The Office of Federal Contract Compliance Programs (OFCCP) recently expanded the data requests in its Supply and Service Scheduling Letter and Itemized Listing, the letter it sends to federal contractors requiring submission of data within 30 days to kick off an affirmative action audit. The letter applies to OFCCP compliance reviews scheduled on or after August 24, 2023. It contains a list of 26 items that covered employers must submit in response to a scheduling letter. The agency also released Frequently Asked Questions (FAQs) with further guidance on the letter. Significant changes include:
Item 7 (correcting problem areas): For the Executive Order 11246 affirmative action plan (AAP), which addresses race/ethnicity and gender, the letter imposes a new requirement to “provide documentation demonstrating the development and execution of action-oriented programs designed to correct any problem areas identified” (such as adverse impact in personnel decisions).
Item 19 (compensation): Employers will now be required to submit two sets of employee compensation data—one as of the start date of the current AAP (which has historically been required) and one as of a year earlier (new requirement). It’s unclear how the agency will compare these two sets of data.
Item 21 (selection methods): Employers must provide information about any “policies, practices, or systems used to recruit, screen, and hire, including the use of artificial intelligence, algorithms, automated systems or other technology-based selection procedures.” This is a new requirement.
Item 22 (compensation analysis): Employers must provide documentation that they have satisfied their duty under the affirmative action regulations to evaluate their “compensation system(s) to determine whether there are gender-, race-, or ethnicity-based disparities.” The documentation must include: (1) when the analysis was completed; (2) the number of employees included in the analysis and the number and categories of employees (if any) who were excluded; (3) what forms of pay were analyzed; (4) verification that the employer analyzed compensation by gender, race, and ethnicity; and (5) the method of analysis.
Tips: Despite the significant expansion of data that employers must submit in response to a scheduling letter, the OFCCP left the 30-day submission deadline intact. Meeting that deadline was already a challenge in the past, so federal contractors should expect an even more difficult, intense 30 days of work to gather the data required. For companies that use Vigilant to prepare their written AAPs, Vigilant addresses the compensation analysis requirement by conducting the simplest possible “check the box” review – a “cohort” analysis, in which we compare the pay of individual employees with the same job title but different race/ethnicity or gender. A truly thorough and insightful compensation analysis should be conducted by experts with statistical knowledge under the direction of an attorney, so the results are protected by attorney-client privilege (and not shared with OFCCP). If you’re interested in pursuing a rigorous compensation analysis, your Vigilant affirmative action representative or Vigilant Law Group employment attorney will be happy to make a referral.
