Here’s the second in our series of “Eye on the Election” posts which are focused on helping employers prepare for post-election changes, no matter who is elected.
Eye on the Election
For today’s topic of likely changes to affirmative action after the election, we turned to Susan Schoenfeld, J.D., Senior Legal Editor for BLR’s human resources and employment law publications.
Schoenfeld was formerly an attorney with the Civil Rights Division at the U.S. Department of Labor (DOL) in Washington, D.C., where she advised federal agencies, drafted regulations, conducted inspector training courses, and litigated cases for DOL.
Here’s Schoenfeld’s take on the future of affirmative action:
President Obama and Mitt Romney agree. Change is needed for affirmative action requirements placed on federal government contractors. However, the agreement ends there.
Based on the many new requirements and programs implemented by President Obama in the last four years, he and his administration believe that a robust regulatory program and active enforcement of affirmative action requirements is necessary for program success. Presidential candidate Mitt Romney appears to have a different approach.
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The Obama administration has brought unprecedented levels of change to federal contractors and their affirmative action obligations. Prior to Mr. Obama’s election in 2008, affirmative action laws, which require covered federal government contractors to make proactive efforts to employ certain protected classes of individuals (i.e., women, minorities, disabled individuals and certain veterans) in the workplace at levels comparable to those for unprotected groups, had remained relatively unchanged since Executive Order 11246 was signed into force in 1965.
Key changes to affirmative action already made under President Obama’s watch include:
- A new active case enforcement (ACE) system
- Increased enforcement activity
- New NLRA notice requirements
- Changes to functional affirmative action plan (FAAP) requirements
- New executive compensation reporting requirements for certain contracts
In addition, in the past two years, the Office of Federal Contract Compliance Programs (OFCCP), the agency that enforces the rules and regulations for federal government contractors, received an unprecedented increase in funding to hire more inspectors and conduct more audits at contractors’ worksites.
If President Obama Is Re-Elected …
The Obama administration’s most recent proposed changes signal the way in which the administration would continue, should the President be re-elected. OFCCP’s Notice of Proposed Rulemaking (NPRM) contains proposed changes that would alter the way in which federal contractors and subcontractors would be required to act with regard recruiting and training disabled individuals and veterans, as well as compliance with recordkeeping and policy requirements.
Under the proposed rules, covered contractors would be required to take affirmative action measures for disabled individuals and veterans similar to those required for women and minorities.
Most notably, the NPRM proposes a “utilization goal” of 7 percent for the employment of individuals with disabilities in each job group of the contractor’s workforce. In lieu of a single national utilization goal, OFCCP proposes a 4 percent and 10 percent “utilization range.”
This particular proposed change has raised a considerable amount of opposition from the contractor community. Objections to the proposed rule range from a lack of reliable data regarding availability to the cost of implementation.
In addition to the changes affecting veterans and disabled individuals, the OFCCP has also indicated that it wishes to develop and implement a new compensation data collection tool. Possible uses of the data collected include providing insight into potential problems of compensation discrimination at the establishment level, conducting analyses at the establishment level, and identifying and analyzing industry trends.
It is still unclear what the new tool might look like, but it will most require an annual filing, include web-upload capability, and be broader in scope than the older, now defunct EO survey. As many contractors recall, the EO survey was extremely burdensome to complete and did not effectively help contractors or the OFCCP evaluate whether contractors were successfully implementing their affirmative action plans.
Contractors are worried that the new tool could require more detailed information than in the past and that they might have to turn over detailed pay data into a system that they do not control, raising concerns about competitiveness, trade secrets, and confidentiality. Plus, the data they provide could trigger an audit.
It is unlikely that contractors would be required to use a new compensation tool before the beginning of 2014, unless the OFCCP has a way to expedite the rulemaking process.
If Mitt Romney is Elected …
Although Mitt Romney had not spoken too much about affirmative action for federal government contractors during his presidential campaign, it is clear from his published regulatory plan that he will move to decrease what he calls the “hidden tax” of regulations on business. Romney has vowed to decrease what his plan calls “the over regulation of American business.”
Under Romney’s plan, he would establish “firm limits” on regulation and “swiftly tear down the vast edifice of regulations the Obama administration has imposed on the economy.” For any new regulations, Mr. Romney’s stated plan would be to impose a regulatory cap of zero dollars on all federal agencies and to require congressional approval of all new “major” regulations.
In 2003, shortly after then-Governor Romney took office in Massachusetts, he issued an executive order eliminating the state’s Office of Affirmative Action, which required executive agencies to have civil rights officers in charge of monitoring the hiring of minorities, women and people with disabilities. Instead, a state diversity office was created, as well as a special advisory panel that included minority and civil rights leaders to recommend changes.
The changes were controversial and not warmly received by civil rights and minority advocacy groups. When Governor Duval Patrick took the Governor’s office in 2007, he reinstated the previous affirmative action policies and systems.
No doubt, the outcome of the presidential election will impact the nature and course of affirmative action for federal government contractors, as well as the timeframe in which any regulatory changes are made, or if they are made at all.
There are way too many regulations on all businesses, but especially small business. Crossing that fine line from 49 to 50 employees when so many regulations go into effect can be devastating to small a contractor or sub-contractor on government contracts. It is understandable why some companies make the choice to not grow.
In order to audit fairly all contractors to comply with affirmative action plan, we need to regulate. If not, as in many cases, there is fraud and abuse in spending TAXed monies.
Yes, it requires much effort on the contractors to comply; this is the cost of business. Having said that, honest and patriotic contractors do the right things and so it does not effect negatively their business growth.
To Keep fraudulent practices out of contracting requires regulations in the court of law!
People who think that government can bring about “fairness” are sadly mistaken. Remember when you were a child and a thief got away with taking something of yours, or a friend or relative died of a disease or condition for which medicine had no cure at the time? You said to your mom, “It’s not fair that our relative died of cancer when my friend’s dad was cured of it.” Guess what folks, nothing has changed. We are not entitled in this country to anything more than an equal shot. In the meantime, when have you ever seen the government succeed where competitive business has failed. Not even the military can boast success where competition failed. That’s why the government uses outside firms to achieve their goals so often.