Labor Department Starting Federal Contractor Self-Audit Program

Under a new Labor Department program, some contractors will be able to self-audit their workplace anti-discrimination rules.

Under a newly announced Labor Department program, some Federal contractors will no longer need to fear mandatory on-site compliance evaluations to ensure that they are meeting Federal rules on diversity and non-discrimination of employees and job applicants.

Beginning in October 2019, a select group of Federal contractors will be allowed to voluntarily self-audit their enforcement of workplace anti-discrimination rules and affirmative action plans under a new plan titled the Voluntary Enterprise-wide Review Program (VERP).

Once accepted into VERP, contractors will not have to worry about being visited by Federal compliance evaluation staff for a period of three to five years.

Enforcement of workplace anti-discrimination rules for any company that does business with the Federal government falls under the jurisdiction of the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP).

From January 2017 through September 2018, OFCCP reports that it conducted compliance reviews for facilities employing more than 1 million workers, required companies to pay over $39 million to employees and job seekers who were discriminated against, and obtained over 1,200 job opportunities and salary adjustments for individuals who had suffered discrimination. 

Compliance program rules

OFCCP will expect contractors to maintain a workforce free of discrimination or other material violations, and provide periodic reports and information to OFCCP through which OFCCP can confirm these efforts.

Federal contractors must have policies in place to encourage workplace diversity and are not allowed to discriminate on the basis of race, color, sex, sexual orientation, gender identity, religion, national origin, disability, or status as a protected veteran.

In addition, Federal contractors are prohibited from discharging or otherwise discriminating against applicants or employees who inquire about, discuss or disclose their compensation or that of others, subject to certain limitations.

Companies found not in compliance can be required to pay back wages to individuals, offer job opportunities to rejected job applicants, and, in severe cases, can lose their Federal contracts.

OFCCP differs from enforcement by the Equal Employment Opportunity Commission (EEOC) because OFCCP does not have to wait for a complaint before beginning an investigation. Instead, OFCCP conducts periodic evaluations of Federal contractors and uncovers discrimination cases without requiring an employee or job applicant to bring a specific complaint to the agency’s attention.

VERP recognizes two tiers of contractors. The top tier will include top‐performing contractors with corporate‐wide model diversity and inclusion programs. Contractors qualifying for the top tier can remain in the program for a period of five years and be re‐evaluated to stay in the program at the five‐year mark.

The next tier will consist of OFCCP compliant contractors that will receive individualized compliance assistance to become top performers. Contractors qualifying for the second tier can remain in the program for three years and will receive individualized compliance assistance to become a top performer.

“The program is part of a broader effort by OFCCP to find innovative ways for ensuring Federal contractors comply with equal employment opportunity laws corporate-wide,” according to OFFCP Director Craig Leen. 

In November 2018, OFCCP issued a separate directive establishing early resolution procedures to allow OFCCP and contractors with multiple establishments to cooperatively resolve compliance reviews while achieving corporate-wide compliance with OFCCP’s requirements.

Individuals can check the OFCCP Class Member Locator if they believe they may have applied for a job or worked at a facility that has been impacted by OFCCP’s compliance evaluations and complaint investigations. Affected individuals may be eligible for back wages and/or consideration for job placement.

About the Author

Michael Wald is a public affairs consultant and writer based in the Atlanta area. He specializes in topics related to government and labor issues. Prior to his retirement from the U.S. Department of Labor, he served as the agency’s Southeast Regional Director of Public Affairs and Southeast Regional Economist.