What to expect during an OFCCP audit
The OFCCP (Office of Federal Contract Compliance Programs) is a US Department of Labor agency that prevents federal contractors and subcontractors from using discriminatory employment practices. It conducts audits (compliance reviews) to determine if the contractor is maintaining a nondiscriminatory hiring policy and that their employment practices including taking affirmative action, ensuring there are no employment decisions made based on color, race, sex, national origin or religion.
The audit includes all facets of the employment process, from sourcing and hiring to promotions, transferring, layoffs, firing, and compensation. The OFCCP will also provide resources and other assistance to help an employer understand and meet all the requirements. Audits are fairly common – the number of workers at facilities reviewed for compliance was over 2.8 million between October 2016 and September 2019, according to the Department of Labor.
If you’re facing an OFCCP audit for the first time, it can be helpful to know what to expect.
A Desk Audit
The process starts with a desk audit, which is random. Every year the OFCCP selects various federal contractors for a desk audit, assessing compliance with affirmative action guidelines. You’ll get a letter from the OFCCP requesting documentation so that the company’s affirmative action plan can be evaluated. Based on the information it receives, the audit will be closed and you’ll get a letter that indicates no violations were present, or you’ll receive a notification of any potential discriminatory practices. If that latter occurs, you’ll go through an onsite review process.
The onsite review includes a more detailed analysis. The OFCCP may request more documentation like personnel files and compensation policies. Interviews with the staff and hiring managers may be conducted too.
Areas of Focus
It’s important to understand the audit’s areas of focus in order to be prepared. An onsite review will require more detailed data than the initial desk audit. It includes:
- Technical compliance
- Personnel activities
Technical compliance. To demonstrate compliance you’ll need many records, including proof of a listing with the Employment Service Delivery System, VETS-4212 reports, various copies of your policies on anti-harassment, nondiscrimination, maternity leave and Equal Employment Opportunity/Affirmative Action. You’ll also want to be sure that your purchase order statements have the correct EEO language and that you have copies of self-identification forms and notification of AAP viewing hours.
Personnel Activities. The type of information that will be gathered in regard to personnel activities depends on issues identified during the desk audit. That includes hiring data like job applications, job announcements, internal and external job postings and advertisements, personnel files, job descriptions, minimum qualifications and preferences, and documents that are created at every stage of the selection process like interview notes, testing, computerized screenings, and other screening procedures. Termination letters, information related to involuntary and voluntary terminations will all be required too.
Compensation. Compensation is often a primary area of focus. Eliminating compensation discrimination has been a key enforcement priority meant to resolve any compensation disparities that were the result of discrimination. Make sure you have a policy that explains how compensation is determined, and that your policy lists specific factors that affect compensation while preserving flexibility when considering other legitimate factors that can affect pay decisions. You’ll need individual employee pay data, including compensation that is beyond wages and annual salaries. There may be an interview conducted to gather more details about how pay decisions are made.