Welcome to HudsonMann’s OFCCP video update for Q1 2018. While 2017 was a year of transition and uncertainty for OFCCP, things are starting to heat back up for the agency in 2018. Over the next few minutes, we’ll provide a quick review of what we’ve seen so far this year.
Up first are audits. As of March 19, OFCCP began scheduling 1000 new audits. Federal contractors should be on the lookout for certified mail from the Department of Labor. This surge in audit scheduling signals that OFCCP’s enforcement activity may be back on the rise. As in years past, these audit letters were preceded by Corporate Scheduling Announcement Letters, which gave advance notice of a potential audit. Due to this advance notice, OFCCP states they will not provide extensions due to routine business reasons – so keep an eye on your mailbox!
But what will these audits look like? Each new administration typically has a change of enforcement approach, but we don’t have any clear signals of that yet. Audits are still very in-depth and often lengthy. Pay equity remains in focus along with outreach for veterans and individuals with disabilities. Only time will tell what changes the new administration will make in enforcement strategies and focus areas.
Next there’s OFCCP’s budget roller-coaster. Under the last year of the Obama administration OFCCP had a budget of roughly $105 Million dollars. The first budget proposal under the Trump administration called for chopping that down to 88Million dollars and rolling the OFCCP into the EEOC. While the merger idea was effectively scrapped in 2017, the budget drama has continued. The next budget proposal had OFCCP at $91 dollars, but the budget omnibus passed in March gives the agency close to $104 million dollars – very close to Obama-era funding levels. How OFCCP will utilize this increased budget remains to be seen.
Meanwhile, on February 27, OFCCP published its first directive under Director Ondray T. Harris’ leadership. Directive 2018-01 moves OFCCP in the direction of more transparency and consistency across the agency. Basically, it requires that a predetermination letter, or PDN, be used in all cases where OFCCP believes they have proof of discrimination. The PDN gives employers 15 days to rebut OFCCP’s proposed findings before the agency can issue a Notice of Violation. Prior to this directive each regional office could use their own discretion on whether they would issue a PDN prior to sending a Notice of Violation.
Lastly, OFCCP has updated the Veteran’s hiring benchmark for 2018. Effective March 31, the new benchmark will be 6.4%. This is down from the previous 6.7% and marks the 4th consecutive reduction since 2014. AAP’s beginning on March 31 of 2018 or later should adopt this benchmark.
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