Some 250 federal construction projects that have resulted from IIJA are under scrutiny by OFCCP.
Many of the infrastructure improvement projects that resulted from the mega bipartisan IIJA program will be under scrutiny this year by the Office of Federal Contract Compliance Programs (OFCCP). The agency is increasing its focus on companies receiving those IIJA federal monies. That means contractors on those projects need to don their best audit gear.
The OFCCP released a list of 250 construction contractors and subcontractors that the agency has on the audit radar. Those contractors will be sent an official scheduling letter as advance notice of their respective audit, to ensure companies are in compliance before the audit.
Keeping an Eye On the Audit
"The construction industry should monitor OFCCP's regulatory requirements for construction contractors," wrote Lisa Marsh, Jackson Lewis Law, which specializes in workplace law.
She said now is the time for contractors to review their company's compliance program with an eye to making improvements where necessary.
"Noncompliant contractors may face technical or discrimination violations and, in extreme circumstances, contract cancelation and debarment," said Marsh.
The OFCCP has a list of 16 mandatory affirmative action steps, contained in a guide published by the agency. Marsh points to five major categories included in OFCCP's Construction Contractors Technical Assistance Guide. These categories are recruitment practices, training, implementation of EEO policy, analyzing personnel activity and solicitations/contracts with subcontractors.
Specifically, diversity recruitment is one of the most frequently cited OFCCP audit violations, said Marsh.
"Many contractors rely on unions to fill construction jobs, and many are unaware of their requirement to separately engage in diversity recruitment."
She said in working closely with unions to engage diversity organizations, contractors can neglect their obligation to demonstrate compliance. These companies also must analyze their personnel activity to conform with Uniform Guidelines on Employee Selection Procedures.
The goal should be to ensure one race or gender is not adversely impacted by the contractor's hiring practices.
"This requires the contractor to not only solicit and maintain the gender and race of its employees, but to also track its applicants, including demographic information," said Marsh.
Other contractor requirements include posting notices in employee areas, and notifying OFCCP of certain subcontracts within 10 days, she said.
"Contractors with a $50,000 and $150,000 non-federally assisted contract must comply with OFCCP's regulations related to individuals with disabilities and protected veterans."
Mega Projects Under Microscope
The OFCCP also has certain high-dollar projects on its radar. The agency's Mega Construction Project Program was launched in March of this year.
The program includes 12 federally funded projects with a value of $35 million or more and a timeline of at least one year. After the spring announcement, OFCCP held a public information session to outline plans for working with contractors.
The agency intends to work throughout the project with the direct and subcontractors awarded these jobs.
"OFCCP will require the employer working on the selected Mega Projects to participate in EEO Committee meetings," said Marsh. "The meetings will include relevant unions, diversity recruitment organizations, and, potentially, other relevant government enforcement agencies."
The increased industry attention is part of a move by Director Jenny Yang, to reinvigorate OFCCP's oversight of affirmative action compliance efforts. The agency plans to engage contractors and subs at the pre-bid and post-bid stages to provide ongoing compliance assistance.
OFCCP also will evaluate contractors' efforts to recruit and utilize talent from underrepresented backgrounds.
"OFCCP touts these projects as examples of how involvement early and often can positively affect the community," according to Jackson Lewis Law. "With the launch of this new program, construction contractors on Mega Projects can expect their chances of being audited by OFCCP to spike."
Dissecting Audit Process
In evaluating contractors, OFCCP looks at all federal, federally assisted and non-federal construction projects across all counties in a geographic area. Understanding the OFCCP's requirements can help a contractor prepare for an audit and reduce the risk of costly settlements.
Human resources specialist Berkshire said OFCCP exists to ensure that the selected contractor is fulfilling contractual affirmative action program obligations. The agency wants to see regularly prepared plans, plan compliance with regulations, requisite data and complete annual data analyses.
"The OFCCP also reviews whether a contractor has engaged in any discriminatory hiring, promotion, termination or pay practices," wrote Berkshire.
This is done by evaluating detailed personnel activity and compensation data about all employees covered by the affirmative action plan under review.
"The agency recovers money from the contractor at fault to repay applicants and employees for missing back pay and salary adjustments."
The agency can require that contractors establish hiring goals as part of a resolution and can debar non-compliant contractors from federal contracting work.
Qualifying contractors are required to maintain up-to-date affirmative action plans and data regarding personnel decisions and other employment records. This data should be analyzed regularly to monitor for OFCCP compliance red flags, suggested Berkshire.
"Each employee must be included in the affirmative action program of the establishment at which he or she works."
Covered contractors have detailed recordkeeping obligations and must perform annual analyses of their personnel activity, according to Berkshire. That includes applicant, hiring, promotions, terminations and compensation systems. And contractors must evaluate workforce representation against expected availability to determine if annual placement goals should be established.
"Specific analyses also must be completed to evaluate a contractor's progress in meeting government-established utilization goals for individuals with disabilities and hiring benchmarks for protected veterans," said Berkshire.
Companies may conduct the necessary analyses and reports internally, or they may seek outside assistance.
"If you have limited resources or knowledge, our recommendation is to obtain guidance," said the labor law specialists. "Since these laws can be complex, expert interpretation is often needed."
Are You in Compliance?
Under its frequently asked questions section, the DOL explains the good-faith efforts construction contractors are required to take.
To increase participation of minorities and women in skilled trades, contractors must maintain a harassment-free work environment.
These good-faith efforts also include recruiting minorities and women, and developing on-the-job training for these workforce sectors. Contractors should develop and disseminate EEO policies and evaluate minorities and women for promotional opportunities.
Unintended discriminatory effects resulting from personnel practices should be constantly monitored.
"Contractors must document their good-faith efforts fully, which consist of the actions and steps they take to ensure the requirements are met," according to DOL.
Another question asks if a contractor is meeting all participation goals for minorities and women, can it assume it's not engaging in any discrimination. DOL's answer is "not necessarily." Participation goals are an important aspect of recruiting and developing a more diverse workforce, according to the agency.
"Contractors that meet these goals still need to assess their practices for possible employment discrimination," wrote the agency.
In determining whether employment discrimination has taken place, OFCCP examines how each minority group is affected by a contractor's practices.
"Executive Order 11246 prohibits discrimination on sexual orientation, gender identity, religion and on inquiring about, discussing and disclosing pay," said the agency.
Regulations prohibit contractors from discriminating on the basis of disability and protected veteran status if they hold a direct federal construction contract.
"Whether a contractor is meeting its participation goals for women and minorities has no bearing on whether it is engaging in discrimination on these other bases."
If employees or applicants experience discrimination in association with a federal construction contractor, what are potential scenarios for the contractor?
According to DOL, employees or applicants can file a complaint with OFCCP, EEOC or a state or local civil rights agency with jurisdiction. Additionally, if they are enrolled in a registered apprenticeship program, they can file a complaint with the apprenticeship registration agency.
"The registration agency may refer a complaint to OFCCP or to another enforcement agency, as appropriate," according to DOL.
What if a contractor fails to meet participation goals — is it in violation? "Not necessarily," is DOL's FAQ response. "Contractors must engage in outreach and other good-faith efforts to broaden the pool of qualified candidates to include minorities and women."
Good-faith efforts include monitoring the effectiveness of outreach and recruitment strategies in attracting diverse applicants.
Linking with different or additional referral sources in the event that recruitment efforts fail to produce a diverse pipeline of applicants is another positive move.
"The participation goals are not quotas, and no sanctions are imposed solely for failure to meet them," said DOL. "A contractor's compliance is measured by whether it has made good faith efforts to expand employment opportunities and break down barriers to employment for minorities and women."
Something else to think about: Accommodation request records required by contractors to maintain. Contractors are required to maintain records of requests related to pregnancy, childbirth, related medical conditions and religious practices and observances. In addition, direct federal contractors are required to maintain records of requests related to disabilities, including those from disabled veterans.
"Specifically, contractors should maintain documentation on requests made, relevant meetings and discussions held and final dispositions. OFCCP regulations require contractors to grant reasonable accommodation requests unless they can demonstrate that doing so would impose an ‘undue hardship' on the operation of its business." CEG
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