Federal Government Makes Changes to OFCCP in 2021

What changed for OFCCP in 2021?

Every business that has a contract with the federal government needs to be familiar with OFCCP and how its regulations continuously evolve. Designed to promote nondiscrimination, the set of regulations require written affirmative action plans, an internal audit and reporting system, and posters and notices, among other actions.

Since OFCCP regulations change often, particularly with the turnover of a new government administration, adherence can be quite complex - and an audit even more so. Here are some changes that happened in 2021:

New Director Announced in 2021
OFCCP named Jenny Yang as the new director of the agency in January 2021. Ms. Yang held previous leadership roles in this area, including with the U.S. Equal Employment Opportunity Commission (EEOC). OFCCP’s new leadership has created a focus that is more on enforcement of employee rights. During the first few months of this administration, there have been several developments regarding federal contractor affirmative action. Much of the focus has been on Executive Order 11246, which states that federal contractors cannot discriminate based on race, color, religion, sex, or national origin. It also requires government contractors to take affirmative action so that equal opportunity is provided in their employment practices.

OFCCP Changes Its Priorities
OFCCP is now concentrated on contractor compliance as well as enforcement against non-compliant contractors. OFCCP Director Yang has stated that the focus of the OFCCP under her leadership will be increasing overall enforcement as well as addressing pay equity and compensation discrimination. In order to do this, the OFCCP reportedly seeks to add more than 180 full-time employees to its staff, according to Holland and Knight. The agency will also concentrate its efforts on equity and compensation discrimination regarding employee fringe benefits and leave time. The OFCC will also be reviewing systemic and institutional bias when hiring.

Bringing OFCCP Into the Future
In August, the Office of Management and Budget (OMB) approved a new system. This new OFCCP Contractor Portal requires federal contractors to certify, on an annual basis, that they have current Affirmative Action Programs (AAPs) and (when applicable) submit AAPs via the portal. Contractors can reference information on the OFCCP Contractor Portal by visiting the OFCCP Contractor Portal. All federal contractors and federal subcontractors are required to certify by June 30, 2022.

In September, the OFCCP expressed its interest in the EEOC’s 2018 EEO-1 Component 2 pay data reports to address pay discrimination.

To Be Determined
Several key legal issues remain to be determined, according to law firm Holland & Knight:

  • To what extent federal contractors are responsible for the non-discrimination actions taken by subcontractors

  • If a company with a federal contract is considered one entity along with any parent company, subsidiaries, or affiliates, leading to affirmative action obligations for all parties

What Contractors Should Do
Because this is a complex and ever-changing area, federal contractors need to ensure legal compliance by evaluating their nondiscrimination action plan and reviewing any issues or potential liabilities. Every business must not only understand but comply with the regulations to avoid violations in the event of an audit. Stay tuned for more on the OFCCP’s regulatory landscape.

Disclaimer: this is not intended to offer legal advice. Secure legal counsel when ensuring government compliance.

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