Charles James, the Director of the Labor Department's Office of Federal Contract Compliance Programs (OFCCP), recently announced that the agency is scheduling more compliance reviews but plans to end more of them sooner — after the desk audit stage — if serious problems are not identified in the contractor's submission of data.

What does this mean for you? First, your chances of getting an OFCCP Scheduling Letter have just gone up — by what percent we do not yet know. Second, if you get a Scheduling Letter, the most important items you submit for the desk audit will NOT be your written affirmative action programs (AAPs) but the "support data" requested in that letter's Itemized Listing. Among other items, AAP "support data" include your employment activity (applicants, hires, promotions, terminations) and compensation data.

A full-blown audit includes both a desk audit (at the OFCCP's desk) and a comprehensive onsite evaluation at the contractor's facility. While both the desk and onsite portions of an audit are quite intrusive, most contractors fear the onsite portion far more because it is more disruptive and usually includes interviews with both managers and employees. So anything that would lessen a contractor's chances of having the onsite audit is welcome news indeed.

The OFCCP's intent is to refocus its resources, conduct more desk audits which are less labor intensive for the agency than a full-blown audit, and use this new process as a means to identify and remedy more systemic discrimination cases (see definition below). The agency will rely less on its traditional affirmative action approach of observing a contractor's AAP goals and good-faith efforts in reaching those goals. Instead, OFCCP will test the employment activity and compensation data submitted for the desk audit to determine the good contractors (no apparent discrimination) from the bad contractors (apparent discrimination). If no apparent problems are identified in the contractor's data, the audit will close. If potential systemic discrimination is identified, requests for additional data and justification are likely as well as the onsite portion of the audit.

Now more than ever, it behooves you to provide data for the desk audit that have the highest integrity possible and to present those data in the manner in which they should be analyzed by the OFCCP. You have options. For example, will you prepare and present your employment activity by job title or job group? Will you give the agency raw data or your actual analysis? How can you provide compensation data that will allow the agency to do their work and yet protect the confidentiality of your employees' pay? If you have disparities, will you want to explain them before the agency discovers them or wait and hope the OFCCP does not discover them?

Clients that keep their employment activity up-to-date and pay particular attention to the reports we provide annually will be in a much better position than those who do not. To best meet these new challenges, we suggest that you work with someone experienced in dealing with the agency. Not being familiar with recent changes in OFCCP policies and the affirmative action regulations can mean the difference between a review that ends at the desk audit and an onsite visit from the OFCCP.

The bad news — more audits; the good news — more of them will end at the desk audit stage — if the data submitted by the contractor does not fail any of the OFCCP's systemic discrimination tests. If we can be of assistance, please give us a call.

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"Systemic discrimination," often referred to as a pattern or practice of discrimination, concerns a recurring practice or continuing policy (unintentional) rather than an isolated act of discrimination (intentional). It is initially identified by applying disparate or adverse impact tests to data sets.