OFCCP Audits

5REASONSTHEY FAIL

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OFCCP Audits 5 Reasons They FailCompliance Expectations Are High

While the exact selection process for which Federal Contractors are selected for OFCCP (Office for Federal Contract Compliance Programs) audits is some-what of a mystery, we do know that audits have reached a new intensity.

What is known about OFCCP audits is:

• There are two different types • Desk audit • Onsite audit

• Revised OFCCP audit letter launched in 2014 is effective through June 2019

• Increase in number of items requested from 11 to 22

• Contractors still have only a 30 day turnaround

• Currently audits average 18-24 months in duration

• Increased items based on March 2014 regulations heavily focused on Section 503 and VEVRAA

Should Federal contractors be found non-compliant, they run the risk of violations, monetary settlements, suspension, and in some cases debarment.

Let’s look at the 5 main reasons audits fail.

OFCCP Audits – 5 Reasons They Fail

5Not Staying On Top of Regulatory ChangesKnow Your Benchmarks and Executive Orders

OFCCP regulations and updates, new and amendments to existing Executive Orders can occur at any given time. Do you and your team have a plan in place for staying abreast of this ever-changing information? Regular communication is key! Perhaps you receive your compliance updates from vendor newsletters or read law firms blogs or even follow Human Resource/Labor relations experts on social media...have a process in place to keep your organization “in the know.”

If you have been able to keep up with all the recent updates, I bet your head is still spinning. Seems like there already has been so many, just in 2016 alone.

Here’s a quick list of some recent rulings you should be aware of as of October 2016:

• VEVVRA hiring benchmarks and Section 503 Utilization Goals

• Executive Order 13658 Minimum Wage change

• Executive Order 13665 Prohibition Against Pay Secrecy Policies & Retaliation

• Executive Order 13673 Fair Pay & Safe Workplace

• Executive Order 13706 Paid Sick Leave (pending)

It is your responsibility to keep up with your organization’s data and make efforts to be compliant with all the mandated requirements. Even if you have contracts with outside vendors and recruiting agencies...it is your obligation to stay on top of all relevant data.

Keep up with regulations and stay compliant!

OFCCP Audits – 5 Reasons They Fail

4Not Reviewing Your Data RegularlyWhen’s the Last Time You Looked at Your Stats?

Why risk putting your organization between a rock and a hard place? Not reviewing your data on a regular basis will place your right there, especially when your company is facing an OFCCP audit. When that “letter” arrives and there is only a 30-day turnaround, you’ll quickly be regretting waiting that 12-16 months to do your AAP. So if you insist on waiting for “the letter” to get you motivated, know that your chances of failing an audit and receiving violations or fines will rise.

Data you should be regularly reviewing include:

• Applicant flow

• New hires

• Terminations

• Promotions

• Progress to goals

• Job descriptions

• Effectiveness of outreach

Personnel data should be reviewed at minimum every 6 months to assure that records and data are being maintained correctly. Additionally, the burden of proof regarding outreach lies with you. Violations are readily given because of ineffective outreach. You must be able to prove, by your record keeping, that you have established a relationship with local Veterans and IWD (Individual with Disability) organizations. If your not receiving the expected candidates, you’ll need tor reach out to an alternate community

OFCCP Audits – 5 Reasons They Fail

3Not Conducting A Compensation ReviewWouldn’t Suggest Waiting Until the Audit to do This!

Pay equity has been a hot-button issue, of late, with lots of recent media coverage and EEOC & OFCCP focus. This required review, reinforced by Directive 307, can assure that your organization is correctly addressing starting salaries and can often reveal any hiring retention issues.

Additionally, your company should be able to supply genuine business reasons for wage differences. A com-plete analysis should be done at the start of your plan year and with as much attorney/client privilege as allowed by law. It is also pertinent to make certain that you incorporate how starting pay, bonuses, overtime and merit increases are established and applied.

OFCCP Audits – 5 Reasons They Fail

2Confusion About “Job Seeker” vs “Applicant”Hiring Team Should Be Clear on the Difference!

When is someone a job seeker and at what point do they cross over into becoming an applicant? This distinction should be of high importance when training your managers and recruiters. It is crucial to be clear on this matter and be prepared for when things move quickly, during hiring mode. It should be best practice to know the difference and maintain good defendable reasons for candidate rejection, not-interview or non-hires.

Poor record keeping that often occurs when you are in busy mode or there is HR, recruiter or manager turnover can lead to the perception of discrimination. OFCCP issued the ‘internet applicant’ regulations in 2006, although confusion still surrounds the protocol.

These 4 requirements must be met by the job seeker before they can be consider an Internet applicant and then must be included on to the Applicant Flow data log:

• Individual submits expression of interest in employment through the Internet or related electronic data technologies

• Contractor considers individual for employment in a particular position

• Individual’s expression of interest indicates individual possesses basic qualifications for position

• Individual at no point in the contractor’s selection process prior to receiving an offer of employment

from contractor, removes him/herself from further consideration or otherwise indicates that he/she is no longer interested in the position

Using a non-discriminatory data management technique to control the number of job seekers you review for each position is important. Your applicant flow data log should be reviewed on a regular basis to assure it contains not only all of the needed self-identification information but all of the other required data, too.

Good record keeping is your compliance proof!

OFCCP Audits – 5 Reasons They Fail

1Poor or Non-Existent RecordsGood Documentation is the Only Way to Prove Compliance

Remember: A contractor is presumed non-compliant unless, by their record keeping, they can prove compliance. Documentation is the only way you and your organization are going to be able to confirm that established policies for compliance are being regularly followed and that management is also applying them consistently. One specific area that catches a red flag is when hurried managers rate everyone equally, all are stellar employees but the male and female increases are not the same. What will be your explanation when those records are reviewed?

It’s essential to train your managers on the importance of taking their time to write down non-discriminatory reasons and maintain good records of every personnel decision they make. Training

on the importance of defendable records, how to review and dispose of applicants and good interview skills is one of the best investments a company can make toward compliance. Train your HR staff, your recruiters, your hiring team. Everyone should know what the OFCCP regulations and requirements are and the importance of implementing best practices to remain and maintain compliance in order not to jeopardize your contracts.

Keep good records, review your data on a regular basis and train your staff!

OFCCP Audits – 5 Reasons They Fail

Every record they create – or fail to create – will either help the company or sink the company during an OFCCP audit.”

GRACE CONTIEXECUTIVE VP & DIRECTOR of AAP COMPLIANCEPORTNOY, MESSINGER, PEARL & ASSOC, INC.“

NEED TO KNOW MORE?Do you still have questions about OFCCP audits?

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