The document provides an overview of strategies for preparing for and responding to an audit by the Office of Federal Contract Compliance Programs (OFCCP). It discusses OFCCP updates including greater focus on individual discrimination cases and compensation matters. It emphasizes developing accurate applicant tracking and compensation data. When an audit is scheduled, the key is to submit only requested documents and communicate effectively with the OFCCP. Internal preparation includes reviewing policies and data for issues and preparing employees for potential interviews. The goal is presenting information professionally to facilitate a favorable determination.

1. STAYING AFLOAT
What to do When the
Audit Waves Come Crashing?

2. AGENDA
• Office of Federal Contract Compliance
Programs (OFCCP) Updates
• Developing Quality Data
• Analyzing and Presenting Data
• Communicating with the OFCCP
• Preparing for an On-site Visit

3. OFCCP UPDATES

4. MISSION OF THE OFCCP
The OFCCP supports four new Department of
Labor (DOL) outcome goals:
• Breaking down barriers to fair and diverse
workplaces so every worker’s contribution
is respected
• Narrowing wage and income inequality
• Helping workers find a path into middle
class jobs
• Serve as a voice in the workplace

5. RELATIONSHIP WITH THE EEOC
Both agencies have similar missions: identify
organizations that might be discriminating, and take
action to remedy the situation
• The OFCCP is now looking at individual cases
of discrimination
• The EEOC is now looking at systemic cases of
discrimination
• In the event of an audit, the OFCCP is asking to
see all prior and current EEOC complaints

6. WHAT THIS MEANS FOR YOU
Expect greater focus on:
• Individual cases of discrimination in all
personnel actions, particularly hiring and
failure to promote
• Compensation related matters
• Outreach and recruitment of individuals
with disabilities
• Outreach and recruitment of Veterans

7. FISCAL UPDATE
• The OFCCP’s proposed Fiscal Year (FY) 2012
budget reflects a $3.6 million increase from
FY 2010
• The FY 2012 budget includes 786 full-time
employees based on an aggressive
enforcement plan
• The FY 2012 budget will be used to implement
the “Plan, Prevent, and Protect” initiative of the
OFCCP

8. FISCAL UPDATE cont’d
• OFCCP budget provision
• In FY 2010 financial settlements totaled
$9,750,272 in back pay for 12,937 workers.
• In the first six months of FY 2011, the OFCCP
had 44 financial conciliation agreements that
include $5.66M and 657 job offers for 8,090
victims

9. ACTIVE CASE ENFORCEMENT (ACE)
• Effective January 1, 2011, all Supply and
Service (S&S) compliance evaluations
scheduled from the Federal Contract
Scheduling System (FCSS) are being
processed under ACE procedures
• The ACE procedures now take precedence

10. ACTIVE CASE ENFORCEMENT (ACE)
• The OFCCP will use the FCSS to select all S&S
for compliance evaluations
• Identified establishments will be placed on a
computer generated list developed by the
National Office
 The Regional/District/Area Offices are
required to follow the list in sequential order

11. ACE COMPLIANCE REVIEW
• Coinciding with the mailing of the scheduling
letter, the OFCCP will contact the EEOC and
the State or Local Fair Employment Practice
agency to determine the nature, status, and
outcome of any complaints that have been filed
• The Compliance Officer (CO) will conduct a full
desk audit in every compliance review

12. ACE COMPLIANCE REVIEW cont’d
• Contractor’s compliance history
• A determination will be made on whether an
on-site review is needed

13. ACE COMPLIANCE REVIEW cont’d
• On-site review
• Minor technical violations with no indicators of
potential discrimination should be remedied at
this stage
• If there are no issues the CO will issue a
Closure for No Apparent Violations or Technical
Violations

14. ACE COMPLIANCE REVIEW cont’d
• Closure letter
• Show cause letter

15. WHAT THIS MEANS FOR YOU
• Potential for greater audit activity
• Coordination between OFCCP and other
agencies such as EEOC
• Greater focus on technical compliance with
affirmative action regulations including applicant
compliance, recordkeeping, and monitoring
• Outreach and recruitment of individuals with
disabilities and Veterans

16. OFCCP COMPENSATION
• The OFCCP submitted its ANPRM for “Non
Discrimination in Compensation: Compensation
Data Collection Tool” to the OMB’s Office of
Information and Regulatory Affairs (OIRA) on
February 18, 2011
• It is in the final stages of review and the OFCCP
expects to publish it within the next few weeks

17. OFCCP COMPENSATION cont’d
• Web-based OFCCP compensation data
collection tool
• The OFCCP is creating a web-based
searchable database comprised of aggregated
data from 70,000 to 110,000 contractors

18. OFCCP COMPENSATION cont’d
• The OFCCP is looking at other personnel action
data such as terminations and promotions by
job group and demographic category, and
whether data on Veteran status and disability
would be included

19. THE NEW “THRESHOLD TEST”
• Item 11 Current: Submission of total number of
employees and total compensation by race and
gender aggregated by job group, grade, or job
title
• In 2010, a new OFCCP internal directive for
COs guidance on reviewing Item 11 was
released

20. VETERANS & PERSONS WITH
DISABILITIES
• The current trend is putting emphasis back on
Good Faith Efforts, but the focus now is on
Veterans and individuals with disabilities rather
than on minorities and females

21. VETERANS & PERSONS WITH
DISABILITIES cont’d
• Focus on outreach and results of efforts:
 Proof of posting to unemployment offices
and diversity websites
 Evaluate number of candidates from these
sources and the number of hires
 The OFCCP is determining methods to
statistically evaluate Veterans similar to
minorities and females

22. EMPLOYMENT OF VETERANS
In an effort to monitor and enforce the employment
of Veterans, the OFCCP has asked the following
during an audit:
• Names of employees who have identified
themselves as individuals with a disability,
special disabled Veterans, and/or Veterans of
the Vietnam Era.

23. EMPLOYMENT OF VETERANS cont’d
• How many current employees identified as
disabled and/or Veteran
• Copies of jobs posted to state delivery service
• Evidence of outreach for recruitment
• Review of physical and mental job requirements
• Do application forms request information on
medical conditions or type of military
discharge?

24. EMPLOYMENT OF INDIVIDUALS
WITH A DISABILITY
• Copy of the maternity leave policy
• Review of physical and mental job requirements
• Reasonable accommodation lists
• List of applicants denied employment due to
physical exam, along with copies of exams
• Number of current employees identified as
disabled
• Evidence of outreach and recruitment for
disabled

25. VETERANS NPRM
• Significant analysis and recordkeeping
obligations
• Self-identification of applicants as “protected
Veterans”
• Analysis of recruitment and placement actions
• Numerical targets to measure the effectiveness
of affirmative action efforts
• Establishment of annual hiring benchmarks
• Final Rule anticipated in the spring of 2012

26. SECTION 503 NPRM
• Under review at OMB
• Publication in the Federal Register is due
sometime next month (August 2011)
• The OFCCP has declined to comment on
the specifics of the NPRM

27. The Facts Behind a Successful Audit
DATA IN REVIEW

28. AUDITS: POTENTIAL RISK
• You are subject to audits of your…
 Affirmative action plan
 Hiring, termination, promotion, and
compensation practices
 Good faith efforts
 Reasonable accommodations
• Enforcement could end in debarment,
conciliation agreement, financial remedies,
and bad press

29. THE KEY TO ACCURATE DATA
• Check all effective dates
• Make sure internal applicants are in the
applicant data
• Terminated employees must be removed
from the roster
• Census codes should be reasonable
• Availability weightings are appropriate
• Job groups need to be created accurately

30. THE KEY TO ACCURATE DATA cont’d
• Compensation data should be reported
consistently
• Confirm consistency of employee records
• Geographic recruitment areas must be
reflective of recruitment base
• Review incumbents versus actual number
of employment actions
• Annotated employees should be accounted
for across plans

31. THE AUDITOR’S POINT OF VIEW
• Ensure data is complete and accurate
• Review the submission package against the
scheduling letter
• Resolve any obvious issues
• Review all results including compensation
• Review the narrative
• Overall technical compliance

32. APPLICANT DATA TRACKING
• Develop your organization’s policy for
expressing interest in a position
• Review and update job descriptions for basic
objective qualifications
• Develop and implement an applicant tracking
system
• Conduct seminars and briefings to educate
stakeholders on the definition of an applicant
• Evaluate employment tests

33. STRATEGIES TO LIMIT LIABILITY
• Evaluate your organization’s applicant process
• Watch out for hires that cross time periods
• Be aware of hires versus promotions or
transfers:
 How are you accounting for internal hires?

34. STRATEGIES TO LIMIT LIABILITY
cont’d
• Make sure the number of hired applicants and
new hires match, and vice versa
• The contractor has sole responsibility for
applicant tracking
 Produce records for themselves as well as
those of the search firm

35. What to Submit to the OFCCP
THE SUBMISSION PACKET

36. THE AUDIT LETTER ARRIVES
• Immediately contact: your CEO, HR
representative, consultant (if applicable),
and legal counsel
• Seek confirmation regarding who will initiate
and maintain primary contact with the auditor
identified in the audit letter
• Send a letter confirming acknowledgment of
the audit to the auditor

37. THE AUDIT LETTER ARRIVES cont’d
• Begin keeping records of all correspondence
with the DOL: phone calls, emails, and letters
• If you are a multi-site institution, confirm in
your first contact which site(s) are subject to
the audit
• Evaluate the documents to be submitted:
 Run Adverse Impact Analysis
 Compensation Review
 Review AAP results

38. THE AUDIT LETTER ARRIVES cont’d
• Submit only the documents in the scheduling
letter
• Conduct a mock audit of your physical site
and records

39. THE CURRENT SCHEDULING
LETTER
• Departmental Profile • Placement Goals
• Job Group Analysis • Goal Attainment
• Availability Analysis • Transaction
Summaries
• Comparison of
Incumbency vs.
Estimated Availability

40. THE CURRENT SCHEDULING
LETTER cont’d
• Minorities and Females Narrative
• Individuals with Disabilities and Veterans
Narrative
• Past three years of EEO-1 Reports
• Compensation Analysis
• Collective Bargaining Agreement (if applicable)

41. THE PROPOSED SCHEDULING
LETTER
The OFCCP’s proposed changes to the Scheduling
letter would require contractors to submit the
following:
• Copies of all employment leave policies,
including leave under the Family and
Medical Leave Act, maternity leave,
and religious accommodations

42. THE PROPOSED SCHEDULING
LETTER cont’d
• Collective bargaining agreements including
“any other documents you prepared such as
policy statements, employee notices or
handbooks, etc. that implement, explain, or
elaborate on the provisions of the collective
bargaining agreement”

43. THE PROPOSED SCHEDULING
LETTER cont’d
• For all employment activity (applicants, hires,
promotions, and terminations) detailed data by
job group and by job title is required with the
minority information broken out into specific
racial categories
• Copies of accommodation policies and records
of accommodations granted to individuals with
disabilities and covered Veterans

44. THE PROPOSED SCHEDULING
LETTER cont’d
• Compensation data would be as of February 1,
not the AAP date, and would list the following
for each employee:
 Gender
 Race/ethnicity
 Hire date
 Job title

45. THE PROPOSED SCHEDULING
LETTER cont’d
 EEO-1 category and job group
 Compensation: “base salary, wage
rate, and hours worked,” and
requires that “other compensation or
adjustments to salary such as
bonuses, incentives, commissions,
merit increases, locality pay, or
overtime” be listed separately

46. How to Maximize your Possibility of a Favorable Outcome
ANALYZING & PRESENTING
DATA

47. OFCCP RED FLAGS
• Statistically significant adverse impact
• Lack of good faith efforts
• Failure to keep records
• Lack of monitoring of personnel actions
and compensation
• Failure to follow company policies
• Technical issues with AAP

48. How to Effectively Communicate with the OFCCP Before, During,
and After an On-site Audit
EFFECTIVE PARTNERSHIPS

49. OFCCP PARTNERSHIPS
• Participate in industry liaison groups
• Establish one point of contact
• Keep a positive business oriented approach
• Respond within a timely manner
• Ask for all additional requests to be placed in
writing and maintain records of requests
• Be prepared for all questions—review your data
first and take corrective action

50. How to Prepare Your Company for an On-site Audit
INTERNAL COMMUNICATION

51. PREPARING FOR AN ON-SITE
• Confirm a date for the on-site only after you
are assured the president will be available for
an initial required meeting with the auditor
• Read the affirmative action regulations
• Get to know your compliance officer(s)
• Don’t admit violations without professional
advice; use legal counsel and other experts
as needed

52. PREPARING FOR AN ON-SITE cont’d
• As soon as an on-site date is confirmed, notify
your key administrators:
 Explain the why, what, and how of an
on-site.
 Seek assurance of full cooperation,
including access to any personnel or
paperwork the auditor may request
while on campus

53. PREPARING FOR AN ON-SITE cont’d
• Determine location of auditor’s work area and
key contact person—communicate strategy
for creating “ghost” file of documents copied
or the CO
 Confirm with your IT staff access to
the internet
 Identify a location close to your office
and HR department
 Identify rooms in which interviews with
employees can be conducted

54. PREPARING FOR AN ON-SITE cont’d
• Complete final review of plans
• Review and summarize pending EEO and other
formal complaints
• Review personnel files, applications, résumés,
employment ads, position descriptions, and
policy manuals for compliance
• Review salary structure and factors affecting
pay—perform salary research and complete a
written report explaining differences in pay

55. PREPARING FOR AN ON-SITE cont’d
• Plan a tour of the facility to identify visible
strengths and potential issues
• Check your VETS-100/VETS-100A form
• Review I-9 forms—the OFCCP no longer
reviews onsite
• Follow up on any outstanding requests the
auditor makes for additional materials

56. PREPARING FOR AN ON-SITE cont’d
• Prepare for interviews
 Management—company representative
allowed
 Employees—company representative at
discretion of employee
• Immediately summarize, with help of legal
counsel, any areas of concern that may have
emerged in conversation with the auditor(s)

57. PREPARING FOR AN ON-SITE cont’d
• The determination letter may arrive
approximately one month from the last day
of the on-site, but not guaranteed
• Be prepared for possible findings of violations
• Seek clarification through legal counsel office
• Remember—you have the power to negotiate

58. SESSION RECAP
• OFCCP Updates
• Developing Quality Data
• Analyzing and Presenting Data
• Communicating with the OFCCP
• Preparing the Company for an On-site

59. Questions?
THANK YOU