Compliance Review

MANAGEMENT MOXIE Nimble News

A COMPLIANCE EVALUATION – IS YOUR COMPANY READY?

FEDERAL CONTRACTS AND THE OFCCP:

The United States Depart of Labor, through its Office of Federal Contract Compliance Programs (“OFCCP”), will periodically evaluate the records and practices of federal contractors to ensure compliance with applicable rules and regulations concerning affirmative action. OFCCP has the authority to evaluate any business or organization that: (1) holds a single federal contract, subcontract, or federally assisted construction contract in excess of $10,000.00; (2) has federal contracts or subcontracts that total in excess of $10,000.00 in any 12-month period; or (3) holds government bills of lading, serves as a depository of federal funds, or is an issuing and paying agent for U.S. savings bonds and notes in any amount.

PURPOSE OF THE EVALUATIONS:

The OFCCP conducts compliance evaluations to determine if federal contractors are: (1) following nondiscriminatory hiring and employment practices and (2) taking affirmative action to ensure that qualified minorities, females, veterans and disabled persons are employed. In addition, the OFCCP evaluates to ensure that employees of federal contractors are placed, trained, upgraded, promoted, and otherwise treated fairly during their employment, without regard to race, color, religion, sex, national origin, and disability.

THE EVALUATION PROCESS:

A compliance evaluation begins with a compliance review, which is a comprehensive analysis and evaluation of the hiring and employment practices of the contractor. A compliance review may take several forms. Typically, the OFCCP begins the evaluation with a desk audit, which involves receiving and reviewing the records of the contractor. The OFCCP generally asks for copies of the contractors Affirmative Action Program and supporting data, EEO-1 filings and labor contracts. Of import, OFCCP regulations require that federal contractors maintain extensive records. For contractors with fewer than 150 employees or a contract of less than $150,000, all job postings and advertisements, applications received, any interview notes, test and test results, records of job offers, and the applications themselves must be maintained for one year from the making of the record or the personnel action. All other contractors must keep these records for a period of two years. Following the desk audit, the OFCCP may choose to conduct an in person inspection of the contractor’s place of business.

IN THE EVENT OF NONCOMPLIANCE:

If the OFCCP determines that the contractor has failed to comply, then the contractor will typically be given a period of thirty (30) days to correct and comply. A contractor can face significant costs, both legal and administrative, to correct and comply. If the contractor does not or cannot correct and comply, the contractor may lose its federal contracts and possibly be barred from future contracts. In addition, the government may suspend payments on existing contract. In short, non-compliance is expensive and damaging.

THE TAKEAWAY

Like an IRS audit, the best way to be prepared is to have good records. Unlike the IRS, however, the Department of Labor OFCCP requires copies of an Affirmative Action Program and supporting data. We recommend you keep your policies up to date and available as required by state and federal law.

We can help.

Contact info@neworkplacelaw.com or call 508-548-4888

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