Q&A: Contractor Watchdog May Hit Refresh Button on Audits

OFCCP 2018

With a new leader taking the helm at the Labor Department’s Office of Federal Contract Compliance Programs in 2018, this could be the year federal contractors see some fundamental shifts in the agency’s approach to enforcing nondiscrimination and affirmative action requirements.

The OFCCP “may adopt new processes for analyzing compensation and be more willing both to be more transparent about its processes and to take a more realistic approach to identifying real discrimination rather than mere statistical anomalies,” Clare Draper, a partner at Alston & Bird, told Bloomberg Law. He was responding to emailed questions on OFCCP enforcement and compliance. Below is an edited version of the responses he supplied.

BLAW: What will you keep an eye on when it comes to the OFCCP in 2018? 

Draper: In general, while we are likely to see audit activity similar to what we saw in 2017 with fewer, but longer and deeper, audits than in most past years, we can look forward to a more collaborative OFCCP with more emphasis on training compliance officers and working with contractors to achieve compliance. In 2018, the agency will have a new director in Ondray Harris.  

While Harris has not provided much insight into his plans, and the OFCCP has not announced any regulatory initiatives, we can glean some insights from other sources. Secretary of Labor Alexander Acosta stated in written testimony to the House of Representatives in November that the OFCCP would work to build trust and transparency, to improve communication with the contractor community, and to provide consistent training for federal contractors and OFCCP staff.  

Contractors also should be aware that the OFCCP is operating with a depleted staff, having shed more than 200 employees over the past six years and undertaken two rounds of voluntary departure incentives since August. The reduced staff could mean longer audits, fewer on-sites, fewer audits overall, and even the closure of some OFCCP offices. It also could promote expedited closing of audits that indicate no significant issues on the initial review in order to focus resources where potential violations are found up front. 

The OFCCP has indicated that it plans to establish “skilled regional centers” in San Francisco and New York to handle complex audits of contractors in selected industries (including information technology and financial services), which would take some of the work from other offices.

BLAW: In working with contractors in 2017, did you notice any new trends or tactics used by compliance officers during audits that may continue in 2018? 

Draper: During 2017, the OFCCP continued under the leadership of acting director Tom Dowd, the deputy director during the Obama administration, and the policies and directives established during the Obama administration didn’t change. 

Dowd, however, did indicate that the OFCCP would be more collaborative moving forward, and some contractors saw compliance reviews without clear potential violations close more quickly in the latter part of the year. In the field, the OFCCP continued to focus on hiring and compensation and to make repeated requests for detailed statistical data. We also saw more telephone interviews, generally relating to compensation systems and hiring processes, and we expect that to continue.  

BLAW: Any final thoughts? 

Draper: We’ll be looking to see if the OFCCP’s focus on training, transparency, consistency, and collaboration takes a different shape in 2018.  Contractors should be prepared to request transparency and collaboration in compliance reviews, particularly when the OFCCP requests detailed data without apparent justification. We may see a more reasonable and cooperative approach from the solicitor’s office as well Kate O’Scannlain, the solicitor of labor.   

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