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May 6, 2013
How to prepare for an OFCCP audit
Candee J Chambers, SPHR, CAAP
Mgr, AAP/EEO Compliance
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2
Background
“For nearly 40 years, the rules have said that
contractors simply need to make a ‘good faith’ effort to
recruit and hire people with disabilities. Clearly, that’s
not working.” - OFCCP Director Patricia Shiu
“Sea change” in OFCCP’s enforcement.
- OFCCP Director Patricia Shiu
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3
OFCCP Regulatory Agenda
Regulation
Status Date Expected
(my best guess)
Systemic Compensation
Standards
Rescinded 2/2013
Directive 307 Issued 2/2013
Protected Veterans Final Rule Fall, 2013
Individuals with
Disabilities
Final Rule 2014 or later
Compensation Data
Collection Tool
NPRM 2014 or later
Sex Discrimination
Guidelines
NPRM Fall, 2013 or 2014
Construction Contractor
Regulations
NPRM Fall, 2013
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4
New political appointments
Sylvia Mathews Burwell confirmed as director of Office
of Management and Budget
Prior president of Walmart Foundation
Served as OMB deputy director in Clinton administration
Prior OMB presided over three budget surpluses in a row
Focus is on budget first
Tom Perez nominated as new DOL Secretary
Republicans threaten to block
Senate HELP Committee vote pushed back until May 8
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are trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.
5
What does all this mean for federal contractors?
CSALs recently issued
How many will turn into actual audits?
Will sequestration have any impact?
Pre-notification of potential OFCCP audits
OFCCP is giving you a heads-up
Use this time effectively
How do you prepare?
Internal audits
Assume you received an actual audit letter
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are trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.
6
Preparing for an OFCCP audit
Use the CSAL as it is intended
Run updated pay equity analyses
Look at employees in job group and job title groupings
Continue to use 2% or $2,000 disparity analysis
Ensure required posters are displayed in the facilities
Outreach, outreach, outreach
Veterans - Females
People with Disabilities - Minorities
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are trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.
7
Preparing for an OFCCP audit
Review all of your Direct Compliance reports, by
month, for each location that received a CSAL
Contact the individuals that receive the job postings
and build relationships with them
Remember, OFCCP will contact them too
What will they tell the Compliance Officer?
Review your Direct Traffic reports and analyze your
traffic flow
Know how to get copies of job postings too
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are trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.
8
Direct Compliance report
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are trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.
9
Direct Traffic report
DOL site in partnership with Direct Employers
State Job Bank
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are trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.
10
VETcentral Job Posting Example
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11
Outreach, outreach, outreach
VERY IMPORTANT!!!
Expand your outreach efforts and focus on
veterans and people with disabilities
Company webpage updates with particular focus on
veterans and people with disabilities
Career Fairs focusing on veterans or people with
disabilities
Company Tours you have sponsored
Meet and Greet/Open House events
Wounded Warriors and Rehabilitation Services events
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12
Outreach, outreach, outreach
Good faith efforts aren’t enough anymore
Keep track of all outreach – VERY IMPORTANT
Relationships already built
Activities/events in which you have participated
Contacts made (or attempted) but not confirmed
Last, but not least:
Measure the effectiveness of your efforts
If your efforts aren’t getting results, try something else
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are trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.
13
Outreach tracking tool example
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are trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.
14
OFCCP audit process
What are the most important things contractors can do
to ensure a successful outcome?
Build a positive relationship with the CO
Try to find something you might have in common
Mention affiliation with an Industry Liaison Group
Be pleasant in all discussions with the CO
Notify everyone with a ‘need to know’ that an audit
is underway – including Direct Employers!
Send AAP within the 30-day time period
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15
OFCCP audit process
Be clear on all the regulations and/or recent initiatives
Many COs are new and use checklists to know what to
ask for
Some COs do not know the regulations and may
request something they do not have the authority to
request
If this happens, reach out to those who can help if
you continue having trouble
Your AAP vendor
Direct Employers
NASWA
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16
OFCCP audit approach today
Recent OFCCP Experiences
Compliance Officers will call and ask questions about
compensation
Subjects discussed:
Contractor’s compensation practices
Factors that lead to compensation decisions and
classifications
What the contractor considers total compensation (e.g.
overtime, commissions, etc.)
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17
OFCCP audit approach today
Contractor will receive a follow-up letter from the
auditor requesting the submission of additional data
discussed during the call(s)
Message here:
Be VERY careful what you tell a Compliance Officer over the
phone
They are taking notes of what you are saying
They can change their request based on what you tell them
Only give them what they ask for – nothing more!!!
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OFCCP requests for additional information
Items currently being requested (which might create difficulties for
you in pulling this information):
Years of relevant experience – what does relevant mean?
Highest degree attained – for the job or in general?
Year in which highest degree attained
Market reference system used for the different salaries
What does this mean?
Start pulling this information now
Most of this information does not exist in your HRIS
OFCCP does not like delays
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Pay equity analyses
** Always use Attorney-Client Privilege **
Here’s the reason why:
“In addition, we are requesting any internal compensation
audits you have performed as stated in CFR 60-2.17 (b) (3)
and a list of all individuals involved in the compensation
process”
“Furthermore, please provide any additional information that
you feel may better explain your company’s compensation
system including other factors that influence compensation”
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20
Best practices
CEO and leadership support
Annual Management meetings
Accountability
Safeguarding Data Integrity
Awareness of changes in HRIS
Employment Actions Match HRIS
Frequent Monitoring of Employment Decisions & Follow Up
Hands-On Relationships with Community Organizations
Unbiased Internal Assessment (Mock Audit)
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21
Final thoughts…
Bottom Line:
The culture today with the OFCCP is more of a ‘we vs. them’
approach
They have an expectation that they will find discrimination in
one form or another in each audit
Audits can extend for an unlimited period of time so the CO
can revisit areas already discussed and agreed upon
OFCCP is now acting as a true enforcement agency
Contractors need to build relationships with their CO’s
Remember, everyone should all have the same goal:
Proving that companies are not discriminating!
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22
Q&A
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23
Thank you!