Government Contractor Compliance & Regulatory Update

OFCCP’s Contractor Portal Is Now Open for AAP Certification

As previously reported, federal government contractors must certify their compliance with the requirement to develop and maintain Affirmative Action Programs (“AAPs”). The certification must be submitted through the newly created Contractor Portal, which opened for registration on February 1, 2022 and is now open to receive certification submissions.

On March 31, 2022, OFCCP held a webinar explaining the new Contractor Portal certification process. The window to certify opened March 31, 2022, and closes on June 30, 2022. OFCCP “strongly recommends” that new contractors (i.e., those within the first 120 days of their first covered contract) register and certify their current status to reflect that they are in the process of developing compliant AAPs before the June 30, 2022 deadline. OFCCP instructs that after the AAPs have been developed, new contractors will then be able to update their certification status in the Contractor Portal.

The Contractor Portal will prompt users to select one of three options to certify their current status with regard to AAPs:

(1) Entity has developed and maintained Affirmative Action Programs at each establishment, as applicable, and/or for each functional or business unit.

(2) Entity has been party to a qualifying federal contract or subcontract for 120 days or more and has not developed and maintained Affirmative Action Programs at each establishment, as applicable.

(3) Entity became a covered federal contractor or subcontractor within the past 120 days and therefore has not yet developed applicable Affirmative Action Programs.

Contractors must submit this certification annually.

The Contractor Portal has an online help request form, or you can call (800) 397-6251 with any questions.

We will continue to relay any updates for contractors regarding the Contractor Portal and other OFCCP developments here.

Contractors, Get Ready. New OFCCP Directive Signals A New Unfriendly Enforcement Era

On March 31, 2022, OFCCP issued Directive 2022-02 titled “Effective Compliance Evaluations and Enforcement” (the “Directive”).  The Directive’s stated purpose is to “provide transparency on OFCCP’s compliance evaluation policies and expectations for contractors.”  However, the Directive guts former-Director Craig Leen’s efforts to ensure OFCCP provided contractors with transparency, fairness, and consistency in audits and in its other interactions with the contractor community.  To that end, the Directive rescinds four Leen-era directives.

Key aspects of the Directive include:

Contractors No Longer Guaranteed Advance Notice of Audits.  Per the now-rescinded Directive 2018-08, contractors who appeared on the Corporate Scheduling Announcement List (“CSAL”), meaning they had been selected for an OFCCP audit, could rely on at least 45 days after the CSAL’s publication before such an audit would commence.  Well, no longer.  While the Directive commits OFCCP to “continue to post a CSAL to notify contractors that they are included in OFCCP’s scheduling list,” it “will no longer delay scheduling contractors for 45 days after the issuance of a CSAL.”  In other words, “OFCCP may begin scheduling contractors upon the publication of the CSAL.”  The stated purpose of this change is to “promote efficiency,” but many contractors who have experienced lengthy delays in OFCCP contact during audits may question this stated motivation.  Whatever the true purpose, contractors no longer can count on any advance notice of an audit going forward.

Contractors Can No Longer Expect Grace From OFCCP During Audits.  The now-rescinded Directive 2018-08 provided that contractors that submit their affirmative action programs (“AAPs”) within 30 days of receiving an audit scheduling letter would automatically receive a 30-day extension for providing the other items requested in the scheduling letter.  Well, no longer.  Contractors scheduled for audits going forward will be “required to submit all AAPs and itemized listing data, including support data, within 30 calendar days.”  Extensions, may be granted “in the event of extraordinary circumstances.”  Examples of such circumstances are:

  1. Extended medical absences of key personnel;
  2. Death in the immediate family of key personnel;
  3. Localized or company-specific disaster affecting records retrieval such as a flood, fire, or computer virus;
  4. Unexpected military service absence of key personnel; and
  5. Unexpected turnover or departure of key affirmative action official.

When extensions are requested, “OFCCP may ask for supporting documentation, where appropriate.  OFCCP will decide whether to grant the extension on a case-by-case basis.”

Contractors should not expect OFCCP to be liberal in the granting of extensions.  OFCCP warns that failure to provide information requested in the scheduling letter in a timely manner “may result in the issuance of a Notice to Show Cause why OFCCP should not initiate enforcement proceedings.  The Director of OFCCP also has discretion to immediately refer the matter to the Solicitor [of Labor] for administrative enforcement when a contractor refuses to submit an AAP or other requested information and efforts to conciliate the matter are unsuccessful.”

Contractors should expect to hear threats of Show Cause Notices and referrals to the Solicitor if they fail to submit information by OFCCP-established timelines.

Contractors Can Expect More Requests for Additional Data During Audits.  The Directive takes pains to “reiterate[]” OFCCP’s “long-standing policy that the agency may request supplemental data, follow-up interviews, and/or additional records and information if the contractor’s desk audit submission is incomplete or OFCCP identifies issues that warrant further analysis.”  The Directive somewhat helpfully provides that “[w]hen requesting this supplemental information, OFCCP will reasonably tailor the request to the areas of concern, allow contractors a reasonable time to respond, and include the basis for the request.”  Of course, what “reasonably tailored” and “reasonable time to respond” mean in practice remain to be seen.  The general tenor of the Directive suggests OFCCP intends to provide short timelines and hold contractors to them.

Further, the Directive makes clear “[w]here OFCCP finds additional compliance issues, these supplemental requests do not limit the agency’s ability to request additional information or expand the investigation,” and states these requests may seek information “to cover a period beginning two years before the date the contractor received the Scheduling Letter” as well as information “created after the date of the Scheduling Letter to determine whether the practices in question have ended and to evaluate whether the practice has continued.”

The Directive also indicates that document requests will be a standard part of conciliation discussions, stating: “[w]hen entering conciliation discussions, OFCCP will request wage and benefits data and will consider information the contractor provides on mitigation, such as employee turnover data, for the purpose of accurately estimating make-whole relief. The exchange of this data will expedite the conciliation process.”

Contractors Can Expect OFCCP’s Audits To Include More Requests For Witness Information and More Witness Interviews.  The Directive provides that “[e]mpowering and listening to workers to understand their experiences is an important priority for OFCCP.”  Accordingly, the Directive “underscores the importance of contractors providing access to their premises and records relevant to OFCCP’s investigation,” which “includes records … that will enable OFCCP to contact employees, former employees, applicants, or other witnesses.”

To that end, “OFCCP will request that contractors provide the agency with unredacted contact information such as telephone numbers, mailing addresses, email addresses, and social security numbers for these individuals.”  While the Directive recognizes the contractor’s right to “have an attorney or another representative present” when OFCCP “conducts interviews with upper-level managers and directors in their management capacity that speak for, or make decisions on behalf of, the company.”  However, the Directive contends that “[g]enerally, the contractor does not have a right to have a representative present for agency interviews of former employees, with some exceptions.”  The Directive reiterates the agency’s longstanding position “that when OFCCP is interviewing nonmanagement personnel, the contractor does not have the right to have a representative present.”

Changes to audit scheduling.  The Directive shares that OFCCP is “enhancing its neutral scheduling procedures for selecting federal contractors for compliance evaluations to reach a broader universe of contractors” and “to identify those with greater risk factors for noncompliance with nondiscrimination and affirmative action requirements.”  Notably, the Directive fails to share what it has done or plans to do in order to “strengthen” its selection procedures.  It does state OFCCP “will continue to provide information about its scheduling methodology to explain how the agency neutrally selects contractors for a compliance evaluation.”

Director Yang Cleans House.  In addition to the changes set forth above, the Directive rescinds four Leen-era directives, contending they “are either outdated or modified by this directive to provide updated guidance and transparency on OFCCP’s policies for compliance evaluations.”

  • OFCCP is rescinding DIR 2018-08, Transparency in OFCCP Compliance Activities, for the stated reason of “minimiz[ing] the delay in remedying employment discrimination and positively impact[ing] more workers.” That directive contained a number of contractor-friendly provisions discussed above, such as “authorizing an automatic 30-day extension for submitting key compensation, employment activity, and other support data” and an “automatic 45-day scheduling delay after the issuance of a Corporate Scheduling Announcement List (CSAL) to notify contractors that they are included in OFCCP’s scheduling list.”  The Directive eliminates those “policies because they run counter to OFCCP’s goal of conducting comprehensive compliance evaluations that foster consistent accountability and timely submission of required information.”  It also contends other aspects of the directive have been incorporated into the agency’s Federal Contract Compliance Manual.
  • OFCCP is also rescinding DIR 2020-02, Efficiency in Compliance Evaluations, which it describes as “an outdated directive.” Specifically, the Directive claims DIR 2020-02 “references OFCCP enforcement data and measures from previous fiscal years, which the agency has accomplished or exceeded.”  But, OFCCP does not address the other aspects of DIR 2020-02, which were aimed at ensuring OFCCP acted promptly during compliance audits.  Given that the Directive makes numerous changes unfavorable to contractors to make compliance evaluations more efficient and eliminate delays, it seems incongruent to eliminate requirements that ensure OFCCP also acts expeditiously during audits.
  • OFCCP also is rescinding DIR 2018-06, Contractor Recognition Program.  OFCCP does not really explain why it is rescinding the program “which had the purpose of recognizing contractors with high-performing compliance programs and supporting proactive compliance.”  Instead, the Directive states “OFCCP will continue to emphasize and support a proactive approach to compliance by contractors, including actively self-auditing employment systems to identify and resolve problems.”
  • Finally, the Directive rescinds DIR 2021-02, Certainty in OFCCP Policies and Practices. It explains this directive “committed the agency to an ‘ongoing review on at least an annual basis of all of its policies and practices,’” but “[u]pon reconsideration, OFCCP does not believe an annual review of all policies and practices is practical or necessary.”  Putting aside the merits of the agency’s view of the need for regular review of its policies and practices, this explanation does not fully convey what rescinding DIR 2021-02 eliminates.  That directive did far more than require the agency to review its policies and practices; it enshrined what was known as the Contractor Bill of Rights.  That document included numerous reasonable expectations such as professional courtesy by OFCCP staff, timely responses to compliance assistance questions, and confidentiality of information submitted to OFCCP.

The Directive takes effect March 31, 2022.  We will continue to monitor any additional developments related to this Directive and report on them here.

OFCCP to Hold Webinar on AAP Certification

As previously reported, OFCCP has developed a Contractor Portal through which contractors are to certify compliance with their obligation to develop and maintain Affirmative Action Programs (“AAPs”).  Contractors may begin submitting certifications through the Contractor Portal on March 31, 2022, and certifications must be submitted by June 30, 2022.

The Contractor Portal went live on February 1, 2022, and on that date OFCCP held a webinar explaining the process by which contractors can register with the Contractor Portal.

On March 17, 2022, OFCCP announced it will be holding a second webinar on March 31, 2022, at which it will address “how federal contractors can certify AAP compliance through the new Contractor Portal.”  OFCCP states the webinar will provide:

  • An overview of the OFCCP Contractor Portal
  • A demonstration on how your company can certify compliance through the OFCCP Contractor Portal
  • Answers to common questions received

Those interested in attending the webinar can register here.

OFCCP Proposes Significant Rule Amendments to Increase its “Flexibility” and Loosen Standards For Discrimination Findings

On December 10, 2020, OFCCP published its “Nondiscrimination Obligations of Federal Contractors and Subcontractors: Procedures To Resolve Potential Employment Discrimination” (the “Rule”).  The Rule was welcomed by the contractor community, as it established important procedural and substantive requirements before OFCCP can issue discrimination findings.  Among other things, the Rule sets forth clear parameters for what OFCCP has to establish in order to pursue discrimination findings, and provides for transparency in the compliance evaluation process to ensure contractors understand the bases for OFCCP’s preliminary findings and to foster dialogue to avoid erroneously-based Notices of Violation (“NOVs”).

On March 21, 2022, the agency announced it will be proposing amendments to the Rule as well as other regulatory changes.  These proposed changes would roll back many of the Rule’s safeguards in order to, as Director Jenny Yang explained, lift “constrain[ts on] OFCCP’s broad enforcement discretion.”  As detailed below, the proposed rulemaking would, among other things:

  • eliminate evidentiary requirements for the issuance of pre-determination notices (“PDNs”) and NOVs;
  • eliminate the requirement that PDNs be approved by the OFCCP Director before issuance;
  • permit OFCCP to issue NOVs for violations not included in PDNs; and
  • reduce contractors’ time for responding to PDNs by half.

It is clear from the proposed rulemaking that the Biden Administration’s OFCCP wishes to pursue discrimination findings without having to comply with certain evidentiary and procedural requirements.  It justifies the changes on various grounds, including its desire for flexibility in enforcing its mandate and to eliminate delays caused by contractors seeking to hold the agency to the Rule’s requirements.

If these changes are implemented, contractors can expect to face more findings of discrimination with less transparency from OFCCP.  They will no longer be able to count on:  receiving detailed bases for preliminary findings of discrimination or formal findings of discrimination; receiving notice and the opportunity to respond to discrimination findings prior to the issuance of an NOV; or knowing any PDN or NOV has been subject to a review by the Director, which was intended to provide some level of consistency to discrimination findings across the agency.  This development, as well as the Directive on disclosure of pay equity analyses announced last week, is a clear signal to contractors that OFCCP will be far more aggressive in compliance evaluations moving forward.

OFCCP’s proposed rulemaking will be formally published on March 22, 2022.  The public will have until April 21, 2022 to submit comments.

What Amendments Are Being Proposed?

Removal of Evidentiary and Procedural Standards for PDNs and NOVs

The existing Rule provides that before OFCCP may issue a pre-determination notice (“PDN”), providing the contractor notice of a preliminary finding of discrimination and the opportunity to respond, the agency must have certain evidentiary support.  Specifically, the agency is required to disclose both the “qualitative” (i.e., testimony and documents) and “quantitative” (i.e., data analysis) evidentiary support for its preliminary finding(s).  With regard to quantitative evidence, the agency is required to demonstrate any disparity is “practically significant.”  Further, PDNs must be approved by the OFCCP Director before issuance.

OFCCP now proposes to do away with these safeguards.  With regard to the evidentiary prerequisites, OFCCP seeks to eliminate them, “conclud[ing] that rigid evidentiary standards are unnecessary and unduly constrain the agency’s broad enforcement discretion as to the cases it decides to litigate and those it does not.”  In its proposed rulemaking, the agency contends the requirements are inconsistent with Title VII’s evidentiary standards and “led to delays in resolutions by increasing disagreements between OFCCP and contractors about the requirements for” PDNs.  Further, OFCCP complains that the requirement that the agency disclose in the PDN the anecdotal evidence relied upon in reaching its preliminary determination “may have a chilling effect on the willingness of victims and witnesses to participate in OFCCP’s investigation due to concerns that an employer may uncover their identities, which could lead to retaliation.”  As proposed, OFCCP would only have to issue a PDN “describing the indicators and providing the contractor an opportunity to respond.”

Because OFCCP proposes it no longer be required to disclose qualitative and quantitative evidence in its PDN, its proposal would also do away with the definitions of those terms in the Rule.  OFCCP also proposes to jettison the requirement it demonstrate practical significance prior to issuing a PDN.  Further, PDNs will no longer require Director approval prior to issuance.

OFCCP seeks to do away with the same evidentiary requirements currently in place for NOVs, as well as the Rule’s requirement that NOVs may not include discrimination findings unless they were also included in the PDN.  In other words, under OFCCP’s proposal, a contractor could first learn of a discrimination issue when OFCCP issues a formal finding of discrimination in an NOV.

Reducing Contractors’ Time To Respond to a PDN

One welcome feature of the Rule is its extension of the time to respond to a PDN to 30 days.  The OFCCP’s proposal would revert the response time back to 15 days, which may be extended by OFCCP for “good cause.”  Given that PDNs can be (and generally are) issued with little to no notice, and may contain multiple indicators of discrimination that often take time to analyze and rebut, this proposed change will place significant time constraints on contractors.

Defining “Reasonable” Efforts” With Regard To Conciliation

Current regulations (41 C.F.R. § 60-1.20(b)) provide that if OFCCP finds “deficiencies” during a compliance evaluation, “reasonable efforts [shall be made] to secure compliance through conciliation and persuasion.”  OFCCP proposes to define such “reasonable efforts” to “make clear that OFCCP’s conciliation standards align with Title VII.”  To that end, OFCCP proposes to have “reasonable efforts” be “interpreted consistently with title VII of the Civil Rights Act of 1964 and its requirement that the Equal Employment Opportunity Commission ‘endeavor to eliminate any such alleged unlawful employment practice by informal methods of conference, conciliation, and persuasion.’”

Show Cause Notice Provisions

Show Cause Notices (“SCNs”) are issued to contractors OFCCP has “reasonable cause to believe” have violated the equal opportunity clause, and provides the contractor 30 days to show cause why enforcement proceedings should not be instituted.  SCNs typically follow the issuance of an NOV and the failure by OFCCP and the contractor to reach a conciliation agreement, though they can also flow from a contractor refusing OFCCP access to facilities or information.

OFCCP proposes to amend its regulations to make clear that SCNs may be issued without first issuing a PDN or NOV, where the contractor “has failed to provide access to its premises for an on-site review or refused to provide access to witnesses, records, or other information.”

OFCCP’s proposal also provides that it may issue Show Cause Notices (“SCNs”) that include violations not included in its NOVs.  SCNs must “include each violation that OFCCP has identified at the time of issuance,” and where “OFCCP identifies additional violations after issuing a [SCN], OFCCP will modify or amend the” SCN.  The proposed regulation does provide that contractors will be offered “an opportunity to conciliate additional violations identified in the” SCN that are not included in a prior NOV.

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We will continue to monitor developments with regard to these proposed regulatory changes.

President Biden Issues Executive Order Promoting New Pay Equity and Transparency Requirements On Federal Contractors

On March 15, 2022, President Biden issued his Executive Order on Advancing Economy, Efficiency, and Effectiveness in Federal Contracting by Promoting Pay Equity and Transparency (the “Order”).

Among other things, the Order requires the Federal Acquisition Regulatory Council (“FAR Council”) to “consider issuing proposed rules … enhancing pay equity and transparency for job applicants and employees of Federal contractors and subcontractors.”  In so doing, the FAR Council is required to “specifically consider whether any such rules should limit or prohibit Federal contractors and subcontractors from seeking and considering information about job applicants’ and employees’ existing or past compensation when making employment decisions,” and “the inclusion of appropriate accountability measures in any such rules.”

For now, nothing changes for contractors.  However, it is likely a new federal acquisition regulation imposing new pay equity and transparency requirements on contractors and subcontractors will be issued in the near future and incorporated into new federal contracts.

The Order was issued on the same day OFCCP issued a new directive addressing federal contractors’ obligations to assess their compensation systems and turning over pay equity audits to the agency during OFCCP audits.

We will monitor and report on developments related to the Order.

OFCCP Will Start Demanding Contractors’ Internal Pay Equity Audits

On March 15, 2022, the OFCCP issued its first directive since President Biden took office.  Directive 2022-01 (the “Directive”) addresses contractors’ obligations to analyze their compensation systems and to turn over such analyses when under audit.

The Directive begins by highlighting contractors’ obligations under 41 C.F.R. § 2.17(b).  That regulation provides that contractors “must perform in-depth analyses” of their “compensation system(s) to determine whether there are gender-, race-, or ethnicity-based disparities.”  The regulation does not prescribe what such analyses must entail, only that they must “determine whether and where impediments to equal employment opportunity exist.”  Where such impediments exist, contractors are required to “develop and execute action-oriented programs designed to correct any problem areas.”  41 C.F.R. § 217(c).

The Directive then “clarifies OFCCP’s authority to access and review contractors’” compensation system analyses, which it defines as “pay equity audits.”  The Directive indicates OFCCP will request such analyses when a desk audit “reveals disparities in pay or other concerns about the contractor’s compensation practices.”  The Directive asserts OFCCP has the “authority” to obtain such materials “to understand the methodology used and verify compliance with” 41 C.F.R. § 2.17.  OFCCP states that that it

will request that the contractor provide a complete copy of the pay equity audit(s) conducted pursuant to [41 C.F.R. §] 2.17(b)(3) that shows all pay groupings that were evaluated, any variables used, and the results of the analyses, including any disparities found.  For compensation regression or statistical analysis results, OFCCP may request the model statistics (such as b-coefficients, significance tests, R-squared, adjusted R-squared, F-tests, etc.) for all variables or comparisons in the model.  OFCCP may also request information relating to the frequency of pay equity audits, the communication to management, and how the results were used to rectify disparities based on gender, race and/or ethnicity.

(emphases added).  The Directive states the OFCCP may request such analyses “covering a period beginning two years before the date the contractor received the Scheduling Letter.”

The final portion of the Directive anticipates contractors’ assertion of attorney-client privilege over their pay equity audits.  OFCCP essentially rejects any claim that attorney-client privilege shields the production of internal pay equity audits to the agency:

OFCCP notes, however, that federal contractors must maintain and make available to OFCCP documentation of their compliance with OFCCP regulations.  Contractors cannot withhold these documents by invoking attorney-client privilege or the attorney work-product doctrine.  OFCCP has the authority under its regulations to request the analyses the contractor has conducted to comply with OFCCP regulations.

The Directive, after discussing the scope of the attorney-client privilege and contending the privilege does not apply to compensation analyses conducted for the purpose of complying with OFCCP’s regulations, concludes with a warning to contractors who refuse to turn over their internal pay equity analyses:

in cases where the desk audit reveals disparities in pay or other concerns about the contractor’s compensation practices, OFCCP will continue to request the related pay equity audit that a contractor conducts of its employment processes in order to meet the regulatory requirements of 41 CFR 60-2.17(b).  Failure to provide the required pay equity audit will be considered by OFCCP as an admission of noncompliance with these regulatory requirements.

(emphasis added).  The Directive, however, also indicates that where the contractor turns over a pay equity analysis, OFCCP will not seek other privileged pay equity analyses a contractor may have conducted – provided the contractor can establish privilege exists:

Provided that the contractor produces to OFCCP a pay equity audit and compliance records sufficient to comply with 41 CFR 60-2.17(b)(3) in the course of its evaluation, OFCCP generally will not seek additional privileged analyses where the contractor demonstrates that it also conducted a properly privileged pay equity process with an attorney.

The Directive is the first formal declaration that OFCCP under Director Yang will be aggressive in exploring compensation issues during audits.  Contractors have now been warned that OFCCP will not accept assertions of privilege as bases for resisting requests for pay equity analyses and should adapt their processes, with the assistance of counsel, to account for this development and ensure they can demonstrate compliance with regulatory requirements while also protecting privileged compensation analyses.

U.S. Department of Agriculture Proposes Rule Requiring Contractors to Certify Labor Law Compliance

The U.S. Department of Agriculture (“USDA”) recently published a proposed rule that would require all federal contractors to certify compliance with 16 applicable labor laws. The certification requires an affirmative statement attesting compliance and further requires contractors to “promptly report[] to the contracting officer if and when adjudicated evidence of noncompliance occurs.” Under the rule, contractors must further affirm, to the best of their knowledge, that all subcontractors and suppliers are also compliant with all applicable labor laws.

The rule is reminiscent of the Obama Administration’s Fair Pay and Safe Workplaces Executive Order, commonly known as the “Blacklisting Rule,” which required federal contractors to disclose violations of federal and state labor laws as part of the contract bidding process. The Blacklisting Rule and its implementing regulations were short lived, with President Trump revoking the executive order and signing into law a Congressional Joint Resolution of Disapproval that revoked the regulations on March 27, 2017.

While the Blacklisting Rule applied to all federal contractors with contracts above a certain amount, the USDA’s proposed rule would apply exclusively to USDA contracts. Nevertheless, the proposed rule reflects an effort to resurrect the spirit of the Blacklisting Rule, at least in part, and portends the possibility other agencies will implement their own labor law compliance rules for their contracts.

The deadline to provide comments is March 21, 2022. We will continue to monitor and report on any new developments.

Contractors Are Now On The Clock: OFCCP’s Contractor Portal Is Open

As we previously reported, the OFCCP received approval and has launched a “Contractor Portal” which will be used to, among other things, have non-construction contractors annually certify compliance with their affirmative action program (“AAP”) obligations.  On February 1, 2022, the Contractor Portal went live.  In a bulletin issued on the same day, the OFCCP “strongly encouraged” contractors to register with the portal by March 30, 2022 “to avoid any delays with certification.”  Although contractors may register with the portal now, they will only be able to certify compliance beginning March 31, 2022.  Certifications are due June 30, 2022.  Contractors who do not register and certify by the deadline are more likely to be selected for compliance evaluations, but contractors who do certify may still be selected for audits.

The OFCCP also posted a user guide to help contractors register with the portal, and updated its FAQs about the portal.  The new FAQs primarily add questions and answers concerning technical issues related to the registration process.

On February 1, 2022, OFCCP held a webinar explaining the registration process and answering some questions.  Although most of the questions were focused on the registration process itself, OFCCP did answer some questions about AAP certification.  For example, OFCCP clarified contractors will be required to certify whether, at the time of certification, they have developed and maintained an AAP for each establishment or functional unit.  Accordingly, for contractors with AAP years that start during the window in which they can certify AAP compliance (i.e., between March 31, 2022 – June 30, 2022), they have some latitude as to whether to certify compliance when their 2021-2022 plan is in effect, or to wait until their 2022-2023 plan is created.  For example, if a contractor has an AAP year that begins June 1, 2022, they can certify compliance in late May relying on their plan that runs from June 1, 2021 to May 30, 2022.

Contractors planning to register should begin to get familiar with the portal.  It should be pre-populated with data from their 2018 EEO-1 reports, so contractors may need to update the establishments listed.  Contractors will also need to ensure the proper personnel are credentialed to access the portal.

OFCCP plans to host another webinar on March 31, 2022, addressing the certification process.

We will continue to update contractors on developments related to the Contractor Portal and other OFCCP initiatives.

Federal Government Confirms It Is Currently Not Enforcing Contractor COVID-19 Requirements

Following up on two recent federal court decisions (discussed here and here) enjoining the enforcement of the contractor vaccine mandate, the Office of Management and Budget (“OMB”) has issued guidance, posted on the Safer Federal Workforce Task Force’s (“Task Force”) website, regarding the federal government’s response to those decisions.

The guidance provides that “The Government will take no action to enforce the clause implementing requirements of Executive Order 14042, absent further written notice from the agency, where the place of performance identified in the contract is in a U.S. state or outlying area subject to a court order prohibiting the application of requirements pursuant to the Executive Order (hereinafter, “Excluded State or Outlying Area”).”  The guidance further states that currently Excluded States and Outlying Areas include the entire country and all of its territories, but this may change if the injunctions are lifted or modified.

Notably, although the court orders enjoining enforcement focused solely on the vaccine mandate portion of the Task Force’s requirements issued pursuant to Executive Order 14042, OMB’s statement indicates no portion of the contractor requirements (such as the mask requirement) will be enforced.

The full text of the announcement is provided below.

Regarding Applicable Court Orders and Injunctions: The Office of Management and Budget has issued guidance on implementing requirements of Executive Order 14042 while ensuring compliance with applicable court orders and injunctions, including those that are preliminary and may be supplemented, modified, or vacated, depending on the course of ongoing litigation.

  • For existing contracts or contract-like instruments (hereinafter “contracts”) that contain a clause implementing requirements of Executive Order 14042:The Government will take no action to enforce the clause implementing requirements of Executive Order 14042, absent further written notice from the agency, where the place of performance identified in the contract is in a U.S. state or outlying area subject to a court order prohibiting the application of requirements pursuant to the Executive Order (hereinafter, “Excluded State or Outlying Area”). In all other circumstances, the Government will enforce the clause, except for contractor employees who perform substantial work on or in connection with a covered contract in an Excluded State or Outlying Area, or in a covered contractor workplace located in an Excluded State or Outlying Area.
  • Currently Excluded States and Outlying Areas: All of the United States and its outlying areas, including:
    • The fifty States;
    • The District of Columbia;
    • The commonwealths of Puerto Rico and the Northern Mariana Islands;
    • The territories of American Samoa, Guam, and the United States Virgin Islands; and
    • The minor outlying islands of Baker Island, Howland Island, Jarvis Island, Johnston Atoll, Kingman Reef, Midway Islands, Navassa Island, Palmyra Atoll, and Wake Atoll.

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Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns.  Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

Contractor Vaccine Mandate Blocked Nationwide

UPDATE (2/4/22): On February 2, the Eleventh Circuit scheduled oral argument for April 8.

UPDATE (1/27/22): On January 21, 2022, Judge Baker issued an order in response to the federal government’s request for clarification of his order enjoining the federal contractor vaccine mandate nationwide.  Judge Baker’s latest order addressed two inquiries.  First, he declined to answer the question of “whether the preliminary injunction ‘prohibit[s] private federal contractors from mutually agreeing with Defendants to include COVID-19 safety clauses in their federal contracts, thus allowing those federal contractors to voluntarily comply with the Task Force guidelines, including requiring their employees to be vaccinated,” finding such a ruling would constitute an impermissible advisory opinion.  However, in response to a question about the scope of the injunction, specifically whether it is limited to the vaccine mandate contained in the Safer Federal Workforce Task Force’s Guidance, or extends to the masking and social distancing requirements in the Guidance, the Court stated that the injunction is limited to the vaccine requirements.  In so doing, the Court stated that this reading is consistent with the text of the injunction (as well as the guidance in our original blog, below).  The Task Force has yet to update its guidance, issued in the wake of his injunction, stating the federal government will not enforce any aspects of the Guidelines.  We will report if that guidance changes as a result of this new development.

With respect to the federal government’s appeal of the injunction, briefing is set to conclude on February 22 and oral argument has been tentatively set for the week of April 4.

UPDATE (01/04/22): On December 22, a Federal judge in Florida became the latest judge to issue a preliminary injunction halting enforcement of the federal contractor and subcontractor vaccine mandate requirements.  The decision in State of Florida v. Nelson, et al. blocks enforcement only in Florida, but Judge R. Stan Baker’s order (discussed below) in State of Georgia, et al. v. President of the United States, et al. blocking enforcement nationwide remains in effect.  The Federal government has appealed that decision to the Eleventh Circuit and the Eleventh Circuit has declined to stay Judge Baker’s order during that appeal. Briefing on the appeal will not be completed until the end of January.

UPDATE: On December 9, attorneys for the Justice Department appealed the nationwide injunction to the Eleventh Circuit.  We will continue to provide updates as the situation develops.

On December 7, 2021, a federal judge issued a nationwide preliminary injunction halting enforcement of the federal contractor and subcontractor vaccine mandate requirements issued by the Safer Federal Workforce Task Force in response to President Biden’s Executive Order 14042, Ensuring Adequate COVID Safety Protocols for Federal Contractors.  The mandate requires covered contractor employees to be fully vaccinated by January 18, 2022.  On November 30, a federal judge in Kentucky blocked enforcement of the mandate in Kentucky, Ohio, and Tennessee.  We blogged about that decision here.

Judge R. Stan Baker’s decision came in a case originally filed by Georgia, Alabama, Idaho, Kansas, South Carolina, Utah, and West Virginia, the governors of several of those states, and various state agencies, including the Board of Regents of the University System of Georgia.  Later, the Associate Builders and Contractors, Inc. (“ABC”), a trade organization, and one of its chapters in Georgia filed a Motion to Intervene along with their own Motion for Preliminary Injunction.  Judge Baker denied the Motion to Intervene as to the local chapter, but granted the Motion to Intervene as to ABC.  As discussed below, the Judge then found that the inclusion of this additional plaintiff warranted issuing a nationwide injunction (as opposed to the Kentucky judge’s more limited Order).

As in the Kentucky case, Judge Baker found the Plaintiffs would likely be able to show that the mandate exceeds the President’s powers under the Federal Property and Administrative Services Act.  He declined to issue a decision as to whether the mandate likely violated the constitutional non-delegation doctrine or infringed on rights reserved to the states under the Tenth Amendment.

As to why the Court here issued a nationwide injunction, Judge Baker cited the inclusion of ABC, contending that the trade association had members “all over the country” and were awarded “57% of federal contracts exceeding $25 million during fiscal years 2009-2020.”  His injunction does not appear to apply to other aspects of the contractor COVID-19 requirements issued by the Task Force, including those related to masking and social distancing.

It is unclear whether the federal government will seek to have the injunction lifted, and whether such an effort will be successful.  But, effective immediately, covered contractors in any state or territory of the United States of America are no longer mandated to require their covered workers to be vaccinated.

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Proskauer’s cross-disciplinary, cross-jurisdictional Coronavirus Response Team is focused on supporting and addressing client concerns.  Visit our Coronavirus Resource Center for guidance on risk management measures, practical steps businesses can take and resources to help manage ongoing operations.

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