OFCCP recently published their budget request for FY 2012 which outlines their goals for the coming year as well as the funding they want to reach those goals. The proposed budget of $109,010,000 represents a $3.6 million increase over the requested budget for FY 2011. It also provides for the hiring of an additional 13 full-time employees.
OFCCP has made it clear that eliminating compensation discrimination will be a major priority in FY 2010. With the proposed rescission of their former compensation guidelines and a new compensation data collection tool in the works, this should come as no surprise to the Federal contracting community.
What is notable is that OFCCP is planning to increase the scope of their compensation focus. $3.5 million and 11 employees will be allocated towards their new initiative to identify workers misclassified as independent contractors. This is part of a larger initiative within the Department of Labor that will cost $46 million. Citing this as an issue in several compliance evaluations, OFCCP states that “Federal contractors who are seeking to skirt the requirements of E.O. 11246 may misclassify their employees as [independent] contractors in order to make the composition of their workforce appear more diverse or to mask discriminatory employment practices.” OFCCP will develop their investigation process for this misclassification issue during FY 2012 and use the fourth quarter to “establish a baseline measurement of the impact of this initiative.”
The budget request also gives some hints on what the new compensation collection data tool may look like:
“OFCCP plans to develop and implement a web-based compensation data collection tool that would enable the agency to identify indicators of pay disparity among federal contractors.”
Additional details indicate that the tool would collect compensation data from 70,000-110,000 contractors and would likely array the data by job group. OFCCP is also envisioning more technological improvements at the agency including a “secure compliant web portal” where AAP data would be collected from Federal contractors.
Fiscal Year 2010 OFCCP Enforcement Results
In FY 2010, OFCCP completed 4,960 compliance evaluations; up from 4,000 in FY 2009 and representing the most compliance evaluations since FY 2004. A 32% increase in the number of audits ending in conciliation agreements brought the total to 919 compared to 694 in FY 2009. The amount of financial recoveries rose from around $9M to $9.75M, even though the number of workers recompensed dropped from 21,839 in FY 2009 to 12,397 in FY 2010.
The estimated number of compliance evaluations for FY 2011 is lower at 3,500, but is targeted to increase to 3,675 in FY 2012. OFCCP says that this decrease is “critical to implementing the fundamental changes to OFCCP’s new, comprehensive and multi-faceted enforcement strategy.” Read: fewer, more in-depth compliance evaluations with more on-site visits. The recently released Active Case Enforcement directive will govern this strategy.
Functional AAPs are Coming Back
A recent webchat regarding the 2012 budget revealed that a revamped functional AAP unit is in the works. OFCCP Director Patricia Shiu indicated that a new directive is forthcoming that will outline a new process for contractors to request approval for functional AAPs and by which they will be evaluated for compliance.
To view the budget request visit: http://www.dol.gov/dol/budget/2012/PDF/CBJ-2012-V2-04.pdf