NEWS

By Jay-Anne B. Casuga

Aug. 4 — With less than six months left in President Barack Obama’s term, the Labor Department’s Office of Federal Contract Compliance Programs must now prepare for a transition to a new administration, and contractors can expect “big changes” at the agency, a management attorney said Aug. 3.

Whether Donald Trump or Hillary Clinton becomes president, a three-phase transition will begin after the November election, John Fox of Fox, Wang & Morgan in San Jose told attendees of a National Industry Liaison Group conference in Charlotte, N.C. Fox is a former OFCCP policy official.

He said both Clinton and Trump have in the past supported affirmative action and nondiscrimination, but neither candidate has expressed an opinion on the OFCCP. He added that it’s “worrisome” that both the Democratic and Republican platforms are silent on affirmative action and nondiscrimination, which had been present in past platforms.

Regardless, Fox said “big changes are coming” to the OFCCP in both structure and focus whether the new president is Clinton or Trump.

Potential OFCCP Changes

For example, Fox said he believes there will be continued consideration of creating six specialized regional centers for the OFCCP with “no or few district offices.” The OFCCP currently has 49 district and area offices, and six regional offices.

In its fiscal year 2017 budget justification document, the OFCCP discussed plans to establish two “Skilled Regional Centers,” one in San Francisco and one in New York.

The centers would have “highly skilled and specialized compliance officers capable of handling various large, complex compliance evaluations in specific industries, such as financial services or information technology,” the budget documents said.

Additionally, Fox said, there may be a movement to transfer the OFCCP to the Equal Employment Opportunity Commission, where it would operate as the EEOC’s “systemic discrimination arm.”

However, he said, he expects such a movement “should fail.”

Fox also said he expects the OFCCP’s number of audits to “nearly double,” with its compensation discrimination evaluations “morphing” into investigations into discriminatory job steering, promotions and job training.

Construction Proposed Rule ‘Probably Dead.’

The final item on the OFCCP’s current regulatory agenda is a proposed rule to update affirmative action requirements for federal and federally assisted construction contractors and subcontractors.

According to the DOL’s spring 2016 semiannual regulatory agenda, which was released in May, that proposal is expected this month.

The OFCCP’s existing construction contractor regulations under Executive Order 11,246 rely on census data from the 1970s in setting hiring goals for women and minorities. Efforts to update the rule have been in the works at the OFCCP since at least 2009.

The proposed rule wasn’t mentioned in the OFCCP’s FY 17 budget justification, leading to speculation that the agency wouldn’t issue the proposed rule, which the DOL denied.

Fox repeated that speculation and said the construction contractor proposed rule is “probably dead” at this point.

He said the OFCCP would have less than five months to finalize that rule, which has yet to be proposed, before a new president takes office.

The new president potentially can stop any rules that haven’t been publicly published for 30 full days prior to the inauguration, Fox said.

This means that the OFCCP would have to publish its last final rules on or before Dec. 21 so the rules would have the necessary 30 days to become “legally effective” before the new president is instated, he said.

After Election

Fox said he believes current OFCCP Director Patricia A. Shiu, a political appointee, will stay to the end of Obama’s term on Jan. 20.

Shiu’s “long legacy” at the OFCCP over the past seven years includes “the most prolific regulatory change” in the agency’s history, an emphasis on quality control for audits, and a continued focus on specialization, such as on statistical analysis, Fox said.

On Nov. 9, he said, the president-elect’s transition team will enter the Labor Department and “become a shadow government.” The team will figuratively “stand behind” Shiu’s desk and either “try to influence her decisions or do nothing.”

“Pat doesn’t have to yield to the transition team,” Fox said.

If Trump wins, the transition potentially could be rocky, he said. Although it may be smoother if Clinton wins, Fox added that “it’s always a tug-of-war even among friends.”

After Inauguration

Phase II of the transition begins after the Jan. 20 inauguration, Fox said, with a career OFCCP official serving as an interim acting director pending the arrival of the new OFCCP director.

The interim director “will be under the thumb of the transition team,” he said.

Phase III, he said, will begin some time in 2017 after a new Labor Secretary is confirmed by the Senate and the new OFCCP director is appointed.

Fox said the typical time period for Phase III is five months, but he observed that Obama didn’t have his sub-cabinet appointments lined up quickly in 2009. For example, he said, Shiu was announced as OFCCP’s director in August of that year and didn’t assume the position until October.

To contact the reporter on this story: Jay-Anne B. Casuga in Charlotte, N.C., at jcasuga@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

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