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According to the U.S. Department of Labor, Fiscal Year 2019 was a record setting year for the Office of Federal Contract Compliance Programs.
In FY 2019, OFCCP obtained a record $40,569,816 in monetary settlements to resolve discrimination in employment with federal contractors. That’s $16 million more than the next highest previous year in 2017. Moreover, the three-year total for monetary settlements from FY 2017-2019 is the highest three-year period on record, exceeding the prior seven years combined.
In addition to surpassing the total amount of monetary settlements from years passed, the OFCCP says FY 2019 was its most successful year in terms of both enforcement and compliance assistance. An estimated 25 percent of America’s workforce is employed by federal contractors and the OFCCP is tasked with ensuring these contractors adhere to federal labor laws concerning equal opportunity employment and discrimination.
“Through a combination of effective enforcement and proactive compliance assistance, OFCCP has made a major impact on ensuring equal employment opportunity for America’s workforce, and will continue to do so in the upcoming year,” OFCCP Director Craig Leen said in a press release. “I am very proud of the OFCCP team because they are making a difference for the American workforce.”
In FY 2019, OFCCP answered over 4,500 Help Desk inquiries, the highest ever in a single year, and provided helpful guidance through compliance assistance guides, FAQs, and stakeholder events.
“These results illustrate the effectiveness of jointly using compliance assistance and enforcement to support American workers,” U.S. Secretary of Labor Eugene Scalia said in the release.
The OFCCP attributes a portion of its success to the newly implemented Early Resolution Procedures program, which led to a number of corporate-wide settlements early in the review process. However, the new program doesn’t necessarily benefit contractors.
1. High Cost
While the settlements agreed to through the Early Resolution Procedures process help contractors avoid litigation, these settlements can be quite costly. They also carry a high level of bad publicity when the settlements are announced, signaling to the public that the contractors may have been involved in discriminatory practices.
2. Time Consuming:
Additionally, continued compliance with the Early Resolution Procedures can be time consuming and force a company to expend valuable resources. As part of the program participating contractors must provide corporate-wide reports to OFCCP for five years following the settlement to ensure full compliance with equal employment opportunity and non-discrimination obligations.
3. Proactive Compliance:
In order to avoid the negative consequences associated with the Early Resolution Procedures, we recommend being prepared at all times. In order to save time and money, it’s important for contractors to ensure that they are always in compliance with federal labor laws. Taking preventative steps to ensure compliance is the only way for contractors to avoid any violations that could lead to a monetary hemorrhage. Equally important, being in compliance helps avoid liability risks (complaints to the EEOC or Wage &Hour) and boost morale for a higher productivity. It makes business sense to be compliant.
Preventative compliance involves conducting regular audits and analyses of your workplace culture and hiring procedures and policies to ensure you are complying with federal laws. The OFCCP offers a number of resources including a new self audit program that can help contractors uncover and address equal employment opportunity issues before they become larger problems.
OFCCP enforces Executive Order 11246, Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended. These laws bar contractors and subcontractors doing business with the federal government from employment discrimination on the basis of race, color, religion, sex, sexual orientation, gender identity, national origin, disability, or status as a protected veteran. In addition, contractors and subcontractors are prohibited from discriminating against applicants or employees because they have inquired about, discussed, or disclosed their compensation or the compensation of others subject to certain limitations.
Contact us to learn more about the preventative measures you can take to ensure your company never needs to engage in the Early Resolution Procedures program.