OFCCP Publicly Releases Updated Federal Contract Compliance Manual

With an emphasis on practical strategies to improve productivity and performance, and limit potential liabilities, Bulletin to Management™ concisely analyzes new developments in employment and human resources management.

By Jay-Anne B. Casuga

The Labor Department's Office of Federal Contract Compliance Programs Aug. 23 posted to its website its updated Federal Contract Compliance Manual, which provides internal guidance to the agency's compliance officers on evaluating federal contractors' adherence to their affirmative action and equal opportunity obligations and investigating discrimination complaints.

A DOL spokeswoman told BNA Aug. 22 that the revised FCCM is a “significant overhaul” that provides “the first comprehensive updates in more than a decade.” OFCCP provided an embargoed copy to BNA Aug. 22.

The 500-page, multichapter manual states that it provides OFCCP officers with a “framework for executing quality and timely compliance evaluations and complaint investigations,” as well as “procedural and technical guidance on compliance issues based on current agency procedures and processes.”

The manual covers such topics as desk audits and onsite reviews of supply and service contractors, and evaluations of construction contractors. It also discusses corporate management compliance evaluations, which generally involve reviews of corporate headquarters and employment practices affecting middle- and senior-level managerial employees, as well as functional affirmative action compliance evaluations, which review a contractor's affirmative action programs based on a functional or business unit instead of a geographic establishment.

In addition, the manual contains chapters dealing with complaint investigations, employment discrimination remedies, and resolutions for contractor noncompliance with requirements under Executive Order 11,246, Section 503 of the Rehabilitation Act, and Section 4212 of the Vietnam Era Veterans' Readjustment Assistance Act.

Achieves Goal of 'Providing Clear and Consistent Guidance

OFCCP Director Patricia A. Shiu first told BNA of plans to update the FCCM in a December 2010 interview, calling it a priority in ensuring nationwide enforcement consistency for both the agency and federal contractors.

“The revised FCCM is a major milestone in achieving my goal of providing clear and consistent guidance to my staff--the nearly 800 men and women who are on the front lines of civil rights enforcement,” Shiu told BNA in an Aug. 22 statement.

She added that she expects the updated manual to help compliance officers “do their jobs well, do their jobs in accordance with the law and do their jobs in a manner that reflects our commitment to leveling the playing field for businesses and ensuring fundamental fairness for workers.”

In its introduction, the updated manual states that it “does not establish substantive agency policy.”

“The FCCM does not create new legal rights or requirements or change current legal rights or requirements for federal contractors,” the document says.

Furthermore, it explains that if any conflict arises between provisions in the manual and the laws and regulations enforced by OFCCP, “the latter are controlling.”

John C. Fox, a management attorney with Fox, Wang & Morgan in San Jose, Calif., and a former OFCCP enforcement and policy official, told BNA Aug. 23 that it is important for federal contractors to understand what the FCCM is and what it is not.

“It is not law,” he said. “It is not a regulation. It is the director's guidance to her investigators in the field as to how to proceed when conducting a compliance evaluation. The compliance manual will defer and bow to the law.”

Attorney Highlights His Takeaways

Fox said the new manual memorializes several OFCCP processes and procedures established during the Obama administration that likely will require contractors to allocate more of their budgets to compliance efforts.

For example, Fox said the manual provides that compliance officers during a desk audit may request additional employment data from contractors for further analysis. OFCCP compliance evaluations generally begin with a desk audit to review contractors' affirmative action programs and supporting employment data and documentation.

The manual at Section 1P02 states:  

“Situations where it is appropriate to request additional employee level data include, but are not limited to, indicators or evidence of potential compensation discrimination based on summary data, indicators or evidence of discrimination with respect to another employment practice, complaints or anecdotal evidence, data integrity issues, reviews for quality audit purposes, or any review where more data or information is needed to make a compliance determination.”



Fox said contractors over the past year or two have found themselves subject to about a dozen or more such supplemental data requests from OFCCP compliance officers, lengthening the duration of desk audits.

He added that the new manual reflects what he called OFCCP's belief that it may conduct an onsite review of a federal contractor's establishment regardless of whether a desk audit reveals probable cause for further investigation.

“The compliance manual directs, not encourages, compliance officers while onsite to go into many different areas of investigation that have nothing to do with the agency's findings during the desk audit,” Fox said. “This is a major change in direction.”

Furthermore, Fox observed that the manual seemingly has altered OFCCP's “two-year rule,” which Fox said he and former agency Director Ellen Shong Bergman had established in 1983.

That rule, he said, allowed OFCCP to hold a contractor liable for any unlawful acts that occurred within the two years prior to the date of a compliance evaluation scheduling letter.

But the updated manual at Section 7C07 includes the following:  

“If the CO [compliance officer] finds a continuing violation, the contractor should provide remedies, except for back pay, for the entire period of the violation but not earlier than the effective date of EO 11246, Section 503 or Section 4212, as appropriate. Victims affected by a continuing violation can recover back pay for the effects of the violation that occur within the period beginning two years prior to the scheduling notice even when the specific act affecting them occurred outside the two year period.”



The effective dates for the executive order, Section 503, and Section 4212, respectively, are Oct. 24, 1965; Sept. 26, 1973; and Dec. 3, 1974.

“This is huge,” Fox said, explaining that the original two-year rule incorporated an assumption of a continuing violation.

OFCCP, he said, seemingly is adding a “continuing violation on top of a continuing violation.” The agency may apply this stance in the context of compensation discrimination, Fox said.

“This will be subject to litigation,” he predicted, contending that such a policy change must undergo a formal rulemaking process.

Solicitor Consulted for Updates

The DOL spokeswoman Aug. 23 told BNA that in conversations with federal contractors over the past several years, some have expressed concerns about “perceived inconsistencies in approaches to conducting compliance evaluations across regions and, sometimes, across offices,” as well as “the amount of time compliance evaluations can take to complete.”

OFCCP staff spent more than two years “updating and refining the FCCM to align its content with current law and the agency's practices, and to address the concerns expressed by contractors,” she said.

“Throughout the process of revising the FCCM, decisions about investigative protocols and interpretations of authority and statutes were made in concert with the Solicitor of Labor to ensure they meet all legal requirements,” the spokeswoman said.


Text of the FCCM is available at http://op.bna.com/dlrcases.nsf/r?Open=jaca-9aul9f.