How to Prepare for an OFCCP Audit

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May 6, 2013

How to prepare for an OFCCP audit

Candee J Chambers, SPHR, CAAP

Mgr, AAP/EEO Compliance



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Background

“For nearly 40 years, the rules have said that

contractors simply need to make a ‘good faith’ effort to

recruit and hire people with disabilities. Clearly, that’s

not working.” - OFCCP Director Patricia Shiu

“Sea change” in OFCCP’s enforcement.

- OFCCP Director Patricia Shiu



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OFCCP Regulatory Agenda

Regulation

Status Date Expected

(my best guess)

Systemic Compensation

Standards

Rescinded 2/2013

Directive 307 Issued 2/2013

Protected Veterans Final Rule Fall, 2013

Individuals with

Disabilities

Final Rule 2014 or later

Compensation Data

Collection Tool

NPRM 2014 or later

Sex Discrimination

Guidelines

NPRM Fall, 2013 or 2014

Construction Contractor

Regulations

NPRM Fall, 2013



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New political appointments

Sylvia Mathews Burwell confirmed as director of Office

of Management and Budget

Prior president of Walmart Foundation

Served as OMB deputy director in Clinton administration

Prior OMB presided over three budget surpluses in a row

Focus is on budget first

Tom Perez nominated as new DOL Secretary

Republicans threaten to block

Senate HELP Committee vote pushed back until May 8



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What does all this mean for federal contractors?

CSALs recently issued

How many will turn into actual audits?

Will sequestration have any impact?

Pre-notification of potential OFCCP audits

OFCCP is giving you a heads-up

Use this time effectively

How do you prepare?

Internal audits

Assume you received an actual audit letter



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Preparing for an OFCCP audit

Use the CSAL as it is intended

Run updated pay equity analyses

Look at employees in job group and job title groupings

Continue to use 2% or $2,000 disparity analysis

Ensure required posters are displayed in the facilities

Outreach, outreach, outreach

Veterans - Females

People with Disabilities - Minorities



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Preparing for an OFCCP audit

Review all of your Direct Compliance reports, by

month, for each location that received a CSAL

Contact the individuals that receive the job postings

and build relationships with them

Remember, OFCCP will contact them too

What will they tell the Compliance Officer?

Review your Direct Traffic reports and analyze your

traffic flow

Know how to get copies of job postings too



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Direct Compliance report



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Direct Traffic report

DOL site in partnership with Direct Employers

State Job Bank



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VETcentral Job Posting Example



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VERY IMPORTANT!!!

Expand your outreach efforts and focus on

veterans and people with disabilities

Company webpage updates with particular focus on

veterans and people with disabilities

Career Fairs focusing on veterans or people with

disabilities

Company Tours you have sponsored

Meet and Greet/Open House events

Wounded Warriors and Rehabilitation Services events



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Good faith efforts aren’t enough anymore

Keep track of all outreach – VERY IMPORTANT

Relationships already built

Activities/events in which you have participated

Contacts made (or attempted) but not confirmed

Last, but not least:

Measure the effectiveness of your efforts

If your efforts aren’t getting results, try something else



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Outreach tracking tool example



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OFCCP audit process

What are the most important things contractors can do

to ensure a successful outcome?

Build a positive relationship with the CO

Try to find something you might have in common

Mention affiliation with an Industry Liaison Group

Be pleasant in all discussions with the CO

Notify everyone with a ‘need to know’ that an audit

is underway – including Direct Employers!

Send AAP within the 30-day time period



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OFCCP audit process

Be clear on all the regulations and/or recent initiatives

Many COs are new and use checklists to know what to

ask for

Some COs do not know the regulations and may

request something they do not have the authority to

request

If this happens, reach out to those who can help if

you continue having trouble

Your AAP vendor

Direct Employers

NASWA



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OFCCP audit approach today

Recent OFCCP Experiences

Compliance Officers will call and ask questions about

compensation

Subjects discussed:

Contractor’s compensation practices

Factors that lead to compensation decisions and

classifications

What the contractor considers total compensation (e.g.

overtime, commissions, etc.)



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OFCCP audit approach today

Contractor will receive a follow-up letter from the

auditor requesting the submission of additional data

discussed during the call(s)

Message here:

Be VERY careful what you tell a Compliance Officer over the

phone

They are taking notes of what you are saying

They can change their request based on what you tell them

Only give them what they ask for – nothing more!!!



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OFCCP requests for additional information

Items currently being requested (which might create difficulties for

you in pulling this information):

Years of relevant experience – what does relevant mean?

Highest degree attained – for the job or in general?

Year in which highest degree attained

Market reference system used for the different salaries

What does this mean?

Start pulling this information now

Most of this information does not exist in your HRIS

OFCCP does not like delays



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Pay equity analyses

** Always use Attorney-Client Privilege **

Here’s the reason why:

“In addition, we are requesting any internal compensation

audits you have performed as stated in CFR 60-2.17 (b) (3)

and a list of all individuals involved in the compensation

process”

“Furthermore, please provide any additional information that

you feel may better explain your company’s compensation

system including other factors that influence compensation”



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Best practices

CEO and leadership support

Annual Management meetings

Accountability

Safeguarding Data Integrity

Awareness of changes in HRIS

Employment Actions Match HRIS

Frequent Monitoring of Employment Decisions & Follow Up

Hands-On Relationships with Community Organizations

Unbiased Internal Assessment (Mock Audit)



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Final thoughts…

Bottom Line:

The culture today with the OFCCP is more of a ‘we vs. them’

approach

They have an expectation that they will find discrimination in

one form or another in each audit

Audits can extend for an unlimited period of time so the CO

can revisit areas already discussed and agreed upon

OFCCP is now acting as a true enforcement agency

Contractors need to build relationships with their CO’s

Remember, everyone should all have the same goal:

Proving that companies are not discriminating!



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Q&A



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Thank you!

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How to Prepare for an OFCCP Audit