September 14, 2020 - Coronavirus (COVID-19)

OFCCP Issues New List of Advance Audit Notices

On September 11, 2020, the Office of Federal Contract Compliance Programs (OFCCP) released a list of nearly 900 federal supply and service contractors and subcontractors that it will be sending Corporate Scheduling Announcement Letters (CSALs) to for potential audits of over 2,200 contractor establishments. For the first time, the CSAL list includes audits focusing on contractors’ promotion practices and accommodations of individuals with disabilities. The list reveals that OFCCP will be sending CSALs for various types of compliance reviews, including:

  • 402 Establishment Compliance Reviews;
  • 31 FAAP Reviews;
  • 67 Corporate Management Compliance Evaluations;
  • 500 Compliance Checks;
  • 500 Accommodation Focused Reviews;
  • 500 Promotion Focused Reviews; and
  • 250 Section 503 Focused Reviews.

Proactive Steps If Your Company Is On the CSAL List

  • Timeline for Potential Audit: OFCCP sends CSALs to service and supply contractors as a courtesy to let them know that one or more of their establishments may be scheduled for an OFCCP audit. CSALs provide contractors with at least 45-days advance notice to prepare for the compliance review. Although receipt of a CSAL does not necessarily mean that a contractor’s establishment has been selected for an audit, contractors receiving CSALs are typically scheduled for an OFCCP audit.
  • Notify Relevant Staff to Watch for CSALs: CSALs are typically sent to the HR Director (or designated point of contact) at the establishment on OFCCP’s CSAL list. As these individuals are not always responsible for the contractor’s affirmative action compliance (or even aware of the contractor’s affirmative action obligations), contractors should notify HR personnel and other designated points of contact at their establishments to keep a lookout for those notices in the next few weeks.
  • Prepare for Audit upon Receipt of CSAL: Contractors that receive CSALs should take advantage of the advance notice by immediately reviewing their affirmative action practices in preparation for a potential audit. Investing ample time up front to have a good initial submission can potentially save significant costs in defending an audit and avoid unnecessary adverse findings. The review should generally begin with determining which type of compliance review will be conducted (i.e., establishment review, compliance check, accommodation focused review, etc.) and then using the applicable OFCCP scheduling letter as a guide for preparing the initial submission, should the contractor be selected for an audit. In addition, if the review requires submission of the contractor’s affirmative action plan (AAP), the contractor should ensure its AAP is completely compliant and ready for review. Contractors should also review other compliance areas, including their outreach and recruitment efforts, compliance with notice posting and job listing requirements, and accommodation practices.
  • Pay Close Attention to Areas Showing Adverse Impact: OFCCP has been very effective at pursuing and settling systemic discrimination cases in the last few years. In many instances, the best defense to these claims is having a good offense. If a contractor has potential indicators of discrimination for hiring, promotions, terminations, or compensation, it should immediately analyze those areas, under the attorney-client privilege, to ensure that the data and similarly situated employee groupings (SSEGs) underlying those indicators are accurate or that the contractor has legitimate explanations for those indicators.
  • Do Not Expect Extensions for Responding to the Scheduling Letter: Contractors have 30 days from the date they receive a scheduling letter to provide OFCCP the items requested in the itemized listing attached to the scheduling letter, which usually includes a request for a copy of the contractors’ AAP for the establishment under review. Under the current administration, unless there are extraordinary circumstances, OFCCP usually will provide a one-time extension of the 30-day period for data supporting the AAP only if: (1) the contractor requests the extension before the 30-day period expires; and (2) the contractor timely submits its AAP narrative (non-data portion) within the 30-day period of receiving the scheduling letter.
  • No CSAL Does Not Mean No Audit: Contractors should not assume they are safe merely because they have not received a CSAL. OFCCP is not required to send CSALs. A contractor may be scheduled for a compliance review even if it did not receive a CSAL. It is also possible for a contractor to be scheduled for a compliance review at a location that did not receive a CSAL.

Andrew Turnbull routinely assists contractors with preparing for and defending OFCCP audits. If you have any questions about this alert, he can be reached at aturnbull@mofo.com.