Attorney Shafeeqa Watkins Giarratani of Norton Rose Fulbright tells BloombergBNA what she thinks are key developments to emerge in 2013 from the Office of Federal Compliance Programs. She also discusses OFCCP's budget justification for fiscal year 2014, which outlines the agency's funding proposals and enforcement priorities.

If things go as planned, the end of 2013 will mark a significant change in how federal contractors comply with rules and regulations enforced by OFCCP.

In 2013, the agency hopes to issue final rules on compliance requirements under Section 4212 of the Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act. The new rules would strengthen affirmative action programs for veterans and people with disabilities.

OFCCP also plans to release a revised scheduling letter and itemized listing that would expand its request for employment activity and compensation data at the outset of scheduled compliance evaluations.

Bloomberg BNA: In assessing 2013, what has stood out to you as significant moments from OFCCP?

Giarratani: OFCCP has increasingly focused on pay discrimination this year and has recently stated that equal pay will be a "cornerstone" of its current enforcement activities.  Not only is pay a focus area, but earlier this year, OFCCP announced a new approach for conducting its compensation audits. 

Specifically, OFCCP rescinded its 2006 enforcement guidance regarding conducting pay audits, reasoning that those guidelines were overly restrictive and failed to provide full review of pay practices.  

The prior guidance was replaced with new guidelines that become effective this year.  The new guidelines provide OFCCP broad investigatory authority in compensation audits and employ a case-by-case approach to analyzing pay based on the contractor's individual pay practices.

As this year progresses, contractors should expect to see exactly how OFCCP will apply its new case-by-case approach to compensation audits.  However, what is clear now is that the new guidelines require more in-depth and detailed compensation audits. As a result, compensation audits will likely be lengthier and require more follow-up information from contractors.

Bloomberg BNA: Is there anything in OFCCP's 2014 congressional justification budget that signifies, in your mind, a fundamental change in the agency's enforcement policies?

Giarratani: Until now, OFCCP has typically conducted audits on a single establishment basis. The 2014 budget announces a fundamental change in the scope of certain audits.  

Indeed, OFCCP has stated its intention to greatly expand its investigations by examining not just a single establishment or location, but instead, by performing corporate-wide investigations in some cases. 

This vastly enlarges the current scope of audits and could lead to more expansive remedies.  In fact, OFCCP has explicitly provided that it plans to use enterprise-wide investigations to require changes in personnel practices throughout a contractor's entire corporate structure.

Bloomberg BNA: What will the remaining months of 2013 hold for OFCCP and its stakeholders?

Giarratani: Contractors can expect more comprehensive audits for the rest of 2013. In addition to an increased focus on pay, contractors should be ready for more emphasis on technical compliance for the remainder of the year. 

Contractors should expect specific questions (and be willing to show documentation) regarding compliance with obligations like posters and listing job openings with appropriate state unemployment offices.  

Contractors may also be required to demonstrate compliance with outreach requirements by providing documentation of individuals contacted and the content and result of specific outreach efforts.

Bloomberg BNA: What practical advice would you offer to contractors in preparing for OFCCP's final rules on Section 503, VEVRAA, and the revised scheduling letter and itemized list? All are targeted for release in 2013.

Giarratani: Don't wait to get prepared. If you have not already, get started now in understanding the requirements of the final rules and ensuring the ability to comply.  Review your organization's outreach efforts towards veterans and individuals with disabilities, and determine if there are any additional opportunities for outreach, including linkage agreements.  

Analyze your organization's recordkeeping to ensure it is able to comply with new recordkeeping requirements and, if there are any gaps, start working now to identify systems to close those gaps. 

Finally, begin training employees who handle affirmative action obligations now on the final rules.

Bloomberg BNA: Any final thoughts?

Giarratani: OFCCP has taken a more detailed and comprehensive approach in its audits in 2013.  Often, a contractor's best defense in an audit is strong documentation showing legitimate non-discriminatory reasons for employment actions.  Make sure your company is ready for an audit this year by ensuring your organization creates and retains good documentation for each employment decision.

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If you are interested in participating in a Q&A on enforcement actions, legal developments and news related to the Equal Employment Opportunity Commission or the Office of Federal Contract Compliance Programs or have a suggestion for a Q&A topic, send an email to lbridgeford@bna.com. You can also follow me on Twitter  @LCBridgeford.