Navigating the complexities of the modern job market involves more than finding the right candidates; it requires a deep understanding of regulatory compliance. For organizations committed to fostering diversity and equal opportunity, adhering to the guidelines set forth by the Office of Federal Contract Compliance Programs (OFCCP) is essential. Below is a quick overview of OFCCP, why it benefits everyone, the laws it enforces, and how TalentAlly, a rebrand of the Professional Diversity Network (PDN), can help you comply with OFCCP regulations.
What is OFCCP Compliance?
The Office of Federal Contract Compliance Programs (OFCCP), established in 1965, is a civil rights agency within the United States Department of Labor. The agency determines whether a federal contractor or subcontractor fulfills their legal obligation to take affirmative action, provide equal employment opportunities, and not discriminate through regular compliance evaluations. While these evaluations may seem daunting, the OFCCP offers employers resources, including learning materials, webinars, job training programs, a help desk, and more.
Contractors with over 50 employees who pass the threshold for a specified amount depending on the applicable law are also mandated to develop an affirmative action program (AAP). For instance, a contract of $50,000 for EO 11246 or $150,000 for VEVRAA qualify. The AAP is an annual management plan that documents every aspect of the organization, from structure and policies to demographics.
What are the Benefits of OFCCP Compliance?
Enhanced DEI
By seeking to eliminate discrimination in hiring, promotions, and other employment practices, companies create an environment that values and respects diversity, leading to a more innovative and collaborative workplace.
Improved Company Culture
The contractor’s commitment to fair employment practices and equal opportunities positively impacts employees as they feel valued and respected. Eliminating discrimination in the company culture increases overall job satisfaction and boosts the retention rate.
More Positive Brand Reputation
Employers who embrace every aspect of identity represented in their organization will attract top talent who share those values. Plus, a more inclusive brand reputation will assure customers and stakeholders of the company’s ethical practices.
Access to Federal Contracts
One prerequisite for federal contracts is compliance with OFCCP regulations. It opens an array of broader government opportunities, potentially increasing revenue significantly.
Does OFCCP Compliance Affect You?
The simple answer is yes if you hold a federal contract, subcontract, or receive grants above a certain threshold. Yet, there is a gray area as not all government-funded projects are classified as federal contractors. Thus, some organizations independent of federal contracts but closely related can apply for the “single entity test,” which allows the OFCCP to extend their jurisdiction.
The U.S. Department of Labor provides more information about qualifying organizations on the website.
OFCCP Enforced Laws & Regulations
Regardless of size or contract value, every federal contractor must comply with the following laws and regulations. However, a more comprehensive list regarding nuanced applications is on the OFCCP website.
Executive Order (EO) 11246
This law prohibits discrimination throughout the entire cycle of an employee. Contractors can not discharge an employee due to their race, color, religion, sex, sexual orientation, gender identity, or national origin. It also protects workers’ rights to discuss compensation.
Section 503 of the Rehabilitation Act of 1973 (Section 503)
The Rehabilitation Act protects workers with disabilities from unlawful discrimination and requires employers to provide equal employment opportunities. It celebrated its 50th anniversary last year.
The Vietnam Era Veterans Readjustment Assistance Act of 1974 (VEVRAA)
Since 1974, this law prohibited contractors from discriminating against protected veterans and ensures them equal employment opportunities. The OFCCP offers various resources for employers and veteran employees, such as guides, sample invitations to self-identify, a civilian transition center, and more.
Executive Order (EO) 13496
Under the National Labor Relations Act (NLRA), federal contractors must notify all employees of their right to form, join, and assist a union through the mandated posters. The notice must be visible in every physical location or emailed if it is a remote office. Any employer who does not comply will be subject to sanctions, suspension, or contract cancellation.
The Future of OFCCP and AI
As technology continues to push into the future, so will the fairness and equity of labor laws. A recently released statement by the U.S. Department of Labor and other federal departments explains how OFCCP will continue to protect worker’s rights as it applies to automated systems such as AI. It states:
“We pledge to vigorously use our legal authorities to protect worker’s rights…the agency will analyze federal contractor’s use of AI-based selection procedures that have an adverse impact the same way it reviews other selection practices.”
For more information, there is an FAQ page with specific details on the required documentation and procedures.
Find OFCCP Compliance Support with TalentAlly
TalentAlly, a rebrand of the Professional Diversity Network (PDN), has an expert compliance and auditing team that will provide customized services to ensure you comply with the OFCCP regulations. We’ll take your business beyond just checking the box. We transform your diversity recruitment strategy!
