HR Management & Compliance

Affirmative Action: Government Clarifies New Federal Contractor Audit Rules

If you contract with the federal government to sell or buy goods or services, you may be covered by detailed affirmative action and non-discrimination rules that are enforced by the Office of Federal Contract Compliance Programs (OFCCP). If so, you’re required to retain a broad array of employment records, and the OFCCP can audit your recordkeeping and employment practices at any time.Last year, the OFCCP revised its regulations to allow for streamlined audits of federal contractors in some situations. Now, the agency has issued new instructions to its staff concerning one particular type of audit. These guidelines provide insight into what goes on when the OFCCP comes knocking on your door.Streamlined AuditsUntil last year, OFCCP compliance reviews were full-scale, one-size-fits-all procedures in which the agency would conduct a comprehensive audit of each aspect of your employment practices. These highly detailed and costly reviews could take up to one year to complete. But regulations passed in 1998 provide the OFCCP with three additional methods for reviewing contractor compliance: an on-site compliance check of your records; a focused on-site review of one or more of your employment practices; or an off-site review of your records.


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Compliance Check Overview

In its new guidelines, the OFCCP describes how its agents should conduct the so-called record compliance checks that look to see if contractors are maintaining certain required documents. The agency completed a pilot program using the new guidelines last fall, and Edward Collins of the OFCCP told CEA that district offices are anticipating receiving the go-ahead to resume record compliance checks sometime this year. Here’s an overview of how this new type of audit is expected to work:

  • Scheduling. Computers will randomly pick contractors for record-compliance checks. If you’re selected, you’ll receive a scheduling letter that can provide as little as three working days’ notice for the inspection. Sometimes the agency will call before sending the scheduling letter to work out a mutually convenient date for the inspection. The scheduling letter will spell out which documents you should have available.
  • Scope. During the on-site review, which should take approximately 30 minutes, the OFCCP officer will examine only three types of documents: 1) a report of the results under your prior year’s Affirmative Action Program; 2) examples of your job advertisements, including listings with the Employment Development Department; and 3) examples of accommodations you have made for persons with disabilities. Other documents, such as Vets-100 and EEO-1 reports, will not be inspected. The investigator’s purpose is to determine whether the documents have been properly maintained, not whether they satisfy your affirmative action obligations-although the officer must note any obvious violations that are discovered.
  • Closure letter. After the compliance check, you will receive a closure letter informing you of the outcome. It will state either that no records were missing, that records were missing and you were advised to remedy the problem, or that you failed to allow access for the inspection. If you refuse to cooperate with the records review, you may be hit with a full-fledged, detailed compliance evaluation.

Additional Rules Expected

The new OFCCP guidelines deal only with records maintenance, even though the regulations provide for compliance checks that address other types of contractor obligations as well. Additional guidelines for these other compliance checks are expected in the future.

For More Information

For further details about your obligations, contact the OFCCP in San Francisco at (415) 975-4720 or in Los Angeles at (310) 235-6800.

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