On September 17, 2008, the Deputy Assistant Secretary of Federal Contract Compliance signed a Directive changing the procedures to be used for auditing companies with non-construction contracts with the federal government.
As a result, federal contractors and subcontractors will likely see increased scrutiny and an increased number of on-site reviews by the Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”).
Prior to the new Directive, the vast majority of OFCCP compliance reviews involved an abbreviated desk audit and did not proceed to a full desk audit or an on-site review. Under that system, if no indicators of systemic discrimination were discovered as part of the initial desk audit, then the OFCCP would stop its review and issue a closure letter.
The new Directive adds to this approach by introducing a “quality control” program for the audit process. Under the new system, even in the absence of any indicator of systemic discrimination during the initial desk audit:
- Every 25th contractor selected for an audit will now undergo a full desk audit to ensure that the company is developing and maintaining its affirmative action plans and that it is tracking the required support data; and
- Every 50th contractor selected for an audit will now face a “full compliance review – including an on-site review.”
The new Directive can be reviewed on the OFCCP’s website.
The increased chance of an in-depth review by the OFCCP under this new program provides another incentive for federal contractors and subcontractors to diligently review their affirmative action plans and required support data in advance of an audit.
For assistance determining if your company is covered by OFCCP regulations, preparing affirmative action programs or defending your company during an OFCCP audit, please contact any member of McGuireWoods’ Labor & Employment or Employee Benefits groups.