OFCCP's New Active Case Enforcement Initiative

The new Active Case Enforcement (ACE) initiative of the Office of Federal Contract Compliance Programs
(OFCCP) is expected to lead to broader, more aggressive compliance investigations by the agency. OFCCP is the U.S. Department of Labor division charged with ensuring that federal contractors comply with Equal Employment Opportunity laws and Executive Orders.

ACE, which became effective Jan. 1, 2011, replaces OFCCP's Active Case Management (ACM) program. Whereas under ACM only the compliance review methodology was used, under ACE the OFCCP will use all of the compliance evaluation investigative methodologies specified in the regulations. These methodologies include the following:

• Compliance review ' a comprehensive analysis/evaluation of a contractor's hiring and employment practices and written affirmative action program, and of the results obtained via affirmative action efforts;
• Offsite review of records ' an analysis and evaluation of the affirmative action program (or any part thereof) and supporting documentation, and other documents related to the contractor's personnel policies and employment actions that may be relevant to a determination of whether the contractor complied with the requirements of Executive Order 11246, Section 503 of the Rehabilitation Act, and Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA);
• Compliance check ' a determination of whether a contractor has maintained records consistent with federal regulations; and
• Focused review ' an onsite review aimed at one or more components of a contractor's organization or one or more aspects of a contractor's employment practices.

Other key differences between the old ACM and new ACE procedures include the following:

• Under ACM, a full compliance review was conducted for every 50th federal contractor. Under ACE, a full compliance review will be conducted for every 25th contractor.
• Under ACM, a full desk audit was conducted when there were indicators of discrimination or in every 25th review. Under ACE, this occurs with every evaluation to ensure compliance with Executive Order 11246, Section 503 of the Rehabilitation Act, and the VEVRAA.
• Under ACM, the focus was on identifying cases with 10 or more affected class members. Under ACE, there is no affected-class minimum.
• If a full desk audit reveals no indicators of discrimination or other violations, the evaluation may proceed using the investigative method designated by the Federal Contractor Selection System. If indicators are identified, however, a compliance review will be done, regardless of the investigative method identified.

Indicators include the following:

• Statistical and anecdotal evidence of discrimination;
• Patterns of individual discrimination, patterns of systemic discrimination, and patterns of major technical violations, such as record-keeping deficiencies;
• Failure to maintain an affirmative action program; and
• Noncompliance with other labor and employment laws, such as wage and hour laws.

For a compliance review, the OFCCP will contact the Equal Employment Opportunity Commission, the state and/or local Fair Employment Practices Agency, and/or other labor and employment agencies. The OFCCP will use information received, along with its internal database, to review the contractor's three-year compliance history.

Conclusion

Even if a desk audit finds no indicators, the OFCCP may still conduct an onsite review if an evaluation has been designated as a “quality control” review or a focused review. An onsite review may also be done if a contractor's affirmative action program and/or the documentation supporting the program are insufficient for determining compliance. Contractors should note that the onsite review is not limited to the nature or scope of the indicators that may have triggered it. Rather, it may be comprehensive.

David S. Fryman is a partner in Ballard Spahr LLP's Litigation Department and a member of the Labor and Employment, Health Care, and Higher Education Groups. Farrah I. Gold is an associate in the same department and group.

The new Active Case Enforcement (ACE) initiative of the Office of Federal Contract Compliance Programs
(OFCCP) is expected to lead to broader, more aggressive compliance investigations by the agency. OFCCP is the U.S. Department of Labor division charged with ensuring that federal contractors comply with Equal Employment Opportunity laws and Executive Orders.

ACE, which became effective Jan. 1, 2011, replaces OFCCP's Active Case Management (ACM) program. Whereas under ACM only the compliance review methodology was used, under ACE the OFCCP will use all of the compliance evaluation investigative methodologies specified in the regulations. These methodologies include the following:

• Compliance review ' a comprehensive analysis/evaluation of a contractor's hiring and employment practices and written affirmative action program, and of the results obtained via affirmative action efforts;
• Offsite review of records ' an analysis and evaluation of the affirmative action program (or any part thereof) and supporting documentation, and other documents related to the contractor's personnel policies and employment actions that may be relevant to a determination of whether the contractor complied with the requirements of Executive Order 11246, Section 503 of the Rehabilitation Act, and Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA);
• Compliance check ' a determination of whether a contractor has maintained records consistent with federal regulations; and
• Focused review ' an onsite review aimed at one or more components of a contractor's organization or one or more aspects of a contractor's employment practices.

Other key differences between the old ACM and new ACE procedures include the following:

• Under ACM, a full compliance review was conducted for every 50th federal contractor. Under ACE, a full compliance review will be conducted for every 25th contractor.
• Under ACM, a full desk audit was conducted when there were indicators of discrimination or in every 25th review. Under ACE, this occurs with every evaluation to ensure compliance with Executive Order 11246, Section 503 of the Rehabilitation Act, and the VEVRAA.
• Under ACM, the focus was on identifying cases with 10 or more affected class members. Under ACE, there is no affected-class minimum.
• If a full desk audit reveals no indicators of discrimination or other violations, the evaluation may proceed using the investigative method designated by the Federal Contractor Selection System. If indicators are identified, however, a compliance review will be done, regardless of the investigative method identified.

Indicators include the following:

• Statistical and anecdotal evidence of discrimination;
• Patterns of individual discrimination, patterns of systemic discrimination, and patterns of major technical violations, such as record-keeping deficiencies;
• Failure to maintain an affirmative action program; and
• Noncompliance with other labor and employment laws, such as wage and hour laws.

For a compliance review, the OFCCP will contact the Equal Employment Opportunity Commission, the state and/or local Fair Employment Practices Agency, and/or other labor and employment agencies. The OFCCP will use information received, along with its internal database, to review the contractor's three-year compliance history.

Conclusion

Even if a desk audit finds no indicators, the OFCCP may still conduct an onsite review if an evaluation has been designated as a “quality control” review or a focused review. An onsite review may also be done if a contractor's affirmative action program and/or the documentation supporting the program are insufficient for determining compliance. Contractors should note that the onsite review is not limited to the nature or scope of the indicators that may have triggered it. Rather, it may be comprehensive.

David S. Fryman is a partner in Ballard Spahr LLP's Litigation Department and a member of the Labor and Employment, Health Care, and Higher Education Groups. Farrah I. Gold is an associate in the same department and group.