Tips for Being Audit Ready in 30 Days
The Office of Federal Contract Compliance Programs (OFCCP) released a new Supply & Service Scheduling List (CSAL) on June 7, 2024. The CSAL is a courtesy notification for contractors that they will be subject to a compliance evaluation shortly. The new CSAL includes 500 compliance evaluations including:
- 440 Establishment Reviews
- 30 Corporate Management Compliance Evaluations (CMCE)
- 24 Functional Affirmative Action Reviews (FAAP)
- 6 Higher Education Reviews
Those contractors who have not yet experienced an audit under the current scheduling letter should begin preparing now. The current letter requests significantly more information than prior versions and contractors still have only 30 days to submit their response. Extensions are rarely granted and only in limited and extreme situations.
Actions Contractors Can Take Now to Be Audit-Ready
- Tailor AAP narratives to highlight compliance efforts.
- Gather documentation of action-oriented programs designed to make progress toward affirmative action goals for women, minorities, individuals with disabilities and protected veterans. Prepare an assessment of the effectiveness of the various action-oriented programs.
Contractors that have not been tracking the details of their action-oriented efforts should implement a process going forward to record (1) each recruiting event, including date and number of individuals who attended each event; (2) the number of minimally qualified applicants from each referral source; and (3) the level of public engagement with the company’s recruiting webpage. Contractors also should document any changes to their outreach and recruiting strategies in response to the assessment.
- Determine the scope of a 2.17(b) assessment to identify any “problem areas.” Contractors have great latitude to determine the type and scope of their “in-depth assessment” of recruiting, hiring, promotion, termination, and compensation practices. Where the assessment identifies potential compliance gaps, investigate these indicators, and implement a plan to make any necessary corrections.
The scheduling letter requires contractors to include documentation of their 2.17(b) compensation assessment in their response to a scheduling letter. The assessment does not have to be a sophisticated statistical analysis. A cohort analysis or wage gap calculation is sufficient.
- Prepare a list of all selection tools with a particular focus on “artificial intelligence, algorithms, automated systems, or other technology-based selection procedures.” To the extent AI selection tools are used, gather relevant documentation and consider conducting an adverse impact analysis under legal privilege.
- Gather relevant employment policies related to equal employment opportunity, harassment, reasonable accommodations, internal complaint procedures, arbitration agreements, and recruiting, screening, hiring and promotion processes.
- With the assistance of counsel, conduct a privileged review of statistical disparities in hiring, promotion, and termination activity. Document non-discriminatory reasons for any disparities and discuss with counsel any areas of concern in advance of a compliance review.
- Pull the required two snapshots of compensation data. Review the data to confirm that it is accurate and complete. Conduct a robust analysis under the legal privilege and investigate any statistically significant pay differences.
Key Takeaway
The new scheduling letter is a game changer. Advance preparation and self-assessment are the key to a successful OFCCP audit. Contactors who have not recently undergone an OFCCP compliance review should consider partnering with legal counsel well in advance of receiving a scheduling letter to conduct a privileged mock audit.
Should you have any questions regarding an OFCCP compliance review or general compliance obligations, please contact Consuela Pinto at PintoBrown PLLC.
