Speakers at the National Industry Liaison Group (NILG) annual conference last month included the Office of Federal Contract Compliance Programs (OFCCP) Director, Charles James, the Equal Employment Opportunity Commission Chair, Cari Dominguez, and the directors of the OFCCP regional offices. What follows are a few of the highlights from that meeting.

Contents
   OFCCP Audit Philosophy Change
   OFCCP Regulatory, Policy, and Agenda Updates
   AAP Strategy and Options

OFCCP Audit Philosophy Change top ^

• Results Oriented: Charles James announced that the new focus of the OFCCP is on results instead of activity. The new policy focuses on how many discrimination cases are found and how many audits are closed instead of the number of audits opened.
  
  
• Desk Audit Focus: Charles James also stated that the OFCCP plans on coming onsite only in those cases where there is "systemic discrimination." As defined by James Melvin (Director, OFCCP Division of Policy, Planning and Program Development), systemic discrimination occurs when there are 10 or more members of the affected group.
  
  Northeast regional director James Turner Jr. remarked that the OFCCP was now asking for information during the desk audit that was previously requested only during the onsite phase of an audit. He acknowledged that many contractors were surprised by this change. It is more important than ever to do a thorough analysis and ensure data consistency before turning over any information to the OFCCP.
  
  
• Compensation and Personnel Activity Focus: James Turner also warned that onsite audits will now focus on systemic discrimination mainly in the areas of compensation and personnel activity (i.e. hiring, promotions, and terminations). Be prepared to defend compensation and personnel policies as these are the employment areas with the greatest threat for monetary settlements.
  
  OFCCP regional director Joseph DuBray proclaimed that the "grade level analysis is a dinosaur." The OFCCP will soon make a statistician available for each of the OFCCP regional offices and contractors can expect a more sophisticated compensation analysis from the OFCCP in future audits.
  
  

• Compensation Questionnaire: OFCCP compensation questionnaires will be sent to those contractors who receive an audit Scheduling Letter in the next few months. This is a voluntary questionnaire designed to assess the burden associated with submitting compensation data during an audit. According to James Melvin, collected data will not be used to determine compliance. However, be aware that the information collected through this questionnaire will be used by the OFCCP to justify changes to the Scheduling Letter that may require more compensation data be turned over during the desk audit in the future.
  
  A sample copy of the questionnaire is posted on the OFCCP website at www.dol.gov/esa/media/reports/ofccp/compques1.htm.
  
  
• Major Changes on Hold: James Melvin apologized on behalf of the OFCCP for the delays in regulatory, document, and policy changes and updates. Specifically, a decision on the "Applicant Issue" is still in the works, the needed revisions to the Federal Contract Compliance Manual are taking longer than expected, and the affirmative action program (AAP) regulations for construction contractors are not a priority.
  
  
• Establishment "Roll-ups" Not Allowed: James Melvin also stated emphatically that the practice of combining locations into a single AAP based on recruiting areas was not permitted by current regulations or case law.
  
  

• Diversity v. Compliance: Is it better to consolidate the diversity and compliance functions in one business unit or separate them? A Microsoft representative stated that his organization assigned responsibility for compliance to the legal department because of its regulatory nature. However, other panelists and attendees disagreed and argued that the consolidation of the two functions is a more efficient use of resources and represents a more appropriate company philosophy.
  
  
• "Any Difference Rule": An attorney with Jackson Lewis LLP cautioned that, although there was currently no definitive answer, the use of the "any difference rule" to establish AAP placement goals might be unconstitutional and expose contractors to reverse discrimination claims.

If you have any questions about the current OFCCP audit policy or current regulations, please give us a call. Information on the NILG can be found on the organization's website at www.nilg.org.