1. OFCCP Initiatives and New VEVRAA Regulations
February 11, 2014

2. OFCCP: Office of Federal Contract Compliance Programs
Arm of the Department of Labor
Charged with Enforcing Affirmative Action Obligations of Federal Contractors
Executive Order (“EO”) 11246
Section 503 of the Rehabilitation Act
Vietnam Veterans’
Readjustment Assistance
Act (“VEVRAA”)
Affirmative Action: recruit, hire and promote women, minorities, disabled and veterans

3. Who is covered? Federal Contract or Subcontract and
Meet Dollar Threshold
Contract of $10,000 or more (EEO Policy) OR
Contract of $50,000 or more + 50 employees (AAP Women and Minorities and Individuals with Disabilities) OR
Contract of $100,000 or more + 50 employees (AAP Veterans)
Federal Contract
Subcontract:

4. Notes on the dollar threshold
Watch out for Indefinite Quantity Contracts and Open-Ended Contracts
Aggregation
What about multiple contracts under the dollar threshold?

5. What is a federal contract?
The implementing regulations at 41 CFR define "Government Contract" as: any agreement or modification thereof between any federal contracting agency and any person for the purchase, sale or use of “personal property” or “nonpersonal services.”
Examples of nonpersonal services - Utilities, construction, transportation, research, insurance, and fund depository

6. What is a subcontract?
“Subcontract” is any agreement between the Prime Federal Contractor with a third party
to provide goods or services that are, in whole or in part, NECESSARY TO THE PERFORMANCE of the that Prime Federal Contractor’s government contract, OR
Under which any portion of the contractor's obligation under any one or more contracts is performed, undertaken or assumed.

7. Industry Coverage Issues
Financial Institutions
Federal fund depository?
FDIC or NCUA insurance?
Construction
No women and minority AAP

8. Industry Coverage Issues
Hospitals and Healthcare Providers
TRICARE?
Medicare?
Veterans Affairs, Department of Defense?
Federal Prison Contracts?
U.S. Office of Personnel Management, Federal Employee Health Benefits Program (FEHB)?
TRICARE – exempted in the National Defense Authorization Act in December 2011; unique legislation that the health care industry lobbied hard to get. OFCCP was not happy about this piece of legislation and has responded by targeting the health care industry
Medicare and Medicaid – NO, federal financial assistance, which is treated as a “grant” and is excluded

9. Industry Coverage Issues
UPMC Braddock, et al v. Seth D. Harris, Acting Secretary of Labor (D.D.C. 3/30/2013)
OPM
Contract to “offer medical products and services”
UPMC
UPMC Braddock v. Harris (3/30/2013) – The university lost for the third time. UPMC established an HMO, which contracts with OPM to provide “medical services and supplies” to federal employees through FEHB. The HMO then signed contracts with three of UPMC’s hospitals to provide “medical services and supplies”
HMO Contract to provide “medical products and services”
UPMC Braddock Hospital
UPMC Southside Hospital
UPMC McKeesport Hospital

10. What is an affirmative action plan?
The written AAP will include both:
Quantitative (data analysis); and
Qualitative (narrative) Components
Plan must be developed within 120 days of contract award and be updated annually
Unless selected for compliance review, the AAP is not submitted
Do not underestimate the length of time it takes to become compliant

11. New VEVRAA Regulations
Part

12. Regulation Structure Divided into 5 subparts (Subparts A-E):
Subpart A: Preliminary Matters
Definitions
Coverage
EEO Clause*
Subpart B: Discrimination Prohibited
Subpart C: Affirmative Action Program
Invitation to Self-Identify*
Required Contents of AAP*
Hiring Benchmark*

13. Regulation Structure
Subpart D: General Enforcement and Criminal Complaints
Compliance Evaluations
Enforcement Proceedings
Sanctions
Subpart E: Ancillary Matters
Recordkeeping*

14. Hot Regulation Sections
41 CFR (Equal Opportunity Clause)
41 CFR (Invitation to Self-Identify)
41 CFR (AAP 11 parts)
41 CFR (Hiring Benchmark)
41 CFR (Recordkeeping)

15. Language Changes Change 41 CFR 60-250 to 41 CFR 60-300
As of effective date, 41 CFR will be rescinded
Eventually VETS-100 report will also be suspended
New Term: Pre-JVA Veteran
Those veterans who were protected under 41 CFR (contractor with a contract of $25,000 or more entered into prior to December 1, 2003)
No reporting

16. Categories of Veterans
Pre-JVA Veterans (no reporting)
Disabled Veterans
Active Duty Wartime or Campaign Badge Veteran
previously “other protected veteran”
Armed Forces Service Medal Veteran
Recently Separate Veteran
last 3 years in active duty beginning on date of discharge

17. Equal Opportunity Clause
41 CFR
(contained in Subpart A)

18. Timing EEO Clause Requirements
March 24, 2014
No delayed compliance because not part of Subpart C

19. Job Listings 41 CFR 60-300.5(a)(2)
List openings with state/local employment service except:
Executive and senior management
Filled from within
Positions lasting 3 days or less
Information to the Employment Service Delivery System (ESDS):
Include in all listings to local service: “VEVRAA Federal Contractor” and desire for priority referral of protected veterans.
Identify official responsible for hiring and contact information (1-800# and sufficient)
Identify contact info for any outside job search companies (such as headhunters/recruiters, etc.)
Executive and senior management: 1) compensation $455 per week, 2) primary duty is management, 3) customarily and regularly directs 2 or more employees and 4) authority to hire and fire
Filled from within: no consideration to outside applicants

20. Job Listings 41 CFR 60-300.5(a)(2)
Listing must be given in “manner and format” of local Employment Service Delivery System (ESDS)
Big deal if you have lots of locations
Regulation gives express option to use third parties
Suggested tag line for print: “EEO Employer W/M/Vet/Disabled”
No listing requirement for independent contractors
Joint employer issue

21. Update Contract EEO Clause 41 CFR 60-300.5(d)
Can still incorporate by reference
Suggested Language:
[Company] is an Equal Employment Opportunity employer.  As such, the requirements of 41 CFR (a)(7), 41 CFR (a), 41 CFR (a) and 29 CFR Part 471, Appendix A to Subpart A are herein incorporated by reference, if applicable.
These numbers refer to clauses in Executive Order (41 CFR 60-1), Vietnam Veterans’ Readjustment Assistance Act (41 CFR ), Section 503 of the Rehabilitation Act of 1973 (41 CFR ), Executive Order (29 CFR Part 471, Appendix A to Subpart A). 
This contractor and subcontractor shall abide by the requirements of 41 CFR (a). This regulation prohibits discrimination against qualified protected veterans, and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified protected veterans.
This contractor and subcontractor shall abide by the requirements of 41 CFR (a). This regulation prohibits discrimination against qualified individuals with disabilities, and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified individuals with disabilities.

22. Posting of Rights for Protected Veterans 41 CFR 60-300.5(a)(9)
Conspicuous place (available to all applicants and employees)
If electronic application, must be available for electronic applicants
Form will be prescribed by OFCCP
May be electronic
Company intranet
Sent by
Must be accessible to disabled veterans
Braille or large print
Accessible from wheelchair

23. Notification to Labor Organizations 41 CFR 60-300.5(a)(10)
Need to inform labor organization that you are:
A federal contractor bound by the terms of VEVRAA
Committed to affirmative action to employment and advance in employment, and not discriminate against, protected veterans
Timing:
March 24, 2014 (technically)
Send once + anytime new CBA

24. Invitation to Self-Identify
41 CFR
(Contained in Subpart C)

25. Invitation to self-identify 41 CFR 60-300.42
Applicants
New Hires
Invite applicants to self-identify protected veteran status pre-job offer
Same time as employer invites applicants to self-identify race and gender
Invite new hires to self-identify protected veteran status
Ask if need reasonable accommodation
Same time as employer invites new hires to self-identify race and gender

26. Invitation to self-identify 41 CFR 60-300.42
Multiple File System
Employee Personnel File
Employee Medical File (ADA)
NEW: Confidential Self-ID File (“Data Analysis File”)
Unlike invitation to self-identify disability status (Section 503), may be combined into same form as women and minorities (E.O ).
Sample in Appendix B to regulations
Sample only, not required verbatim like Section 503 form

27. Invitation to self-identify 41 CFR 60-300.42
Required Elements
Federal contractor required to take affirmative action to employ and advance in employment protected veterans
Summarize relevant portions of act and contractor’s affirmative action program
Voluntary
Confidential
Refusal = no adverse action
Not used in manner inconsistent with VEVRAA

28. Affirmative Action Plan Parts
41 CFR
(contained in Subpart C)

29. Overview of Parts Old Regulations New Regulations
41 CFR (a) Policy Statement
Same
.44(b) Review of personnel processes
.44(c) Physical and mental qualifications
.44(d) Reasonable accommodation to physical and mental illness
.44(e) Harassment
.44(f) External dissemination of policy
.44(g) Internal dissemination of policy
.44(h) Audit and reporting systems
.44(i) Responsibility for Implementation
.44(j) Training
.44(k) Data Collection Analysis

30. EEO Policy Statement (.44(a))
New: Must indicate the top United States executive’s support for the contractor’s affirmative action program.
Top executive examples:
Chief Executive Officer OR
the President of the U.S. Division (if foreign company)

31. Review of Personnel Processes (.44(b))
Unchanged.
Contractors are required to periodically review their personnel processes to ensure protected veterans are afforded equal opportunity in the operation of these processes in hiring, promotions, and training.
Contractors must develop procedures to facilitate this review. Appendix C provides a set of sample procedures contractors have the option of implementing.

32. Physical and Mental Qualifications (.44(c))
Unchanged.
Contractors must provide and adhere to a schedule for the periodic review of all physical and mental job qualification standards.

33. Reasonable Accommodation (.44(d))
“If an employee who is known to be a disabled veteran is having significant difficulty performing his or her job and it is reasonable to conclude that the performance problem may be related to the known disability, the contractor shall confidentially notify the employee of the performance problem and inquire whether the problem is related to the employee’s disability; if the employee responds affirmatively, the contractor shall confidentially inquire whether the employee is in need of a reasonable accommodation”

34. Reasonable Accommodation (.44(d))
The Breakdown
Known to be disabled AND
Having significant difficulty performing job AND
Reasonable to conclude due to disability
Contractor must:
Confidentially notify of performance problem
Inquire whether related to disability
If so, ask if needs a reasonably accommodation

35. Anti-Harassment Procedures (.44(e))
Unchanged.
Contractors are required to develop and implement anti-harassment procedures.

36. Outreach (.44(f))
New: Mandated written notification to subcontractors/vendors of company policy regarding affirmative action efforts
Old: “should”

37. Outreach (.44(f)) Examples of outreach and recruitment activities:
Local Veterans’ Employment Representative
Department of Veterans Affairs Regional Office
Veterans’ Counselors and Coordinators (“Vet-Reps”) on college campuses
Service Officers for national veterans’ groups
Local veterans’ groups and veterans’ service centers
Department of Defense Transition Assistance Program (TAP)
Organization listed in the Employer Resources section of the National Resource Directory (

38. OFCCP resources

39. OFCCP Resources

40. Outreach (.44(f)): Effectiveness Evaluation
Must, on annual basis, review external outreach and recruitment efforts during previous 12-month period
Written self-assessment
“Each effort”
Use “data analysis” for current year and 2 previous years (keep records for three years)

41. Sample Table Analyzing Outreach (from OFCCP)

42. Internal Dissemination of Policy (.44(g))
Contractors are required to incorporate its Affirmative Action policy in its policy manual, or make it otherwise available to employees.
Contractors who are parties to Collective Bargaining Agreements (CBAs) must notify union officials of the Affirmative Action policy and request their cooperation.

43. Audit and Reporting System (.44(h))
Contractors must design and implement a self-audit and reporting system to:
Measure the effectiveness of the contractor’s AAP;
Indicate any need for remedial action;
Determine the degree to which the contractor’s objectives have been attained;
Determine whether known protected veterans have had opportunity to participate in all company sponsored educational, training, recreational, and social activities; and
Measure the contractor’s compliance with the AAP’s specific obligations.
Contractors must document all actions taken to comply with audit and reporting requirements and retain such as employment records.

44. Sample Self-Audit Table (from OFCCP)

45. Sample Audit Personnel Activity (from OFCCP)

46. Responsibility for Implementation (.44(i))
Unchanged.
Contractors are required to designate an official responsible for implementation of the AAP.

47. Training (.44(j)) Unchanged.
Contractors must provide EEO and AA training for employees involved in personnel processes.

48. Data Collection Analysis (.44(k))
Contractors are required to document:
The number of applicants who self-identified as protected veterans pre-offer;
The total number of job openings and jobs filled;
The total number of applicants for all jobs;
The number of protected veteran applicants hired; and
The total number of applicants hired.

49. Sample Data Collection Table (.44(k)) (from OFCCP)

50. 41 CFR 60-300.45 (contained in Subpart C)
Hiring Benchmark
41 CFR
(contained in Subpart C)

51. Hiring Benchmark for Veterans 41 CFR 60-300.45
Contractors are required to set a hiring benchmark on an annual basis
Apply benchmark to each establishment (not job group like women, minorities and individuals with disabilities)
Not listed in “AAP Parts”

52. Hiring Benchmark for Veterans 41 CFR 60-300.45
Two Options:
Use national percentage of veterans in civilian workforce, as posted on OFCCP website OR OR
Own Benchmark:
Average in civilian workforce over 3 years
Number in last 4 quarters who participated in state employment service
Applicant and hiring ratios for previous years
Recent assessments of effectiveness of outreach
Any other factors that would affect availability of qualified protected veterans
Hiring benchmark is different than a goal, it is a yardstick to measure success.

53. Hiring Benchmark for Veterans 41 CFR 60-300.45
If contractors establish a benchmark using the five-factor approach, they must document consideration of each factor and retain such records for three (3) years.

54. Notice of AAP Availability
41 CFR
(contained in Subpart C)

55. Notice of Availability of AAP (41 CFR 60-300.41)
Full affirmative action program must be made available to any employee or applicant
Exclusion: data metrics contained in (k)
Location and hours of availability must be posted at each establishment

56. 41 CFR 60-300.80 (contained in Subpart E)
Recordkeeping
41 CFR
(contained in Subpart E)

57. Record Retention Old Rule: 1 or 2 years New rule: 1, 2 or 3 years
Personnel or Employment Record
Only if less than 150 employees and contract less than $150,000
2 Years
3 Years
Applicants: Total, Total with Disabilities and Total Veterans
Hires: Job Openings, Jobs Filled, Number of Veterans and Disabled Hired
Evaluations of outreach and recruitment efforts
Records relating to hiring benchmark

58. New VEVRAA Requirements
Effective Dates
New VEVRAA Requirements

59. Effective Date Regulations effective March 24, 2014
What if you are in middle of AAP year?
Delay compliance of your written AAP (and all new requirements in Subpart C including self-identification and hiring benchmark) until next AAP year
Comply with other subparts provisions as of effective date
EEO clause
Non-discrimination
Recordkeeping
Delay – OFCCP does not encourage this approach.

60. Can I change my AAP date? Yes.
No prohibition against changing date to start next cycle before March 24, 2014.
For example, if you have a calendar year AAP started January 1, 2014, you could do a plan “update” on March 23, 2014.
Result: next AAP cycle does not start until March 23, 2015.

61. OFCCP Recommendations Before Next AAP Cycle
“Strongly encourages”
Train employees engaged in key personnel activities
Work out any “kinks”
Start invitation to self-identify for applicants pre- and post- hire
Survey existing employees
Implement documentation procedures for outreach, recruitment, self-audit and reporting
Conduct assessment of outreach and recruitment

62. OFCCP Recommendations Before Next AAP Cycle
Draft EO policy statement showing top executive support for AAP
Ensure applicants and employees have equal access to personnel processes
Conduct data analysis related to applicants and hires
Establish a hiring benchmark and apply it to the workforce in each establishment

63. Transitional AAP First AAP after March 24, 2014 Transitional AAP Must:
Comply with all existing obligations;
Address everything that that contractor has done to come into compliance with new requirements that take effect on March 24, 2014; and
To the extent that the contractor has not achieved full compliance with new requirements, discuss steps that the contractor will take to come into compliance.

64. May I start now?
Yes
Nothing prohibits implementing new VEVRAA requirements early
As long as you DO NOT ask about disability status pre-offer

65. 2014 Initiatives

66. Enforcement 2014 CSAL letters issued January 2014
Notice that contractor may be selected
2,193 establishments on scheduling list
856 distinct companies
Sent to attention of Human Resources Director
Went to each establishment

67. 2014 OFCCP Agenda Systemic pay discrimination Directive 307
Federal Contract Compliance System (FCCS) software
NPRM Pay Data Tool
January 2014 was “target date”
NPRM Construction Contractors
E.O
Target date April 2014
NPRM Sex Discrimination
Target date May 2014

68. About the Presenter
Erin Schilling provides advice, counsel, and peace of mind so that employers can focus on what they do best – operating their business. Erin represents employers in state court, federal court, and before state and federal agencies, defending clients against allegations of sexual harassment, retaliation, and breach of contract, as well as discrimination claims including age, race, disability, religion, national origin, and sex discrimination. In addition, Erin advises clients on affirmative action plan structure and preparation and represents clients in during audits by the Department of Labor. Erin also oversees the preparation of affirmative action plans for her clients.
Erin D. Schilling
Polsinelli
900 West 48th Place
Kansas City, MO 64112
You may also visit us on the web at polsinelli.com

69. Polsinelli provides this material for informational purposes only
Polsinelli provides this material for informational purposes only.  The material provided herein is general and is not intended to be legal advice. Nothing herein should be relied upon or used without consulting a lawyer to consider your specific circumstances, possible changes to applicable laws, rules and regulations and other legal issues. Receipt of this material does not establish an attorney-client relationship. 
Polsinelli is very proud of the results we obtain for our clients, but you should know that past results do not guarantee future results; that every case is different and must be judged on its own merits; and that the choice of a lawyer is an important decision and should not be based solely upon advertisements.
© 2013 Polsinelli PC. In California, Polsinelli LLP.
Polsinelli is a registered mark of Polsinelli PC
real challenges. real answers. sm