When the OFCCP Comes a’ Calling

Posted on April 26, 2012 by TriNet in Legal News & Compliance

Is your company a federal contractor? Do you know for sure? It is not uncommon for company representatives to first discover their company was appointed Federal Contractor status when they receive an Affirmative Action Desk Audit Notice from a little entity called the Office of Federal Contract Compliance Programs, or the OFCCP.

Anytime you receive notification from a government agency with the word “audit” in it, the alarm bells begin to ring and blood pressure shoots up. I experienced this with a client of ours not long ago – I’ll call them Company X.  It was a race against the clock to get Company X’s Affirmative Action Plan (AAP) into place because Federal Contractor compliance requires a plan within 120 days of the effective date of the contract, and for this client only a couple weeks remained. If you are not compliant, the government may pull their valuable contract from your company.

Developing an AAP is both tedious and time consuming. It involves gathering your workforce data including hiring practices, compensation and termination data, promotional practices and other business practices.  This data is then transformed into a lengthy Company Narrative combined with a number of various workforce reports and kept on file in the event of an audit.

My contact at Company X was very nervous about being audited, especially since she just learned of the company’s Federal Contractor status.  But, before we could address the audit, we had to get an AAP in place. Through some rather heroic efforts we managed to pull their plan together in two weeks time, positioning us to begin the painstaking “desk audit.”

These desk audits are intimidating and laborious. In our case, the OFCCP representative had many questions regarding where job advertisements were posted, why there were discrepancies in compensation, questions regarding hiring practices (including the self identification process and a step by step breakdown of the entire hiring process) and many other questions regarding the associated reports in the AAP. From start to finish, the audit lasted 5 months with continuous back and forth correspondence with the OFCCP. 5 months!

Although this client has a very diverse employee population and has targeted women and minorities in its hiring practices, they were chosen for audit by the OFCCP. Despite the fire drill of last minute preparation, we were able to respond appropriately to the desk audit notice and keep the company compliant. This is a good reminder for all of us to keep those lines of communication open among your company leaders so everyone is aware of any federal contracts coming in. A little preparation can go a long way!