The Office of Federal Contract Compliance Programs ("OFCCP") is a government agency that is entrusted with monitoring the affirmative action efforts of certain federal contractors and subcontractors. Specifically, companies that provide goods and/or services to the federal government via federal contracts equal to or greater than $10,000 have basic affirmative action obligations. These obligations become much more extensive if the federal contract is equal to or greater than $50,000 and the contractor or subcontractor has at least 50 employees. If this threshold is met, the contractor is required to have a written affirmative action plan for each of the contractor's establishments even if certain company establishments have no connection to the federal government.
If a contractor has these more extensive affirmative action obligations, it is required to have a written affirmative action plan in which it details various good faith efforts that will be undertaken to affirmatively recruit and provide advancement opportunities for women, minorities, individuals with disabilities and veterans. This requirement does not obligate a company to depart from the principle of hiring the most qualified individual, regardless of race, sex, color, religion, national origin, age, disability or veteran status. In addition to the requirement of a written affirmative action plan, a company must also, among other things, maintain applicant flow data, retain completed applications for a two-year period, place job orders with the State Employment Agency, include an "EOE" tagline in all employment advertisements, maintain copies of all advertisements placed, and utilize recruitment services targeted at recruiting females, minorities, disabled individuals and veterans. The OFCCP monitors a covered contractor's affirmative action compliance through several different audit mechanisms including a compliance review, an off-site review of records, a compliance check or a focused review. A contractor is purportedly selected for one of these audits on a random basis; however, once one of a company's facilities is targeted for an audit, the randomness seems to escape the selection process.
If, indeed, a contractor is selected for an audit, it will likely undergo a compliance review by the OFCCP. A compliance review is the most comprehensive audit mechanism utilized by the OFCCP to monitor a contractor's affirmative action efforts. This is a complete review of the hiring and employment practices of the contractor. A compliance review has three phases, the first of which consists of a "desk audit." During the desk audit phase of the review, an OFCCP compliance officer reviews the contractor's written affirmative action plan and supporting data to evaluate the employment activity of the contractor, particularly with respect to the hiring and promotion of minorities and females. It is during this stage of the review that the OFCCP will target an area to focus on during the on-site portion of the review. For example, the OFCCP may require further explanation for compensation discrepancies for females or a decrease in hiring of minorities into entry-level jobs.
After the desk audit stage of the review, the compliance officer visits the contractor's facility to conduct the on-site portion of the audit. During this phase, the compliance officer will not only investigate the problems identified during the desk audit, but will also review personnel policies, tour the facilities, inspect personnel files and conduct interviews with both management and non-management employees to determine if affirmative action efforts are being undertaken and if employment discrimination exists in the workplace.
After conducting the on-site review, the compliance officer will conduct an off-site review of the information gathered at the facility. Upon completion of all phases of the compliance review, the OFCCP will close out the review in one of four ways. If the contractor escapes the review without any violations, the company will receive a "closure letter." If the contractor is cited for minor violations, i.e., failure to retain bid sheets or failure to properly track promotions, the company will instead receive a "closure letter with minor violations."
A third method of resolving an audit is the "conciliation agreement." This agreement is utilized by the OFCCP if material violations of affirmative action obligations are found. For example, if a contractor fails to maintain applicant flow data, fails to list jobs with the state employment office, or fails to make good faith efforts to recruit minorities or females for a particular job group, the OFCCP will issue a conciliation agreement. After entering into a negotiated final version of the conciliation agreement, the company typically has two reporting requirements during which time it updates the OFCCP on good faith efforts made to correct the violations detailed in the agreement. If conciliation efforts fail, the OFCCP will make a "recommendation of enforcement" in which it details alleged discrimination in employment. The remedies for a found violation can include back pay, front pay and reinstatement of employment.
If the OFCCP elects not to conduct a full-blown compliance review, it may still evaluate a contractor's affirmative action efforts by conducting an "off-site review of records." During this review, a compliance officer analyzes the company's affirmative action plan along with any supporting documentation, personnel policies and employment activity. If an off-site review of records is not conducted, the OFCCP may engage in a "compliance check" during which time certain records are merely inspected by the OFCCP. In particular, the OFCCP will review any reasonable accommodations provided to disabled employees, all job advertisements, and documentation regarding the achievement of prior year goals for recruitment and promotion. The fourth method of review is known as a "focused review" and consists of an on-site review of the company's affirmative action efforts in a particular practice area (e.g., promotions into sales positions, compensation of minorities in management). At the conclusion of this review, the OFCCP will again utilize one of the four closure methods above to finalize the review.
After a company has undergone the rigors of a review by the OFCCP and some closure mechanism is in place, the company is not safe forevermore from a second "random" review of its affirmative action efforts. Indeed, the OFCCP need only wait two years before it randomly selects the same facility at the same location for a full-blown compliance review. Therefore, the OFCCP's randomness is relative, and every covered government service and supply contractor should have a written affirmative action plan and a procedure in place to implement the plan's good faith efforts in case the notice of audit randomly falls on their doorstep.