Following are statements extracted from an April 18 article by Ilyse Schuman at Littler Mendelson. Littler shareholder Alissa Horvitz testified at the subcommittee hearing that debated the merits of recent regulatory and enforcement initiatives established by the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP). Horvitz, testified that while the OFCCP’s mission is a laudable one that should be supported, many in the business community are becoming frustrated with the overly burdensome requirements that the agency imposes on federal contractors. Horvitz testified (pdf) that a number of employers are terminating their contracts with the federal government while others are deciding not to become government contractors because of the onerous compliance barriers imposed.
Horvitz also testified that the OFCCP needs to be more transparent. She noted that the agency has released a number of directives, including one that explains how compliance officers should evaluate compensation, but has never posted these directives on the agency’s website. Horvitz argued that if the OFCCP does not publish these directives, contractors have no guidance on how to evaluate their own pay data and perform self-audits. “How are companies who want to do the right thing and be in compliance, proactively, supposed to do that when OFCCP does not publish the directives it later enforces and without advising government contractors how to self-evaluate their own data?” She stated further that “it seems fundamentally contrary to notions of due process that companies could be accused of violating OFCCP’s regulations when the agency doing the enforcing has failed to identify the benchmarks and standards that companies should follow.”
Horvitz claimed that in her experience, the agency’s conduct during compliance reviews “is one of the principal reasons why more companies do not want to contract with the government. There is no current compliance manual that defines how audits ought to be conducted, which has led to OFCCP’s compliance officers conducting these audits very differently across OFCCP’s six regions.” In response to a question, Horvitz noted also that many businesses are becoming wary of doing business with federal contractors, as they could unwittingly become federal subcontractors subject to OFCCP jurisdiction.
Horvitz similarly criticized the OFCCP’s plan to create a “one-size-fits-all” approach to evaluating pay through a proposed compensation data tool.
Jeffrey Norris, President of the Equal Employment Advisory Council, echoed many of these points and discussed the OFCCP’s aggressive regulatory agenda, stating that the agency’s new efforts will “expand exponentially” the data that employers must provide to the government. With respect to the proposed new affirmative action requirements for veterans and individuals with disabilities, Norris claimed that these proposals:
"would transform a qualitative program based on situation-specific good faith efforts, equal opportunity, and respect for privacy of a person’s disability into a quantitative program based on federally mandated numeric targets, preferential treatment, ineffective and extraordinarily burdensome paperwork requirements, and invasive inquiries into the disability status of tens of millions of U.S. workers and job seekers each year"
As for compliance evaluations, Norris claimed that the changed data collection requirements have “expanded dramatically” the information that a contractor must submit at the beginning of the audit, and that the agency has consistently underestimated the burdens and costs associated with the proposed changes.
For example, Norris testified that the proposed rule change related to affirmative action requirements for individuals with disabilities will cost employers $2 billion in its first year of implementation, and at least $1.5 billion for each subsequent year. According to Norris, this cost estimate is more than 30 times the agency’s projection.
Moreover, in response to a question posed by Rep. Todd Rokita (R-IN), Norris explained that this proposed rule “is inconsistent with the underlying philosophy of the [Americans with Disabilities Act].” One of the purposes of the ADA, he claimed, is to ensure that an individual’s disability is kept a private matter unless divulging this information is necessary. Instead, Norris claimed, “what this proposal would do would be to feature one’s disability.”
Horvitz concluded her remarks by calling for the OFCCP to display a “greater willingness to be more objective” and be “less biased, and more conciliatory, especially when dealing with employers that truly are trying to do the right thing and be in compliance with the laws and regulations that OFCCP enforces.”
A complete list of panelists and links to their testimony and an archived webcast of the hearing can be found here.
