DOL’s Contractor Auditor Offers Buyouts in Face of Budget Cut

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By Jay-Anne B. Casuga

A Labor Department subagency that audits government contractors for affirmative action and nondiscrimination compliance offered “buyouts” and “early outs” to eligible employees ahead of a likely budget cut, according to a memo obtained Aug. 23 by Bloomberg BNA.

The offers of voluntary early retirement or voluntary separation incentives come as House lawmakers consider a roughly $10 million budget reduction for the DOL’s Office of Federal Contract Compliance Programs. A current House appropriations bill would fund the agency at $94.5 million in fiscal year 2018. That’s higher than the Trump administration’s $88 million budget proposal, but such a cut would still likely result in layoffs. The OFCCP’s annual budget hovered between $105 million and $106.5 million during the Obama administration.

The president’s budget proposal calls for a staff reduction of about 131 full-time equivalent employees, which would shrink the auditor’s workforce to 440 employees. It’s unclear how many workers would be laid off under the House’s budget. The Senate has yet to introduce its version of a fiscal 2018 funding bill for the DOL.

Buyouts are standard when a federal agency faces potential budget cuts and layoffs, two former OFCCP officials told Bloomberg BNA Aug. 23.

“Buyouts are the best way to right size staff depending upon budgets,” Lawrence Z. Lorber, a former OFCCP director under the Ford administration, said. Lorber is now senior counsel at Seyfarth Shaw in Washington.

“It has happened for decades,” John Fox, a former OFCCP official during the Reagan administration, said. Fox is now a management-side attorney at Fox, Wang & Morgan in San Jose, Calif.

Enforcement Impact From Staffing Changes?

The OFCCP is offering “buyouts” and “early outs,” respectively, under the Voluntary Separation Incentive Payment Authority and the Voluntary Early Retirement Authority, a DOL spokesman confirmed to Bloomberg BNA Aug. 23.

“This action is consistent with OFCCP’s ongoing, multi-year, effort to reshape its organizational structure and workforce to support federal contractor voluntary compliance and compliance enforcement,” he said.

Staffing level changes, whether increases or decreases, are “likely to have some impact” on the agency’s enforcement efforts, James Plunkett, senior government relations counsel at Ogletree Deakins in Washington, told Bloomberg BNA.

It remains to be seen what those impacts will be for contractors during audits, but contractor stakeholders previously told Bloomberg BNA that reduced staffing could affect the quality, speed, and efficiency of audits.

It also could affect the agency’s ability to draft training materials for its investigators, compliance assistance for contractors, or new regulations.

Not Necessarily Tied to Merger Proposal

The buyouts and early outs aren’t necessarily tied to an earlier Trump administration proposal to merge the OFCCP with the Equal Employment Opportunity Commission. That proposal generally has been opposed by the business community and civil rights groups. They have argued that the two agencies should remain separate because they have different enforcement goals and legal authority.

“I do not believe that the buyouts reflect merger preparation as there has been no legislation introduced to facilitate the merger either in the budget or substantively,” Lorber said.

If the merger proceeds, staff reductions would generally occur after the merger is approved and new staffing levels are established, Lorber said.

Neither the agency nor the administration or lawmakers have officially commented on the status of the proposed merger. But Alex Bastani, president of the American Federation of Government Employees Local 12, told Bloomberg BNA he believes the proposal is dead. The union represents national office DOL employees.

Voluntary Separations Deadline is Sept. 15

OFCCP employees who choose to voluntarily resign or retire must do so by Sept. 15, according to the memo.

The maximum voluntary separation incentive payment is $25,000.

Employees who choose early retirement must be at least 50 years old with at least 20 years of creditable federal service or any age with at least 25 years of service.

Agencies must request and receive approval from the Office of Personnel Management before offering buyouts or early outs to employees.

To contact the reporter on this story: Jay-Anne B. Casuga in Washington at

To contact the editors responsible for this story: Peggy Aulino at; Terence Hyland at; Chris Opfer at

For More Information

The OFCCP's memo is available at

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