11-01-2017
By Terri Swain
As we near the end of 2017, we look back on changes in both the Equal Employment Opportunity Commission (EEOC) and Office of Federal Contract Compliance Program (OFCCP), and look ahead to the issues that employers should focus on in 2018. As a reminder, United States (U.S.) federal contractors and subcontractors must create an Affirmative Action Plan (AAP) as a condition of doing business with the U.S. government. Some organizations for internal, political or other reasons may choose to produce a voluntary AAP. Companies that meet certain contract and employment levels must prepare their AAP in accordance with U.S. federal regulations. At its core, an Affirmative Action Program is a management tool to ensure equal employment opportunity.
Impact of the Trump Administration
Nearly a year into the Trump administration, both the EEOC and the OFCCP remain with acting chairs. While awaiting chairs to be named for both civil rights agencies, their work continues. In the early days of the administration, there was early speculation that these two agencies might merge, it now appears that the agencies will remain separate. While both agencies are expecting decreases in their budgets, these decreases are not expected to be significant.
Recent News and Trends
The EEO-1 report due date has been moved from September 30 to March 31. Employers will report their employee data as of the last quarter of 2017. However, the pay component proposed under the Obama administration was stayed pending further review.1 EEO-1 reports will be filed as in previous years.
The veteran 4212 reporting deadline of September 30 was extended to November 15 of this year due to the number of natural disasters occurring in the U.S. and its territories.
Technology and financial sector employers are a focus of OFCCP audits, with much of that work concentrated in the California and New York offices. University and higher education audits also appear to be on the rise.
There are three emphasis areas during OFCCP audits that are expected to continue under the Trump administration:
- Compensation equity has bipartisan support and many states are also developing reporting and reviews of compensation equity;
- Hiring cases, particularly entry level position screening - who is interviewed and who is screened out, and whether there is any kind of adverse impact – is a focus area. The largest money settlements are coming out of these reviews; and
- Steering cases, wherein someone applies for a certain position but is steered towards another lower paying or traditional job (particularly seen with females or members of a specific minority group), are also on the increase.
While the number of OFCCP audits conducted are significantly lower than those in previous years, the agency is diving deeper into hiring processes and pay practices. There is additional focus on agency efficiency and there are many proposals in the works concerning changes in how the OFCCP operates.
Employer Preparedness
In this period of uncertainty, employers should take the time to evaluate their current systems and processes. Human resources information and applicant tracking systems are critical, and making certain that data in these systems is clean - systems have all employee attributes including job title, race, gender, veteran status, disability status, EEO-1 code are properly assigned - will enable employers to accurately report what is needed for an OFCCP audit or government request.
If an employer is required to prepare an Affirmative Action Plan due to federal contractor/subcontractor status, it is important that the plan is completed on time and contains the required elements. There is speculation that the new administration might require employers to register or submit plans to the OFCCP.
Another area for review includes hiring processes. Employers should ensure that managers and supervisors are trained on appropriate and legal recruiting methods including what methods are being used to screen candidates out of the organization. Employers must pay particular attention to tests and background check policies that are non-job related and any other applicant screening methods that could be discriminatory.
Compensation equity reviews are a continued area of focus and can be very complex. These reviews should be conducted under attorney-client privilege. Developing a compensation philosophy that can be validated is an important element of an equity review. Simply using previous salary to determine starting salary can be a red flag to the OFCCP, and asking applicants about previous salary may violate some state regulations.
An audit can be an effective response to a specific compliance issue and is also an excellent tool to identify potential gaps in competencies and move an organization toward achieving best practices in key human resources practice areas.
Conclusion
Changes in both the EEOC and OFCCP will no doubt continue as the Trump administration’s influence on both agencies becomes more apparent. Employers must stay aware of these updates and comply as their circumstances require. EPS will monitor and provide updates as these topics continue to develop.