On March 31, 2022, the Office of Federal Contract Compliance Programs (OFCCP) issued its second directive of the Biden administration, Directive 2022-02, titled “Effective Compliance Evaluations and Enforcement.” The policies outlined in the new directive signal the end of the contractor friendly policies of the Trump era and a return to an enforcement heavy compliance regime.
Directive 2022-02 revokes several Trump era directives including Directive 2018-06, Contractor Recognition Program (Aug. 24, 2018); Directive 2018-08, Transparency in OFCCP Compliance Activities (Sept. 19, 2018); Directive 2020-02, Efficiency in Compliance Evaluations (Apr. 17, 2020); and Directive 2021-02, Certainty in OFCCP Policies and Practices (Dec. 11, 2020). These policies were initially developed as a part of the OFCCP’s CERT initiative towards certainty, efficiency, recognition and transparency in compliance.
Directive 2018-06 was intended to recognize consistently high-performing compliance programs and to support proactive approaches to compliance. Directive 2018-08, among other things, established automatic deadline extensions for data submissions and scheduling processes for contractors. Directive 2020-02 outlined practices for developing measures to study and review enforcement data from previous years to ensure efficiency. Lastly, Directive 2021-02 committed the OFCCP to an annual review of all policies and practices.
Together, the four policies were largely designed to increase the lead time contractors would be afforded to ensure that they were in compliance with OFCCP regulations and decrease the amount of time audits were open. However, certain aspects of the revoked directives have been mentioned in Directive 2022-02, such as the OFCCP’s continued commitment to promoting proactive approaches to compliance and “transparent communication” at all stages of the compliance evaluation.
In addition to revoking old Trump era policies, Directive 2022-02 also includes numerous substantive changes to the OFCCP’s enforcement process. First, Directive 2022-02 formally codifies the removal of the initial 30-day extension to submit contractor support data during a compliance review.
Additionally, contractors whose establishments appeared on the annual pre-audit Corporate Scheduling Announcement List (CSAL) were previously guaranteed a 45-day grace period before they would receive an audit scheduling letter. Now, the OFCCP may send an audit scheduling letter as early as the same day the CSAL is published. The OFCCP also noted that contractors selected for audit in the future will be those “with greater risk factors for noncompliance with nondiscrimination and affirmative action requirements” but did not identify how those contractors would be identified.
In keeping with their enforcement focus, the OFCCP noted that contractors should be routinely conducting self-audits to ensure that they are in compliance with OFCCP regulations. The enforcement changes noted above mean that the OFCCP will demand — on a significantly faster timeline — all materials required by the standard scheduling letter and itemized listing for an audit. The OFCCP also noted that “failure to [provide these materials may] result in the issuance of a Notice to Show Cause why OFCCP should not initiate enforcement proceedings.” The OFCCP reminded contractors that the OFCCP has the discretion to immediately refer the matter to the Solicitor of the Department of Labor for administrative enforcement when a contractor refuses to submit affirmative action plans or other requested information, and efforts to conciliate the matter are unsuccessful.
The combination of the OFCCP’s recent directives and the newly launched Contractor Portal signal tightened compliance requirements, including mandating that contractors certify compliance with federal affirmative action plan regulations, requiring potential production of evidence of contractor’s evaluation of compensation systems during audits, as well as shortened audit response times. As a result, it is advisable for contractors to be proactive and timely in ensuring their compliance with all affirmative action programing regulations.
These processes and requirements are still developing and will be covered in future alerts. If you have questions or need assistance in developing compliant affirmative action plans, please contact a member of Faegre Drinker’s OFCCP and affirmative action compliance team.