Forty Million More Reasons To Care About Workplace Equity

Actually “40,569,816 reasons,” to be exact. Last week the Office of Federal Contract Compliance Programs (OFCCP) issued a press release lauding its performance in fiscal year 2019 in which it obtained a record-setting $40,569,816 in monetary settlements from federal contractors. The results reflect a more than sixty-five percent (65%) increase over the agency’s prior record that was set in FY 2017. Indeed, the agency’s three-year total recovery between FY 2017-2019 is greater than the total amount recovered in the seven-year period between FY2010 and 2016.

OFCCP enforces Executive Order 11246, Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974. These authorities preclude federal contractors and subcontractors from discriminating in employment because of race, color, religion, sex, sexual orientation, gender identity, national origin, disability, or veteran status. They also require federal contractors to take affirmative steps to ensure equal employment opportunity in their employment processes. Contractors also are prohibited from discriminating against applicants or employees because they inquire about, discuss, or disclose their compensation or that of others, subject to certain limitations.

Unlike its EEOC counterpart, the OFCCP has broad proactive audit authority. In March of this year, the agency issued its Corporate Scheduling Announcement List identifying 3,500 worksites for potential compliance audit. By way of comparison, during the first three quarters of FY 2019, the agency only conducted seventy (70) complaint investigations. (See “Complaint Investigation Outcomes” link).

So why the massive uptick in money recovered? Per the OFCCP itself, the agency credits its implementation of the “Early Resolution Procedures” (ERP) program in FY 2019, which led to a number of corporate-wide settlements early in the review process. The ERP is designed to help contractors and OFCCP achieve the mutual goal of equal employment opportunity in federal contracting and reduce the length of compliance evaluations. Importantly, ERP acknowledges that many multi-establishment contractors have centralized human resource systems and corporate-wide policies and that issues OFCCP finds at one contractor establishment may exist at others.

In other words, for larger contractors with multiple worksites, audits are now far more likely to cascade beyond their initial scope and seek to redress systemic issues on a company-wide basis.