Georgia Tech Procurement Assistance Center

OFCCP releases three new directives for federal contractors

By

The Office of Federal Contractor Compliance Programs’ fiscal year 2019 directives rescind the Active Case Enforcement compliance review procedures, create early resolution procedures, and enhance compliance assistance through the Help Desk and opinion letters.

The U.S. Department of Labor’s Office of Federal Contractor Compliance Programs (OFCCP) has issued three new directives, building on this administration’s nine directives issued in fiscal year 2018. The directives, effective immediately, are all geared toward greater transparency, compliance assistance, and enhanced guidance for federal contractors, while maximizing OFCCP’s limited resources.

Compliance Review Procedures, Directive 2019-01, rescinds Directive 2011-01 and provides that reviews will be conducted in accordance with OFCCP’s Federal Contract Compliance Manual (FCCM). The rescinded 2011 directive set out Active Case Enforcement (ACE) compliance review procedures. OFCCP states that the agency has embedded valuable components of ACE into its standard operating policies and procedures and updated the FCCM in August 2014 to incorporate the full desk audit procedures and closure letter templates. OFCCP concludes that in addition to other agency guidance, such as recent directives on transparency, compensation analysis, use of predetermination notices, and focused reviews, there is no longer a need for the ACE directive to exist as a freestanding guidance document.

Early Resolution Procedures, Directive 2019-02, “will help contractors and OFCCP achieve their mutual goal of equal employment opportunity in federal contracting and reduce the length of compliance evaluations through early and efficient resolutions.” The new procedures apply to all compliance evaluations in which a predetermination notice, notice of violation, or show cause notice has not been issued as of November 30, 2018. The agency’s intent is that the procedures will allow OFCCP and contractors with multiple establishments to cooperatively develop corporatewide compliance. Significantly, depending on the type of violation, if the contractor and OFCCP agree to corporatewide compliance and other terms, OFCCP will not schedule that establishment or all establishments covered by the agreement for a new compliance evaluation for the five-year period, concurrent with monitoring.

Opinion Letters and Help Desk, Directive 2019-03, announces OFCCP’s intention to start issuing opinion letters to parallel the use of this type of guidance tool by other Department of Labor agencies. The directive also announces the agency’s desire to “enhance its Help Desk by making certain Help Desk [inquiries] and responses dynamically available and searchable as a self-service option on OFCCP’s website.” OFCCP staff are directed to implement these enhancements and develop a process for issuing opinion letters.

What do these new directives mean for federal contractors?

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=761632

DOL announces new compliance assistance tools to assist new and small businesses

By

The U.S. Department of Labor has announced the launch of the New and Small Business Assistance and the Compliance Assistance Toolkits web pages.

These new online tools assist American small businesses and workers with simple, straightforward resources that provide critical Wage and Hour Division (WHD) information, as well as links to other resources.

The web pages were established in response to feedback received from new and small business stakeholders voicing their need for a centralized location to secure the tools and information they need to comply with federal labor laws. The web pages also provide relevant publications and answer the questions most frequently asked by new and small business owners. These tools, in conjunction with worker.gov and employer.gov, ensure greater understanding of federal requirements and provide tools to help employers find resources offered by other regulatory agencies.

In addition to these new resources, WHD recently made available compliance assistance videos that provide brief, plain-language explanations of the Fair Labor Standards Act’s (FLSA) requirements and protections. The videos provide essential information employers need to understand their obligations under the law.

In August 2018, the Office of Compliance Initiatives (OCI) launched a revamped worker.gov to provide information about workers’ rights and an all-new employer.gov to provide information about the responsibilities of job creators toward their workers.

For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the Division’s toll-free helpline at 866-4US-WAGE(487-9243).

Information is also available at https://www.dol.gov/whd including a search tool to use if you think you may be owed back wages collected by the Division.

Source: https://www.dol.gov/newsroom/releases/whd/whd20181017

What do contractors do now? Interpreting OFCCP’s compensation discrimination directive

By

For the third time in the last 10 years, the Office of Federal Contract Compliance Programs (OFCCP) has revamped its guidance on compensation investigation and enforcement by issuing Directive 2018-05 and publishing frequently asked questions (FAQs) on the new directive.

This internal agency directive, while not having the force of law that a court holding or regulation would have, does provide federal contractors with some information on how OFCCP may evaluate their compensation in OFCCP audits. This directive will apply to compliance evaluations scheduled on or after August 24, 2018, and may be used by OFCCP in earlier, open cases to the extent it doesn’t conflict with prior guidance or procedure.

On Which Pay Cases Will OFCCP Focus?

In the directive, OFCCP offers general guidance on the legal theories under which it will pursue compensation discrimination and how those align with program priorities. Stating that compensation disparities can be created through inequities in monetary compensation, inequitable training or advancement opportunities, and assignment/placement differences, OFCCP reiterated its reliance on statistical analyses reflecting a statistically significant difference of two standard deviations or more as well as non-statistical (or anecdotal) evidence of discrimination. (Anecdotal evidence could be testimony regarding biased statements or remarks, examples of differential treatment, testimony about individuals who were given misleading or contradictory information about employment or compensation practices, etc.)

Signaling a potential shift in agency practice, however, the directive notes that “OFCCP will be less likely to pursue a matter where the statistical data are not corroborated by non-statistical evidence of discrimination unless the statistical evidence is exceptionally strong.” (OFCCP does not define the phrase “exceptionally strong.”) Moreover, a footnote explains that OFCCP may pursue a case without anecdotal evidence if the agency detects patterns of discrimination over several years or at multiple contractor establishments. Finally, OFCCP may conduct comparative analyses of small groups of similarly-situated employees to determine if pay differences due to discrimination exist.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=733422

Something old, something new: Contractor recognition and AAP verification on the horizon at OFCCP

By

On August 24, 2018, the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) issued three new directives, 2018-05, 2018-06, and 2018-07.   While directive 2018-05 has received most of the attention because it focuses on reviewing a contractor’s compensation practices during a compliance evaluation, directives 2018-06 and 2018-07 should not go unnoticed.

During OFCCP Town Hall Meetings earlier this year, contractors suggested a return to recognition programs such as the Exemplary Voluntary Efforts (EVE) Award or the Secretary of Labor’s Opportunity Award. Both programs were instituted in the late 1980s to recognize federal contractors for exemplary efforts in advancing fair employment practices and programs. Both programs were ultimately rescinded in 2013.

Recognizing that awards and recognition programs may incentivize contractor compliance, the OFCCP issued directive 2018-06 titled, “Contractor Recognition Program.”  While short on details, the directive describes several tools and resources under development:

  • A contractor recognition program that highlights implementable best or model contractor practices;
  • A contractor mentoring program that uses contractors to help their peers improve compliance; and
  • Other initiatives that provide opportunities for contractors to collaborate or provide feedback to OFCCP on its compliance assistance efforts.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=732786

Orlando contractor to pay $575,000 after DOL investigation uncovers improper pay deductions

By

Loyal Source Government Services LLC – a medical and support staff contactor based in Orlando, Florida – will pay $574,989 to 4,047 employees after a U.S. Department of Labor Wage and Hour Division (WHD) investigation determined the company violated the McNamara-O’Hara Service Contract Act (SCA).

WHD investigators found Loyal Source Government Services LLC unlawfully deducted $10 per paycheck from each employee for the administration of employee health and welfare benefits.

“This investigation demonstrates the Department of Labor will enforce all applicable laws to ensure that employees receive legally required pay and benefits,” said Wage and Hour Division District Director Daniel White, in Jacksonville. “The Department’s Wage and Hour Division encourages all employers to make use of the many tools we provide to help them understand and comply with the law, and to call us for assistance.”

For more information about the SCA and other laws enforced by the Division, contact its toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd/ including a search tool to use in the event a worker suspects he/she may be owed back wages.

Source: https://www.dol.gov/newsroom/releases/whd/whd20180907

OFCCP promises clear guidance and consistency, laying out a program of carrots and sticks

By

In his first two speeches after taking over as Acting Director of the Office of Federal Contract Compliance Programs (OFCCP), Craig Leen emphasized a commitment to the rule of law, promised to provide contractors with clear guidance and transparent enforcement processes, offered incentives for voluntary compliance, and outlined plans to identify and audit government contractors that are ignoring their obligations.

His speeches came at the beginning and end of a four-day Industry Liaison Group National Conference held in Anaheim, California that was attended by HR compliance professionals and officials from the Department of Labor (DOL), OFCCP, and Equal Employment Opportunity Commission (EEOC). Although the conference included presentations from industry experts, the highlight for many was the opportunity to hear directly from the OFCCP, including its new acting director.

Mr. Leen opened the conference with a keynote address focusing on his goals for the OFCCP, including transparency, certainty, efficiency, and recognition. Mr. Leen highlighted OFCCP’s recent Directive 2018-01, which requires a Predetermination Notice (PDN) in all cases with preliminary individual and systemic discrimination findings. According to Mr. Leen, contractors can expect meaningful, good-faith conciliation.

Additionally, he noted that the OFCCP will no longer engage in fishing expeditions with information requests during a compliance evaluation. Instead, OFCCP compliance officers must have specific reasons for a request and be able to explain the need for the information upon request.

Importantly, in the information request context, Mr. Leen explicitly acknowledged that contractors will be given reasonable time to respond and that the age of “false deadlines” to show authority was over.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=727378

Increase in 2017 Service Contract Act health & welfare rate; Lower rate for contracts covered by federal paid sick leave EO

By

The U.S. Department of Labor (DOL) has released its annual memorandum with the rate increase for Service Contract Act (SCA) Health and Welfare (H&W) Fringe Benefits. The new rate of $4.41 per hour (up from the 2015-2016 rate of $4.27 per hour) is required in all government contract bids or other service contracts awarded on or after August 1, 2017.

A special rate of $1.91 per hour is set for Hawaii, which takes into account that state’s mandatory health insurance coverage. However, an employer may use this lower rate only if it actually makes contributions for employees under the Hawaii Prepaid Health Care Act.

DOL officials indicated earlier this year that the rates set for 2017 would account for contracts subject to Executive Order 13706, which applies to new contracts that result from solicitations issued on or after January 1, 2017, or that are awarded outside the solicitation process on or after that date. The EO requires covered contractors to provide employees up to 56 hours of paid leave sick leave annually.

Keep reading this article at: http://www.jdsupra.com/legalnews/increase-in-2017-service-contract-act-87128/

I think my company is a federal contractor and has regulatory obligations, but where can I look to search for that information?

By

Doing business with the United States federal government can be very lucrative, but it comes with a price.

That price arrives in the form of reporting obligations, recordkeeping, outreach, and much more.

Failure to comply with all applicable regulatory requirements can also have steep consequences, so it is very important for federal contractors to ensure they are doing all that is required.

Companies are sometimes unaware that they are a covered contractor or subcontractor and, thus, find themselves unprepared for an Office of Federal Contract Compliance Programs (OFCCP) compliance review. In an effort to better prepare for these types of situations, this article is intended to provide some practical information and resources about federal contractor thresholds and where to look for federal contracts.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=598152

Why the U.S. government hates the idea of independent contractors

By

Say your business is doing well, and you to need to hire some extra workers.

But you may be terrified of all the obligations that go along with adding a person who must be treated as an employee. So you would prefer to add someone who can rightly be treated as an independent contractor. Good idea!

Unfortunately, the government hates the idea of independent contractors, and the IRS has skirmished with businesses for decades about the so-called worker classification issue. Here’s what you need to know about the subject.

Worker classification matters

When a worker is classified as an employee of your business, you generally must withhold federal income tax and the employee’s share of Social Security and Medicare taxes from the worker’s wages. Your business must then pay the employer’s share of Social Security and Medicare taxes, pay federal unemployment tax, file federal payroll tax returns, and follow lots of burdensome IRS and Labor Department rules. You may also get socked with state and local unemployment and worker compensation taxes and have to comply with even more rules and regulations. Dealing with all this stuff can cost thousands of extra dollars a year for each employee.

On the other hand, independent contractor status is beneficial to a business because you don’t have to worry about employment tax issues, and you don’t have to provide expensive fringe benefits like health insurance, retirement plan contributions, and paid vacations.

Keep reading this article at: http://www.marketwatch.com/story/why-the-us-government-hates-the-idea-of-independent-contractors-2017-05-23

President puts last nail in coffin to eliminate ‘blacklisting’ rule for federal contractors

By

President Donald Trump on Monday signed a joint resolution shutting down an Obama administration-era rule that supporters said evened the playing field for law-abiding contractors, but which the current administration said amounted to “blacklisting” easy targets.

House Joint Resolution 37 stated that Congress “disapproves” the Fair Pay and Safe Workplaces rule  and “such rule shall have no force or effect.”

H.J. Res. 37 was part of a package of resolutions signed March 27 by President Trump, which “roll back job killing rules,” said White House Press Secretary Sean Spicer during a press briefing earlier in the day.

Keep reading this article at: http://federalnewsradio.com/industryassociations/2017/03/trump-signs-joint-resolution-to-roll-back-blacklisting-rule-for-federal-contractors/

Contracting News

Read More

Contracting Tips

Read More

GTPAC News

Read More

Georgia Tech News

Read More