How Effective is the OFCCP? The GAO Answers – Part I

The OFCCP often projects a larger than life presence in the consciousness of many federal contractors. How can it not? For FY 2016, the OFCCP had an annual operating budget of just over $105 million and was authorized 615 full-time equivalent staff positions.  While its staffing decreased from 755 authorized FTE positions in FY 2015 (an almost 19-percent decrease) its budget increased by about a half a million dollars. With its impressive budget and significant FTE authorization, with so many big-payout settlements of discrimination cases, with so many new regulations and data collection requirements, with seemingly so much stepped-up enforcement activities, it must really be making great strides in eradicating discriminatory hiring and employment practices by federal contractors. Not so, according to the General Accounting Office (GAO). The House of Representatives Committee on Education and the Workforce, and its Subcommittee on Workforce Protections requested the GAO to review the OFCCP’s performance. To say the least, those reviews were less than stellar. Since we assume this topic to be of great interest to our readers, we will devote the next few weeks to a series on the GAO’s findings, its recommendations, and, of course, we will also include our own recommended Best Practices. First, however, let’s get some background.

You may be aware that whereas the OFCCP’s activities aimed at ensuring non-discrimination have included outreach and compliance assistance (with AA laws and regulations) it chose to refocus its efforts on enforcement as of 2011. So, in Dr. Phil language, “How’s that working out” for them? Not well, according to the GAO. In order to detect violations, the OFCCP relies heavily upon Compliance Evaluations (aka “audits”). According to the GAO, the OFCCP conducts compliance evaluations on about 2 percent of all federal contractors, annually. Since 2010 about 78 percent of all evaluations found no violations, and about 2 percent indicated discriminatory practices.  Wouldn’t that just mean that contractors are doing a great job of complying with affirmative action laws and regulations? Not if the OFCCP’s means and methods are flawed – which, they are, according to the GAO.  More on that in a moment.

The OFCCP’s two approaches to ensure compliance with federal EEO and Affirmative Action requirements are enforcement and compliance assistance. We have already established however, that the bulk of the OFCCP’s emphasis since 2011 has been on enforcement, primarily by conducting Compliance Evaluations, which it in turn carries out primarily by using compliance officers to evaluate contractors. The OFCCP selects which contractors to review and then reviews those contractors’ hiring, promotion, compensation, termination and other employment practices, including recordkeeping. The evaluation may occur at the contractor’s facility which produces the goods or services. The facility can be a factory, office or store.

How does the OFCCP determine who it selects for review? In general it uses federal and commercial databases, along with “other factors”. Regional and district office staffing levels establish the basis for determining total number of contractors reviewed each year within the jurisdiction of the particular regional office. Moreover, based on the location of the establishment(s) to be reviewed, the local district office receives the scheduling list of contractors located in its jurisdiction. From there, several facially neutral factors, such as alphabetical order, employee count, contract value, contract expiration date, among other factors, determine further allocation or sorting. Many of you are aware of this process. We include it here, because the GAO raises concern about the selection process, which we will discuss momentarily.

One more general point about the OFCCP’s enforcement efforts: whereas through 2010 the OFCCP’s Compliance Evaluation process had been known as Active Case Management (ACM) the OFCCP changed its process to one of Active Case Enforcement (ACE). Why and what’s the difference? Perhaps we can best find that answer in the OFCCP’s own directive outlining ACE procedures. According to the OFCCP, ACM proved to be of “limited utility” because it could not effectively use all of its investigating tools, such as offsite review of records. The OFCCP therefore implemented the ACE process, which requires more comprehensive evaluations of each selective contractor. Presumably, the ACE model allows for a more proactive, if not aggressive approach. The ACE process includes, without limitation, ascertaining the presence of indicators of discrimination or violations that warrant an onsite investigation. Indicators might include patterns of individual and/or systemic discrimination, patterns of major technical violations such as recordkeeping deficiencies and failure to maintain an AAP, in addition to statistical and anecdotal evidence of discrimination. (Item: In 2015, close to 85% of evaluated contractors did not submit their AAP within 30 days of the OFCCP’s request and, in some cases, received extensions).

The GAO concluded that significant weaknesses in the OFCCP’s enforcement efforts render the OFCCP unable to truly assess the extent of federal contractor compliance. With the budget and staff devoted to objectives that the Obama Administration has identified as a high priority, how can that be? What are those weaknesses? The GAO, in its report identifies five key weaknesses. We will list them here:

1. Weakness in OFCCP’s process for selecting contractors for Compliance Evaluations makes it challenging to know the extent to which Equal Opportunity Requirements are followed;

2. OFCCP Relies on Voluntary Compliance with Requirements;

3. OFCCP’s Compliance Evaluation Assignment Process May Result in Geographic Imbalances;

4. Reported Inconsistencies in Compliance Evaluations May Be Exacerbated by Lack of Training;

5. Most Violations Are Resolved Through Conciliation

We’ll start with the analysis of the first deficiency, weaknesses in the selection process, and, over the next few weeks, address the others.

For more information, contact Ahmed Younies at 714-426-2918, x1 or ayounies@hrunlimitedinc.com.

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What the EEOC and OFCCP Want You to Know About Criminal Background Checks

What’s up with the EEOC, the OFCCP and criminal background checks? While the EEOC enforces anti-discrimination laws for private employers, and generally those who employ 15 or more employees, the OFCCP enforces affirmative action laws and regulations to which federal contractors are subject. Administering background checks to all applicants can’t be discriminatory, can it? If not, then why would employers even have to worry about the EEOC or the OFCCP when conducting background checks?

Let’s answer that question and some others:

Are former convicts a protected class under anti-discrimination laws?  No. Certain practices, although themselves neutral, may, by “hurting” a disproportionate number of   people protected under federal anti-discrimination laws, have a discriminatory impact. Those practices too would then be in violation of federal anti-discrimination laws.  The EEOC, citing studies show that African-Americans  and Hispanics have significantly more arrests and convictions,  takes the position that blanket exclusions of all applicants with criminal histories therefore has a discriminatory impact on African-Americans and Hispanics. The OFCCP has specifically stated that it follows the EEOC’s practices, and in Directive 306, explicitly adopted the EEOC position and practices with respect to use of arrest and conviction records in making hiring decisions.

Why do the EEOC and OFCCP get involved in this practice? Many employers are surprised to hear that the EEOC has issued position statements since at least 1987 on this very issue. Based on this position, it began investigating complaints relating to use of background checks when hiring, and filing lawsuits long before issuing its latest Enforcement Guidance last April. Again, the OFCCP has long followed EEOC practices with respect to this and many other anti-discrimination laws and measures.

Does this mean that employers can no longer conduct criminal background checks? No!  Employers can, and, in order to avoid harmful situations and negligent hiring suits, should, still conduct background checks. The EEOC’s Enforcement Guidance attempts to provide employers with some additional guidelines as to how and when to use the information contained in criminal background checks in making their hiring decisions. Prior to issuing its Enforcement Guidance, the EEOC provided more basic guidelines (which the Enforcement Guidance has incorporated) by telling employers to consider the following factors with respect to applicants and their criminal backgrounds:

1. The nature and gravity of the offense;
2. Time elapsed since the conviction and/or completion of sentence;
3. Nature of the job held or sought.

The EEOC, and federal court cases (the US Supreme Court has never decided this issue) also have held that a business necessity will justify exclusion of an applicant based on his or her criminal record. Simply put, if one’s criminal past is not relevant to the essential functions of a particular job or some other compelling business necessity, the employer should not exclude the applicant on that basis. For example, if Betty applies for a job as a bookkeeper and was convicted two years ago for embezzlement, that is relevant to the job. Rejecting her is justified even under the EEOC’s analysis and guidelines.  An employer might reject a man with a history of sexually assaulting women  for a job that would put him in proximity with a female employee late at night when no one else is around and be acting consistent with a business necessity. On the other hand, if Danny pleaded guilty to public drunkenness one time 7 years ago that may not be a justifiable basis for refusing him a job as an administrative assistant.

Since the OFCCP is all but in lock-step with the EEOC on this issue, federal contractors would do well to familiarize themselves with the EEOC’s Enforcement Guidance.

What then, does the EEOC’s Enforcement Guidance really change?  Given that the EEOC’s position and practices have been essentially the same for over 25 years, perhaps not much at all.  The Guidance over 46 pages long, mostly cites background, studies and reasoning for its position. The part of most practical interest to employers, the list of Employer Best Practices, is at the end of the Enforcement Guidance, and is as follows:

General:

• Eliminate policies or practices that exclude people from employment based on any criminal record. Employers cannot have blanket exclusions of those with criminal pasts. (So this is a blanket exclusion of blanket exclusions?? Maybe.)
• Train managers, hiring officials and decision makers about Title VII and its prohibition on employment discrimination. Title VII of the Civil Rights Act of 1964 is the law that prohibits employment discrimination against certain classes of people identified therein (i.e. “protected classes”). The EEOC wants employers to sensitize its managers to these laws, and how otherwise neutral practices can have a discriminatory impact on the people who Title VII is designed to protect. Ideally, training managers about Title VII and related laws should not be new.

Developing a Policy:

• Develop a narrowly tailored written policy and procedure for screening applicants and employees for criminal conduct (that does the following: )
  • Identify essential job requirements and the actual circumstances under which the jobs are performed.
  • Determine the specific offenses that may demonstrate unfitness for performing such jobs
  • Identify the criminal offenses based on all available evidence.
  • Determine the duration of exclusions for criminal conduct based on all available evidence.
  • Include an individualized assessment.
  • Record the justification for the policy and procedures.
  • Note and keep a record of consultations and research considered in crafting the policy and procedures.
• Train managers, hiring officials and decision makers on how to implement the policy and procedures consistent with Title VII.

In short, the EEOC and OFCCP want employers to implement policies that consider the relationship of the criminal offense(s) to the essential job requirements, especially if they are “old”, possible rehabilitation by the candidate, and whenever possible, to evaluate on a case by case basis. If an employer rejects an applicant based on criminal history, it should record the decision and the justification and, once it has created a policy and procedures, train those it expects to be implementing them. (NOTE: According to the EEOC, arrests alone are not themselves evidence of criminal conduct, though the underlying conduct leading to the arrest, if related to job functions or business necessity can be considered.)

Questions:

• When asking questions about criminal records, limit inquiries to records for which exclusion would be job-related for the position in question and consistent with business necessity.

Employers should, whenever possible, only ask about items related to the actual job or a specific business necessity. If the report refers to something that is not related to the job, the employer should not ask about it.

Confidentiality:

• Keep information about applicants’ and employees’ criminal records confidential. Only use if for the purpose for which it is intended.

This one seems self-explanatory.

Well, let’s stop here for now, and if you want to learn more about use of criminal background checks in the hiring process, make sure to attend our webinar on Thursday, November 10 at 10:30 a.m. PST, 1:30 p.m. EST.

For more information, contact Ahmed Younies at 800-708-3655, x703.

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