Shaping Smarter Regulations

Comments to U.S. Department of Labor on Decreasing Regulatory Bu

The Independent Bakers Association (IBA) is pleased to respond to the Department of Labor’s invitation for public comment on how the Department can improve its regulations by modernizing, modifying, redesigning, streamlining, expanding, or repealing them. IBA is a national trade association of over 250 wholesale bakeries and related organizations. Our members include government contractors which are subject to regulations of the Department’s Office of Federal Contract Compliance Programs (OFCCP) requiring equal employment opportunity and affirmative action for minorities, females, protected veterans and individuals with disabilities.

Our comments will focus primarily on two questions on which the Department requested input:

• Which of the Department’s regulations, guidance, or interpretations should be considered for review, expansion or modification?

• What reporting requirements and information collections can be streamlined or reduced in frequency while achieving the same level of protections for workers, job-seekers, and retirees?

Affirmative Action and Nondiscrimination Obligations of Contractors and Subcontractors Regarding Protected Veterans and Individuals with Disabilities – 41 CFR Part 60-300 and 41 CFR Part 60-741

IBA believes that OFCCP’s affirmative action regulations regarding protected veterans and individuals with disabilities (IWDs) should be significantly modified and the requirements contained therein streamlined. These regulations impose significant new burdens and obligations on government contractors, including requirements that contractors design, implement, and maintain detailed documentation of various procedures and activities.

Contractors will have to hire additional full time equivalents (FTEs) and purchase or develop systems necessary to comply with these requirements. The burdens and costs of these procedural and recordkeeping requirements greatly exceed any conceivable benefit to the groups the law is designed to protect. The following are a few examples of new requirements which IBA believes the Department should modify and/or streamline.

Unduly Burdensome Procedures for Analyses of Personnel Processes

Title 41 of the Code of Federal Regulations, Sections 60-300.44(b) and 60-741.44(b), require government contractors to periodically review their personnel processes to ensure that they provide for “careful, thorough, and systematic consideration” of protected veterans and IWDs for job opportunities, promotions and training opportunities. The regulations also state that contractors must periodically review these processes and make any necessary modifications. These requirements, as generally stated, are reasonable and appropriate. But the regulations go on to require that contractors’ affirmative action programs (AAPs) include a “description of the review and any necessary modifications to personnel processes or development of new processes.” The regulations then obligate contractors to “design procedures that facilitate a review of the implementation of [these] requirement[s] by the contractor and the Government.”

Although the above requirements are stated in fairly general terms, Appendix C to the affirmative action regulations for protected veterans illustrates what the government views as an acceptable set of procedures. Appendix C suggests that the procedures which contractors should use to meet the above requirements include the following:

1. The application or personnel form of each known applicant who is a protected veteran should be annotated to identify each vacancy for which the applicant was considered, and the form should be quickly retrievable for review by the Department of Labor and the contractor's personnel officials for use in investigations and internal compliance activities.

 

2. The personnel or application records of each known protected veteran should include (i) the identification of each promotion for which the protected veteran was considered, and (ii) the identification of each training program for which the protected veteran was considered.

 

3. In each case where an employee or applicant who is a protected veteran is rejected for employment, promotion, or training, the contractor should prepare a statement of the reason as well as a description of the accommodations considered (for a rejected disabled veteran). These materials should be available to the applicant or employee concerned upon request.

4. Where applicants or employees are selected for hire, promotion, or training and the contractor undertakes any accommodation which makes it possible for him or her to place a disabled veteran on the job, the contractor should make a record containing a description of the accommodation.

The above requirements and the intricate procedures which must be created and documented and made available to the government at the outset of a compliance review are extremely burdensome. Compliance will require contractors to invest significant amounts of time and money – resources which would be better spent on activities which would actually promote employment opportunities for veterans and IWDs. The burden and cost of the above requirements significantly outweigh any potential benefit to the groups the law is designed to protect.

Unduly Burdensome Analyses of Outreach and Recruitment

Sections 60-300.44(f)(1) and 60-741.44(f)(1) of the same regulations require federal contractors to undertake outreach and positive recruitment activities designed to recruit qualified protected veterans and IWDs. Although the regulations state that the contractor will not “necessarily” undertake all of the activities listed, Sections 60-300.44(f)(2) and 60-741.44(f)(2) each list numerous activities which the government considers appropriate for the contractor “to fulfill its commitment to provide meaningful employment opportunities” to veterans and IWDs. Sections 60-300.44(f)(3) and (4) and 60-741.44(f)(3) and (4) require contractors each year to evaluate the various outreach and recruitment efforts and to document each evaluation, including at a minimum the criteria they used to evaluate the effectiveness of each effort and their conclusions as to whether each effort was effective.

While positive outreach and recruitment efforts for veterans and IWDs are worthwhile, the continual, extensive documentation, evaluation and assessment of each of the numerous efforts recommended are overly burdensome and greatly out of proportion to the benefit, if any, to veterans and IWDs. Company recruiters who have a genuine interest and desire to recruit protected veterans and IWDs for job openings have been particularly vocal in their opposition to the burdensome documentation, evaluation and assessment which take time away from more meaningful activities which could actually benefit veterans and IWDs. Recruiters question whether the required internal evaluations, assessments and documentation provide any additional protections and/or employment opportunities for veterans or IWDs. Has OFCCP demonstrated that the documentation actually helps the individuals the regulations strive to protect? Does the documentation advance affirmative action, or is it busy work likely to be used to penalize the contractor for a recordkeeping violation?

OFCCP Compliance Reviews – Increased Burdens and Unreasonable Documentation

OFCCP has drastically changed its procedures for conducting compliance reviews of government contractors. The changes place unreasonable burdens on contractors and are not likely to further the Agency’s stated objective of promoting equal employment opportunities for minorities, females, veterans and IWDs.

OFCCP compliance reviews begin with the issuance of a “Scheduling Letter” to the contractor. The Scheduling Letter notifies the contractor that it has been selected for a compliance review and requires that the contractor’s AAP and various items of support data be submitted to OFCCP within 30 days. The support data is detailed in OFCCP’s “Itemized Listing” which is enclosed with the Scheduling Letter. This phase of the compliance review – during which the AAPs and support data are sent to OFCCP for review – is referred to as the Desk Audit.

Effective October 15, 2014, OFCCP began using a new Scheduling Letter with a significantly expanded Itemized Listing of the support data that has to be submitted at the outset of a compliance review. The Itemized Listing has been expanded from 11 items to 22 items and thus has literally been doubled.

The amount of documentation which contractors must now assemble and submit to the Agency at the beginning of each and every compliance review, regardless of whether there is any indication that the contractor has engaged in discrimination or failed to take affirmative action, is overwhelming. As just a few examples, contractors must assemble and submit the following regarding their AAPs for veterans and IWDs, all within 30 days after receiving notification of the audit:

• Documentation of the results of the detailed evaluations of outreach and recruitment efforts for veterans and IWDs

 

• Documentation of all actions taken to comply with the new audit and reporting system requirements for veterans and IWDs

 

• Copies of reasonable accommodation policies for IWDs along with documentation of all accommodation requests received and their resolution

 

• The contractor’s most recent assessment of its personnel processes, including the date the assessment was performed, any actions taken or changes made as a result of the assessment, and the date of the next scheduled assessment

 

• The contractor’s most recent assessment of physical and mental job qualifications for all of its positions, including the date the assessment was performed, any actions taken or changes made as a result of the assessment, and the date of the next scheduled assessment

Similar documentation is not required during the Desk Audit phase for contractors’ AAPs for minorities and females. It is unreasonable to require such extensive documentation unless and until there is an indication that the contractor has discriminated against members of a protected group or, at a minimum, that one or more protected groups are underrepresented in the contractor’s workforce.

OFCCP’s new Itemized Listing also requires that employee-level compensation data be submitted at the inception of a compliance review. Compensation data must be provided for each and every employee in the contractor’s workforce, including full time, part time, contract, per diem or day labor, and even temporary workers. The gender, race/ethnicity and hire date for each employee must be provided as well as job title, EEO-1 category and job group.

The compensation data for each employee must include base salary and/or wage rate, hours worked in a typical workweek, and other compensation or adjustments to salary such as bonuses, incentives, commissions, merit increases, locality pay or overtime. The contractor must also submit documentation and policies related to its compensation practices, particularly those that explain the factors and reasoning used to determine compensation.

The requirement that contractors submit – and that already overworked compliance officers analyze – such extensive, detailed compensation data at the beginning of a compliance review is unreasonable and does nothing to further affirmative action for minorities and females. Moreover, the inclusion of employee-level compensation data in the public record of a compliance review compromises the privacy rights of individual employees and the rights of contractors to protect their confidential financial information. This is particularly true for privately held contractors who consider the compensation paid to their senior managers and executives to be highly confidential and sensitive.

A much more reasonable and efficient approach would be for OFCCP to review compensation data by job group or job title. If there is no indication of discrimination or pay inequality, there is no justification for the Agency to “drill down” to an invasive and irrelevant review of compensation paid to individual employees. Compliance officers could instead focus on more productive aspects of the review or could conclude the review if it is apparent the contractor has complied with the applicable regulations.

Unrealistic Time and Cost Estimates

The Department also requested input on any indicators suggesting that the estimated costs and benefits of existing regulations should be reviewed. IBA submits that the estimated time requirements and costs of compliance with several sections of the affirmative action regulations for protected veterans and IWDs are understated and should be carefully reviewed and reevaluated.

For example, OFCCP has indicated that compliance with 41 CFR Sections 60-300.44(f)(3) and 60-741.44(f)(3) should only take 30 minutes and that compliance with 41 CFR Sections 60-300.44(f)(4) and 60-741.44(f)(4) should take no more than 15 minutes. These are the detailed requirements discussed above regarding the evaluation and documentation of various outreach and recruitment efforts. OFCCP’s suggestion that compliance with these requirements should only take a few minutes a year simply is not realistic. The increase in the activities expected as well as the analysis of each activity are likely to require contractors to spend multiple hours or even days – not minutes – complying with the regulations.

Thank you for the opportunity to provide comments.

Independent Bakers Association

February 24, 2015

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Idea No. 56