Government Contractor Compliance & Regulatory Update

Recipients of the 2018 HIRE Vets Medallion Award Announced

Quick Hit: The U.S. Department of Labor has announced the recipients of the 2018 HIRE Vets Medallion Program Demonstration Award. The award recognizes employers who hire veterans and take efforts to establish employee development programs and veteran-specific benefits to improve their retention. The list of successful employers  honored as the 2018 award recipients includes small businesses, community-based nonprofits, and national companies.

Key Takeaway: Award recipients receive a certificate stating the award year and a digital image of the HIRE Vets Medallion Award, which they have the opportunity to utilize in marketing their company as a veteran-friendly business. Although the Veterans’ Employment and Training Service (VETS) accepted only a limited number of applications in 2018, the 2019 HIRE Vets Medallion Program will be open to all employers and those who successfully meet the program requirements will receive the awards. The Department of Labor will begin accepting applications for the 2019 HIRE Vets Medallion Award on January 31, 2019, the link to apply is available here: https://www.hirevets.gov/.

More Detail:

The Department of Labor established the HIRE Vets Program under the Honoring Investments in Recruiting and Employing American Military Veterans Act (“HIRE Vets Act”), signed by President Trump on May 5, 2017. The program recognizes employer efforts to recruit, employ, and retain veterans. Employer-applicants meeting criteria established in the rule receive a “HIRE Vets Medallion Award.”

There are different awards for large employers (500-plus employees), medium employers (51-499 employees), and small employers (50 or fewer employees). Additionally, there are two award tiers: Gold and Platinum. For each award, the employer must satisfy a set of criteria. For example, a large employer will qualify for a platinum award if:

  1. its veterans hired during 2018 calendar year is not less than 10% of all employees hired,
  2. its retention of veterans hired during 2017 calendar year is not less than 85% of veterans hired and retained for 12 months,
  3. it had a veteran organization or resource group established and in existence on December 31, 2018,
  4. it had a leadership program established and in existence on December 31, 2018,
  5. it had a dedicated HR professional for veteran employees,
  6. it provided a pay differential program,
  7. it made a tuition assistance program available, and
  8. it did not have any of the labor law violations identified in 20 CFR § 1011.120.

A complete list of program requirements and criteria is available here: https://www.hirevets.gov/resources

POTENTIAL PARTIAL GOVERNMENT SHUTDOWN – What Government Contractors Need To Know

A partial government shutdown may soon be upon us.  According to the Washington Post, “[t]he White House and a number of federal agencies have started advanced preparations for a partial government shutdown, as President Trump and congressional Democrats appear unlikely to resolve their fight over a border wall before some government funding lapses at week’s end. ” Unlike past shutdowns, because Congress has already passed, and the President has signed, spending bills into law that apply to approximately 75% of government spending, a government shutdown will be far less extensive than those experienced in the past. If one occurs, the departments of the Interior, Agriculture, State, Housing and Urban Development, Treasury, Commerce, and Homeland Security would lose funding – and government contractors with existing contracts with those agencies could face a temporary loss of funding. Continue Reading

New OFCCP Directive Introduces Early Resolution Procedures For Compliance Evaluations

Quick Hit: OFCCP’s new Directive 2019-02 sets forth Early Resolution Procedures (“ERP”) to resolve violations discovered during a desk audit of contractors with multiple establishments.  OFCCP touts that “ERP allows OFCCP and contractors with multiple establishments to cooperatively develop corporate-wide compliance with OFCCP’s requirements.”  Contractors who successfully resolve violations through ERP will be spared full scale compliance evaluations, but will have to agree to conciliation agreements that will include five years of monitoring and commitments to rectify similar issues at some or all of the contractor’s other establishments.  In return, contractors will receive a five-year moratorium on compliance evaluations of some or all of their establishments. Continue Reading

OFCCP Rescinds Active Case Enforcement Procedures

Quick Hit:  Office of Federal Contractor Compliance Programs (“OFCCP”) has issued Directive 2019-01 (the “Directive”), which rescinds Directive 2011-01 which established OFCCP’s now-defunct Active Case Enforcement or “ACE” policy.  Through ACE, OFCCP conducted fewer but more intensive compliance evaluations of government contractors.  In issuing the Directive, OFCCP is formally ending ACE, while adopting an approach it contends keeps the better components of ACE while allowing OFCCP to conduct more compliance evaluations in a more efficient manner. Continue Reading

OFCCP Introduces New Directive Enhancing Compliance Guidance Programs For Contractors

Quick Hit:  The Office of Federal Contractor Compliance Programs (“OFCCP”) issued Directive 2019-03 (the “Directive”), which announces two steps the agency will take to enhance compliance assistance for contractors.  OFCCP will now make “certain Help Desk inquires and responses dynamically available and searchable as a self‐service option on OFCCP’s website.”  OFCCP will also begin using Opinion Letters to provide guidance to the contracting community in response to fact-specific inquiries from contractors and their employees.  The Directive envisions that these changes will provide a resource for contractors, thereby enhancing compliance. Continue Reading

OFCCP Seeks The “Carrot” Approach With Two Contractor Recognition Programs

Quick Hit: The Office of Federal Contractor Compliance Programs (“OFCCP”) is seeking to establish two new contractor recognition programs, which would promote contractors with sound compliance programs and provide temporary relief from compliance reviews and desk audits. First, OFCCP has proposed an Excellence in Disability Inclusion Award (the “Disability Inclusion Award”), which aims to “highlight successful practices and strategies of contractors that have expanded and improved recruitment, hiring, retention, and promotion opportunities for individuals with disabilities.” Continue Reading

Trump Administration OFCCP Continues To Obtain Large Recoveries From Contractors in FY18

Quick Hit: Data released by OFCCP shows the agency obtained $16.4 million in monetary relief for roughly 12,000 class members in FY 2018. While that is a drop from the record year recovery of $23.9 million in FY 2017, it is much higher than $10.5 million obtained in FY 2016 and $6 million obtained in FY 2015. In addition, based on statements  made by OFCCP Acting Director Craig Leen, FY 2019 could set new financial recovery records. Continue Reading

OFCCP Enters Into MOU With Employer Group

Quick Hit: OFCCP has entered into a memorandum of understanding (the “MOU ”) with the National Industry Liaison Group (the “NILG”), a non–profit employer association that focuses on affirmative action and equal employment opportunity. The MOU is aimed at facilitating communications between OFCCP and the NILG in an effort to improve contractor compliance with OFCCP requirements as well as providing a mechanism to share contractor concerns with the agency.

Key Takeaway: Since the beginning of the Trump Administration, OFCCP has repeatedly stated that it is interested in improving relations with the government contractor community, increasing transparency, and balancing its enforcement efforts with those aimed at assisting contractors achieve compliance with its regulations. The MOU appears to be another example of the agency formalizing this commitment. Although the MOU is a welcome development and one that could provide contractors with greater clarity about their OFCCP obligations while also leading to welcome changes to the manner in which OFCCP implements its regulations, time will tell whether this initiative results in real, tangible benefits for government contractors.

More Detail:

The OFCCP and NILG entered into the MOU on August 27, 2018. The stated purpose of the agreement is to provide “a vehicle for exchanging information, obtaining feedback, and receiving advice from contractors” in order to “support contractor education and training; enable voluntary compliance with OFCCP’s regulations; and minimize, to the extent feasible, the cost of compliance by contractors.”

Among the goals of the MOU are: (1) coordination by the two organizations at both the national and local levels; (2) examination of “compliance challenges experienced by contractors”; (3) exploring “options for minimizing and eliminating operational, organizational and attitudinal barriers” contractors believe are impeding affirmative action and equal employment opportunities in their workplaces; and (4) improving OFCCP’s contractor education compliance tools and resources.

In order to achieve these goals, the OFCCP has committed, among other things, to:

  • Attend one annual meeting with the NILG Board;
  • Provide input and participating in the NILG’s annual national conference;
  • Make representatives available for at least one regional or local ILG meeting in each OFCCP region annually;
  • Engage in “various outreach initiatives that encourage all contractors, including NILG and local ILG members, to provide constructive feedback on OFCCP’s compliance evaluation process, education, outreach, and compliance assistance activities. OFCCP may reflect a consideration of this feedback in the development of contractor–focused activities”;

The NILG’s commitments include:

  • Using the annual meeting with OFCCP’s national office to discuss contractor concerns regarding OFCCP’s evaluation process and improving training and education;
  • Working with OFCCP to work cooperatively with OFCCP regarding its annual NILG conference and local ILG meetings;
  • Informing its Board members and local ILG members of OFCCP initiatives, opportunities to provide OFCCP feedback, and OFCCP-sponsored compliance assistance programs;

OFCCP Proposes New FAAP Directive

The Office of Federal Contractor Compliance Programs (“OFCCP”) is seeking approval to change its Functional Affirmative Action Program  (“FAAP”) requirements. The proposed directive, for which comments are due by November 13, 2018, proposes sweeping changes to the current FAAP directive, with the stated aim of encouraging contractors to use FAAPs. Continue Reading

OFCCP Announces Contractor Recognition Program

The Office of Federal Contractor Compliance Programs (“OFCCP”) has announced though Directive 2018-06 (the “Directive”) the development of a Contractor Recognition Program, which aims to “recognize contractors with high-quality and high-performing compliance programs and initiatives.” The Contractor Recognition Program arises out of feedback the OFCCP received from the contracting community in 2017 and 2018.

While the Contractor Recognition Program is still under development, the Directive provides some indication as to what contractors can expect. The Directive states that the OFCCP is currently developing “a contractor recognition program that highlights implementable best or model contractor practices, a contractor mentoring program that uses contractors to help their peers improve compliance, and other initiatives that provide opportunities for contractors to collaborate or provide feedback to OFCCP on its compliance assistance efforts.”

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