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How to Prepare for an OFCCP Audit

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This webinar provides current compliance audit trends and some helpful insight for preparing a strong response to an audit.

This webinar provides current compliance audit trends and some helpful insight for preparing a strong response to an audit.

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  • 1. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.May 6, 2013How to prepare for an OFCCP auditCandee J Chambers, SPHR, CAAPMgr, AAP/EEO Compliance
  • 2. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.2Background “For nearly 40 years, the rules have said thatcontractors simply need to make a ‘good faith’ effort torecruit and hire people with disabilities. Clearly, that’snot working.”- OFCCP Director Patricia Shiu “Sea change” in OFCCP’s enforcement.- OFCCP Director Patricia Shiu
  • 3. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.3OFCCP Regulatory AgendaRegulation StatusDate Expected(my best guess)Systemic CompensationStandardsRescinded 2/2013Directive 307 Issued 2/2013Protected Veterans Final Rule Fall, 2013Individuals withDisabilitiesFinal Rule 2014 or laterCompensation DataCollection ToolNPRM 2014 or laterSex DiscriminationGuidelinesNPRM Fall, 2013 or 2014Construction ContractorRegulationsNPRM Fall, 2013
  • 4. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.4New political appointments Sylvia Mathews Burwell confirmed as director of Officeof Management and Budget Prior president of Walmart Foundation Served as OMB deputy director in Clinton administration Prior OMB presided over three budget surpluses in a row Focus is on budget first Tom Perez nominated as new DOL Secretary Republicans threaten to block Senate HELP Committee vote pushed back until May 8
  • 5. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.5What does all this mean for federal contractors?CSALs recently issued How many will turn into actual audits? Will sequestration have any impact?Pre-notification of potential OFCCP audits OFCCP is giving you a heads-up Use this time effectivelyHow do you prepare? Internal audits Assume you received an actual audit letter
  • 6. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.6Preparing for an OFCCP audit Use the CSAL as it is intendedRun updated pay equity analysesLook at employees in job group and job title groupingsContinue to use 2% or $2,000 disparity analysisEnsure required posters are displayed in the facilities Outreach, outreach, outreachVeterans - FemalesPeople with Disabilities - Minorities
  • 7. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.7Preparing for an OFCCP audit Review all of your Direct Compliance reports, bymonth, for each location that received a CSAL Contact the individuals that receive the job postingsand build relationships with them Remember, OFCCP will contact them too What will they tell the Compliance Officer? Review your Direct Traffic reports and analyze yourtraffic flow Know how to get copies of job postings too
  • 8. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.8Direct Compliance report
  • 9. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.9Direct Traffic reportDOL site in partnershipwith Direct EmployersState Job Bank
  • 10. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.10VETcentral Job Posting Example
  • 11. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.11Outreach, outreach, outreach VERY IMPORTANT!!! Expand your outreach efforts and focus onveterans and people with disabilities Company webpage updates with particular focus onveterans and people with disabilities Career Fairs focusing on veterans or people withdisabilities Company Tours you have sponsored Meet and Greet/Open House events Wounded Warriors and Rehabilitation Services events
  • 12. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.12Outreach, outreach, outreach Good faith efforts aren’t enough anymore Keep track of all outreach – VERY IMPORTANT Relationships already built Activities/events in which you have participated Contacts made (or attempted) but not confirmed Last, but not least: Measure the effectiveness of your efforts If your efforts aren’t getting results, try something else
  • 13. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.13Outreach tracking tool example
  • 14. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.14OFCCP audit process What are the most important things contractors can doto ensure a successful outcome? Build a positive relationship with the CO Try to find something you might have in common Mention affiliation with an Industry Liaison Group Be pleasant in all discussions with the CO Notify everyone with a ‘need to know’ that an auditis underway – including Direct Employers! Send AAP within the 30-day time period
  • 15. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.15OFCCP audit process Be clear on all the regulations and/or recent initiatives Many COs are new and use checklists to know what toask for Some COs do not know the regulations and mayrequest something they do not have the authority torequest If this happens, reach out to those who can help ifyou continue having trouble Your AAP vendor Direct Employers NASWA
  • 16. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.16OFCCP audit approach today Recent OFCCP Experiences Compliance Officers will call and ask questions aboutcompensation Subjects discussed: Contractor’s compensation practices Factors that lead to compensation decisions andclassifications What the contractor considers total compensation (e.g.overtime, commissions, etc.)
  • 17. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.17OFCCP audit approach today Contractor will receive a follow-up letter from theauditor requesting the submission of additional datadiscussed during the call(s) Message here: Be VERY careful what you tell a Compliance Officer over thephone They are taking notes of what you are saying They can change their request based on what you tell them Only give them what they ask for – nothing more!!!
  • 18. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.18OFCCP requests for additional information Items currently being requested (which might create difficulties foryou in pulling this information): Years of relevant experience – what does relevant mean? Highest degree attained – for the job or in general? Year in which highest degree attained Market reference system used for the different salaries What does this mean? Start pulling this information now Most of this information does not exist in your HRIS OFCCP does not like delays
  • 19. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.19Pay equity analyses** Always use Attorney-Client Privilege ** Here’s the reason why: “In addition, we are requesting any internal compensationaudits you have performed as stated in CFR 60-2.17 (b) (3)and a list of all individuals involved in the compensationprocess” “Furthermore, please provide any additional information thatyou feel may better explain your company’s compensationsystem including other factors that influence compensation”
  • 20. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.20Best practices CEO and leadership support Annual Management meetings Accountability Safeguarding Data Integrity Awareness of changes in HRIS Employment Actions Match HRIS Frequent Monitoring of Employment Decisions & Follow Up Hands-On Relationships with Community Organizations Unbiased Internal Assessment (Mock Audit)
  • 21. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.21Final thoughts… Bottom Line: The culture today with the OFCCP is more of a ‘we vs. them’approach They have an expectation that they will find discrimination inone form or another in each audit Audits can extend for an unlimited period of time so the COcan revisit areas already discussed and agreed upon OFCCP is now acting as a true enforcement agency Contractors need to build relationships with their CO’s Remember, everyone should all have the same goal:Proving that companies are not discriminating!
  • 22. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.22Q&A
  • 23. © Copyright 2013, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CAREare trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners.23Thank you!

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