP”).  In the Department of Labor’s budget proposal, the Administration has laid the groundwork to merge the OFCCP into the Equal Employment Opportunity Commission (“EEOC”) by the end of fiscal year 2018.  The merger is touted as intended to promote “greater policy coordination, management efficiency, and cost-effectiveness.”  According to the Administration, maintaining OFCCP as a separate agency “does not take full advantage of the opportunities to improve employment civil rights protection.”  It is worth noting that although the merger is the focal point of the OFCCP budget proposal, it appears to have little support outside of the Administration. Indeed, opposition to the proposal is shared by both business groups and workers’ rights advocates.

In addition, the proposed budget:

• Allocates $88 million to the OFCCP, a decrease of nearly $17.3 million (or 16.4%) from fiscal year 2017; and
• Cuts the OFCCP’s headcount from 571 full-time equivalents (“FTEs”) to 440 FTEs, a reduction of 131 FTEs (nearly 23%) from fiscal year 2017.

The proposed budget identifies priorities for the OFCCP in fiscal year 2018, which include the EEOC-OFCCP merger and “combating pay discrimination through intensive contractor compliance assistance aimed at educating contractors about their contractual obligations, supporting their voluntary compliance with those obligations, and conducting high quality compliance evaluations.”

The budget document also announces that the OFCCP will establish its two “Skilled Regional Centers.” These centers, to be located in San Francisco and New York, “would have highly skilled and specialized compliance officers capable of handling various large, complex compliance evaluations in specific industries, such as financial services or information technology.”  These centers appear to be part of a plan to reduce the number of field area and district offices.

Of course, the President’s proposed budget is just a proposal for Congress to consider as it prepares its appropriation bills. We will continue to monitor and report significant developments in the budget process.