OFCCP Issues New Directives and Announces that Focused Reviews are Coming in FY 2019

August 27, 2018

The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has issued new directives, announcing a plan to implement focused reviews in fiscal year 2019 of federal contractors’ compliance with Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA). The 2019 fiscal year begins on October 1, 2018. While the specifics of OFCCP’s focused review plan are still being worked out, the directive indicates that OFCCP would come onsite and conduct a comprehensive review of a contractor’s compliance with the specific area of the focused review. While focused reviews are not new, this plan signals OFCCP’s continued commitment to ensure that those entities doing business with the federal government are meeting their affirmative action and equal employment obligations. In light of focused reviews on the horizon, we recommend all employers that are or might think they are federal contractors contact SESCO to ensure compliance with OFCCP regulations.

Review Of Compliance With Anti-discrimination Laws

The Directive provides that, as part of a comprehensive workplace initiative, the OFCCP will add “focused reviews” to its scheduling list of compliance reviews starting in fiscal year 2019. The comprehensive, on-site reviews will focus on laws that prohibit federal contractors and subcontractors from discriminating against employees on the basis of race, color, religion, sex, sexual orientation, gender identity, national origin, and status as a qualified individual with a disability or protected veteran. In addition to prohibiting discrimination, these laws require contractors and subcontractors to take affirmative steps to ensure equal opportunity in employment. Executive Order 13665, issued by President Barrack Obama under the authority of Executive Order 11246, also protects applicants and employees who inquire about, discuss, or disclose their compensation or that of others, subject to certain limitations.

As a result of the Directive, OFCCP staff is directed to establish a standard protocol for these focused reviews. The review will focus solely on Executive Order 11246, Section 503, or VEVRA compliance. The compliance officer will review contractor policies and practices relating to the particular law chosen for the review and interview responsible managers and affected employees. The compliance officer will also evaluate hiring and compensation data and the handling of accommodation requests.

Interestingly, as part of the Directive’s description of an example Section 503 focused review, it states "OFCCP would also seek to evaluate hiring and compensation data" in addition to its evaluation of accommodation practices to ensure individuals with disabilities are not being discriminated against in employment. The Directive notes similar approaches will be used to evaluate compliance with VEVRAA and Executive Order 11246.

Protection For Organizations In The Practice Of Religion

The Directive requires OFCCP personnel to take into account recent U.S. Supreme Court decisions and executive orders that have addressed the broad freedoms and anti-discrimination protections that must be afforded to religion-exercising organizations and individuals.

Both the U.S. Supreme Court and President Donald Trump have acted in recent years to protect the religious freedom of business owners and organizations. The Supreme Court has ruled that the government violates the Free Exercise Clause when its decisions are based on hostility to religion or a religious viewpointand when it conditions a generally available public benefit on an entity’s giving up its religious character, unless that condition withstands the strictest scrutiny.

President Trump's recent executive orders declare that the executive branch wants faith-based and community organizations to compete on a level playing field for grants, contracts, programs and other federal opportunities. Quoting key language from the Court’s decisions and the executive orders, the OFCCP directive instructs staff to bear in mind that:

  • They “cannot act in a manner that passes judgment upon or presupposes the illegitimacy of religious beliefs and practices” and must “proceed in a manner neutral toward and tolerant of ... religious beliefs;”
  • They cannot “condition the availability of [opportunities] upon a recipient’s willingness to surrender his [or her] religiously impelled status;”
  • “A federal regulation’s restriction on the activities of a for-profit closely held corporation must comply with [the Religious Freedom Restoration Act];”
  • They must permit “faith-based and community organizations, to the fullest opportunity permitted by law, to compete on a level playing field for ... [Federal] contracts;” and
  • They must respect the right of “religious people and institutions ... to practice their faith without fear of discrimination or retaliation by the Federal Government.”