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Avasthy - STAYING AFLOAT What to do When the Audit Waves Come Crashing?


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Office of Federal Contract Compliance Programs (OFCCP) Updates
•Developing Quality Data
•Analyzing and Presenting Data
•Communicating with the OFCCP
•Preparing for an On-site Visit

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Avasthy - STAYING AFLOAT What to do When the Audit Waves Come Crashing?

  1. 1. STAYING AFLOAT What to do When theAudit Waves Come Crashing?
  2. 2. AGENDA • Office of Federal Contract Compliance Programs (OFCCP) Updates • Developing Quality Data • Analyzing and Presenting Data • Communicating with the OFCCP • Preparing for an On-site Visit
  4. 4. MISSION OF THE OFCCPThe OFCCP supports four new Department ofLabor (DOL) outcome goals: • Breaking down barriers to fair and diverse workplaces so every worker’s contribution is respected • Narrowing wage and income inequality • Helping workers find a path into middle class jobs • Serve as a voice in the workplace
  5. 5. RELATIONSHIP WITH THE EEOCBoth agencies have similar missions: identifyorganizations that might be discriminating, and takeaction to remedy the situation • The OFCCP is now looking at individual cases of discrimination • The EEOC is now looking at systemic cases of discrimination • In the event of an audit, the OFCCP is asking to see all prior and current EEOC complaints
  6. 6. WHAT THIS MEANS FOR YOUExpect greater focus on: • Individual cases of discrimination in all personnel actions, particularly hiring and failure to promote • Compensation related matters • Outreach and recruitment of individuals with disabilities • Outreach and recruitment of Veterans
  7. 7. FISCAL UPDATE • The OFCCP’s proposed Fiscal Year (FY) 2012 budget reflects a $3.6 million increase from FY 2010 • The FY 2012 budget includes 786 full-time employees based on an aggressive enforcement plan • The FY 2012 budget will be used to implement the “Plan, Prevent, and Protect” initiative of the OFCCP
  8. 8. FISCAL UPDATE cont’d • OFCCP budget provision • In FY 2010 financial settlements totaled $9,750,272 in back pay for 12,937 workers. • In the first six months of FY 2011, the OFCCP had 44 financial conciliation agreements that include $5.66M and 657 job offers for 8,090 victims
  9. 9. ACTIVE CASE ENFORCEMENT (ACE) • Effective January 1, 2011, all Supply and Service (S&S) compliance evaluations scheduled from the Federal Contract Scheduling System (FCSS) are being processed under ACE procedures • The ACE procedures now take precedence
  10. 10. ACTIVE CASE ENFORCEMENT (ACE) • The OFCCP will use the FCSS to select all S&S for compliance evaluations • Identified establishments will be placed on a computer generated list developed by the National Office  The Regional/District/Area Offices are required to follow the list in sequential order
  11. 11. ACE COMPLIANCE REVIEW • Coinciding with the mailing of the scheduling letter, the OFCCP will contact the EEOC and the State or Local Fair Employment Practice agency to determine the nature, status, and outcome of any complaints that have been filed • The Compliance Officer (CO) will conduct a full desk audit in every compliance review
  12. 12. ACE COMPLIANCE REVIEW cont’d • Contractor’s compliance history • A determination will be made on whether an on-site review is needed
  13. 13. ACE COMPLIANCE REVIEW cont’d • On-site review • Minor technical violations with no indicators of potential discrimination should be remedied at this stage • If there are no issues the CO will issue a Closure for No Apparent Violations or Technical Violations
  14. 14. ACE COMPLIANCE REVIEW cont’d • Closure letter • Show cause letter
  15. 15. WHAT THIS MEANS FOR YOU • Potential for greater audit activity • Coordination between OFCCP and other agencies such as EEOC • Greater focus on technical compliance with affirmative action regulations including applicant compliance, recordkeeping, and monitoring • Outreach and recruitment of individuals with disabilities and Veterans
  16. 16. OFCCP COMPENSATION • The OFCCP submitted its ANPRM for “Non Discrimination in Compensation: Compensation Data Collection Tool” to the OMB’s Office of Information and Regulatory Affairs (OIRA) on February 18, 2011 • It is in the final stages of review and the OFCCP expects to publish it within the next few weeks
  17. 17. OFCCP COMPENSATION cont’d • Web-based OFCCP compensation data collection tool • The OFCCP is creating a web-based searchable database comprised of aggregated data from 70,000 to 110,000 contractors
  18. 18. OFCCP COMPENSATION cont’d • The OFCCP is looking at other personnel action data such as terminations and promotions by job group and demographic category, and whether data on Veteran status and disability would be included
  19. 19. THE NEW “THRESHOLD TEST” • Item 11 Current: Submission of total number of employees and total compensation by race and gender aggregated by job group, grade, or job title • In 2010, a new OFCCP internal directive for COs guidance on reviewing Item 11 was released
  20. 20. VETERANS & PERSONS WITHDISABILITIES • The current trend is putting emphasis back on Good Faith Efforts, but the focus now is on Veterans and individuals with disabilities rather than on minorities and females
  21. 21. VETERANS & PERSONS WITHDISABILITIES cont’d • Focus on outreach and results of efforts:  Proof of posting to unemployment offices and diversity websites  Evaluate number of candidates from these sources and the number of hires  The OFCCP is determining methods to statistically evaluate Veterans similar to minorities and females
  22. 22. EMPLOYMENT OF VETERANSIn an effort to monitor and enforce the employmentof Veterans, the OFCCP has asked the followingduring an audit: • Names of employees who have identified themselves as individuals with a disability, special disabled Veterans, and/or Veterans of the Vietnam Era.
  23. 23. EMPLOYMENT OF VETERANS cont’d • How many current employees identified as disabled and/or Veteran • Copies of jobs posted to state delivery service • Evidence of outreach for recruitment • Review of physical and mental job requirements • Do application forms request information on medical conditions or type of military discharge?
  24. 24. EMPLOYMENT OF INDIVIDUALSWITH A DISABILITY • Copy of the maternity leave policy • Review of physical and mental job requirements • Reasonable accommodation lists • List of applicants denied employment due to physical exam, along with copies of exams • Number of current employees identified as disabled • Evidence of outreach and recruitment for disabled
  25. 25. VETERANS NPRM • Significant analysis and recordkeeping obligations • Self-identification of applicants as “protected Veterans” • Analysis of recruitment and placement actions • Numerical targets to measure the effectiveness of affirmative action efforts • Establishment of annual hiring benchmarks • Final Rule anticipated in the spring of 2012
  26. 26. SECTION 503 NPRM • Under review at OMB • Publication in the Federal Register is due sometime next month (August 2011) • The OFCCP has declined to comment on the specifics of the NPRM
  27. 27. The Facts Behind a Successful AuditDATA IN REVIEW
  28. 28. AUDITS: POTENTIAL RISK • You are subject to audits of your…  Affirmative action plan  Hiring, termination, promotion, and compensation practices  Good faith efforts  Reasonable accommodations • Enforcement could end in debarment, conciliation agreement, financial remedies, and bad press
  29. 29. THE KEY TO ACCURATE DATA • Check all effective dates • Make sure internal applicants are in the applicant data • Terminated employees must be removed from the roster • Census codes should be reasonable • Availability weightings are appropriate • Job groups need to be created accurately
  30. 30. THE KEY TO ACCURATE DATA cont’d • Compensation data should be reported consistently • Confirm consistency of employee records • Geographic recruitment areas must be reflective of recruitment base • Review incumbents versus actual number of employment actions • Annotated employees should be accounted for across plans
  31. 31. THE AUDITOR’S POINT OF VIEW • Ensure data is complete and accurate • Review the submission package against the scheduling letter • Resolve any obvious issues • Review all results including compensation • Review the narrative • Overall technical compliance
  32. 32. APPLICANT DATA TRACKING • Develop your organization’s policy for expressing interest in a position • Review and update job descriptions for basic objective qualifications • Develop and implement an applicant tracking system • Conduct seminars and briefings to educate stakeholders on the definition of an applicant • Evaluate employment tests
  33. 33. STRATEGIES TO LIMIT LIABILITY • Evaluate your organization’s applicant process • Watch out for hires that cross time periods • Be aware of hires versus promotions or transfers:  How are you accounting for internal hires?
  34. 34. STRATEGIES TO LIMIT LIABILITYcont’d • Make sure the number of hired applicants and new hires match, and vice versa • The contractor has sole responsibility for applicant tracking  Produce records for themselves as well as those of the search firm
  35. 35. What to Submit to the OFCCPTHE SUBMISSION PACKET
  36. 36. THE AUDIT LETTER ARRIVES • Immediately contact: your CEO, HR representative, consultant (if applicable), and legal counsel • Seek confirmation regarding who will initiate and maintain primary contact with the auditor identified in the audit letter • Send a letter confirming acknowledgment of the audit to the auditor
  37. 37. THE AUDIT LETTER ARRIVES cont’d • Begin keeping records of all correspondence with the DOL: phone calls, emails, and letters • If you are a multi-site institution, confirm in your first contact which site(s) are subject to the audit • Evaluate the documents to be submitted:  Run Adverse Impact Analysis  Compensation Review  Review AAP results
  38. 38. THE AUDIT LETTER ARRIVES cont’d • Submit only the documents in the scheduling letter • Conduct a mock audit of your physical site and records
  39. 39. THE CURRENT SCHEDULINGLETTER • Departmental Profile • Placement Goals • Job Group Analysis • Goal Attainment • Availability Analysis • Transaction Summaries • Comparison of Incumbency vs. Estimated Availability
  40. 40. THE CURRENT SCHEDULINGLETTER cont’d • Minorities and Females Narrative • Individuals with Disabilities and Veterans Narrative • Past three years of EEO-1 Reports • Compensation Analysis • Collective Bargaining Agreement (if applicable)
  41. 41. THE PROPOSED SCHEDULINGLETTERThe OFCCP’s proposed changes to the Schedulingletter would require contractors to submit thefollowing: • Copies of all employment leave policies, including leave under the Family and Medical Leave Act, maternity leave, and religious accommodations
  42. 42. THE PROPOSED SCHEDULINGLETTER cont’d • Collective bargaining agreements including “any other documents you prepared such as policy statements, employee notices or handbooks, etc. that implement, explain, or elaborate on the provisions of the collective bargaining agreement”
  43. 43. THE PROPOSED SCHEDULINGLETTER cont’d • For all employment activity (applicants, hires, promotions, and terminations) detailed data by job group and by job title is required with the minority information broken out into specific racial categories • Copies of accommodation policies and records of accommodations granted to individuals with disabilities and covered Veterans
  44. 44. THE PROPOSED SCHEDULINGLETTER cont’d • Compensation data would be as of February 1, not the AAP date, and would list the following for each employee:  Gender  Race/ethnicity  Hire date  Job title
  45. 45. THE PROPOSED SCHEDULINGLETTER cont’d  EEO-1 category and job group  Compensation: “base salary, wage rate, and hours worked,” and requires that “other compensation or adjustments to salary such as bonuses, incentives, commissions, merit increases, locality pay, or overtime” be listed separately
  46. 46. How to Maximize your Possibility of a Favorable OutcomeANALYZING & PRESENTINGDATA
  47. 47. OFCCP RED FLAGS • Statistically significant adverse impact • Lack of good faith efforts • Failure to keep records • Lack of monitoring of personnel actions and compensation • Failure to follow company policies • Technical issues with AAP
  48. 48. How to Effectively Communicate with the OFCCP Before, During,and After an On-site AuditEFFECTIVE PARTNERSHIPS
  49. 49. OFCCP PARTNERSHIPS • Participate in industry liaison groups • Establish one point of contact • Keep a positive business oriented approach • Respond within a timely manner • Ask for all additional requests to be placed in writing and maintain records of requests • Be prepared for all questions—review your data first and take corrective action
  50. 50. How to Prepare Your Company for an On-site AuditINTERNAL COMMUNICATION
  51. 51. PREPARING FOR AN ON-SITE • Confirm a date for the on-site only after you are assured the president will be available for an initial required meeting with the auditor • Read the affirmative action regulations • Get to know your compliance officer(s) • Don’t admit violations without professional advice; use legal counsel and other experts as needed
  52. 52. PREPARING FOR AN ON-SITE cont’d • As soon as an on-site date is confirmed, notify your key administrators:  Explain the why, what, and how of an on-site.  Seek assurance of full cooperation, including access to any personnel or paperwork the auditor may request while on campus
  53. 53. PREPARING FOR AN ON-SITE cont’d • Determine location of auditor’s work area and key contact person—communicate strategy for creating “ghost” file of documents copied or the CO  Confirm with your IT staff access to the internet  Identify a location close to your office and HR department  Identify rooms in which interviews with employees can be conducted
  54. 54. PREPARING FOR AN ON-SITE cont’d • Complete final review of plans • Review and summarize pending EEO and other formal complaints • Review personnel files, applications, résumés, employment ads, position descriptions, and policy manuals for compliance • Review salary structure and factors affecting pay—perform salary research and complete a written report explaining differences in pay
  55. 55. PREPARING FOR AN ON-SITE cont’d • Plan a tour of the facility to identify visible strengths and potential issues • Check your VETS-100/VETS-100A form • Review I-9 forms—the OFCCP no longer reviews onsite • Follow up on any outstanding requests the auditor makes for additional materials
  56. 56. PREPARING FOR AN ON-SITE cont’d • Prepare for interviews  Management—company representative allowed  Employees—company representative at discretion of employee • Immediately summarize, with help of legal counsel, any areas of concern that may have emerged in conversation with the auditor(s)
  57. 57. PREPARING FOR AN ON-SITE cont’d • The determination letter may arrive approximately one month from the last day of the on-site, but not guaranteed • Be prepared for possible findings of violations • Seek clarification through legal counsel office • Remember—you have the power to negotiate
  58. 58. SESSION RECAP • OFCCP Updates • Developing Quality Data • Analyzing and Presenting Data • Communicating with the OFCCP • Preparing the Company for an On-site
  59. 59. Questions?THANK YOU