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Federal Contractors Must Proactively Prepare for OFCCP Audits

The OFCCP has much more aggressively pursued federal contractors during the past four years and, with the reelection of President Obama, every indication is that this trend will continue. OFCCP Director Patricia Shiu has declared the OFCCP’s goal is to conduct more “thorough” audits and to focus particularly on pay discrimination issues. Therefore, it is more important than ever for federal contractors to proactively audit and review their written Affirmative Action Plans (“AAPs”) and Affirmative Action Program to ensure they are up-to-date and compliant should the OFCCP come knocking.

Action Items:

Confirm Contractor Has Drafted Appropriate Number of AAPs

Any establishment (i.e., physical building/location) which employs 50 or more individuals must have its own written AAP. If, however, any of a contractor’s establishments employs less than 50, the employees in those establishments may be included in the AAPs of larger establishments. Regardless, all employees of a contractor must be accounted for in a written AAP and all establishments with more than 50 employees must have a separate AAP.

Confirm Contractor Maintains Appropriate Personnel Data

A Master Roster, Applicant Log, New Hire Log, Transfer/Promotion Log, and Termination Log are all required for an AAP to be compliant. The greatest number of errors identified by the OFCCP during desk and on-site audits involve a contractor’s failure to keep appropriate personnel data logs.

Investigate Any Placement Goals

If the statistical results of an AAP indicate a contractor has a Placement Goal in a particular job group (i.e., the actual number of minority and/or female employees is lower than would be anticipated given the composition of the workforce from which the contractor recruits), the contractor should conduct an investigation to determine if there were any openings in this job group during the plan year; confirm the job openings were properly posted with the State employment agency; and speak with its hiring managers and any other outside hiring resources about the Placement Goal.

Conduct a Compensation Review

Contractors must ensure there is adequate documentation regarding the legitimate, non-discriminatory reasons for any pay disparities between employees doing substantially the same job. Any compensation review should be conducted under the direction of legal counsel, if at all possible, to preserve privilege.