New OFCCP Directive Establishes Voluntary Enterprise-wide Program

The OFCCP issued its latest directive, Directive 2019-04, on February 13, 2019, outlining its new Voluntary Enterprise-wide Review Program (VERP). The new program is designed to facilitate and confirm “enterprise-wide (corporate-wide) compliance by high-performing contractors and those aspiring to reach the top through individualized, corporate-wide compliance assistance.”

Contractors selected to participate in the VERP will be removed from the pool of contractors scheduled for compliance evaluations. There will be two-tiers of contractors: the top tier will include top-performing contractors with corporate-wide Diversity and Inclusion programs; the second tier will be contractors who are OFCCP compliant but need individualized compliance assistance to become top performers.  Criteria for the top tier will be more stringent.

To participate in the program, contractors must demonstrate that they meet established criteria that verify not only basic compliance with OFCCP’s requirements, but a demonstrated commitment to and application of successful equal employment opportunity programs on a corporate‐wide basis. A “top-tier” contractor can remain in the program for a period of five years while those at the second level can remain in the program for three years and receive individualized compliance assistance to become a top performer.  Any contractor selected must agree during that period to provide periodic reports and information to OFCCP through which OFCCP can confirm the contractor maintains a workforce free of discrimination or other material violations and also agree that OFCCP retains the right to conduct individual and/or third party complaint investigations to assure “the contractor abides by all terms of the agreement.”  It is not yet clear how OFCCP will make the distinction between “top-tier” and “second level” contractors.

Beginning in FY 2020, applicants will apply electronically online. They will then be subject to the OFCCP corporate headquarters compliance review and compliance reviews of other establishments. Contractors who do not qualify for the program will be returned to the pool of contractors for audit.

OFCCP states that this directive enables the agency to “blend its compliance evaluation and compliance assistance activities to work with high-performing contractors toward a mutual goal of sustained, enterprise-wide (corporate-wide) compliance, outside OFCCP’s neutral establishment-based scheduling process” as well as complementing the goals in its Early Resolutions Procedures.

House Education & Labor Committee Hosts a Joint Subcomittee Hearing on the Proposed Paycheck Fairness Act

Another important plank in the Democrats’ legislative agenda was given an early hearing on Wednesday, February 13, 2019.  A joint hearing on the proposed Paycheck Fairness Act (H.R. 7, S. 270) was held at that time by the House Subcommittees on Civil Rights and Human Services and on Workforce Protections.  An earlier version of Paycheck Fairness Act was passed by the House in 2008 and 2010, but never passed the Senate.  A similar fate is all but certain in this instance, but one purpose of offering the Act now was to set an agenda for the future.

The latest version of Paycheck Fairness Act would amend the Equal Pay Act of 1963 by substantially limiting the affirmative defenses, increasing protections from retaliation, prohibiting employers from asking for or using prior salary to set current pay, and allowing recovery of compensation and punitive damages. In addition, like its predecessor proposals, it instructs EEOC to collect pay data from employers and also to collect “compensation data and other employment-related data (including hiring, termination, and promotion data) disaggregated by the sex, race, and national origin of employees.” OFCCP is again directed to implement a similar survey to be given to half of its nonconstruction contractor establishments each year. The bill also instructs OFCCP not to use multiple regression or anecdotal evidence in its compensation discrimination cases. It further directs the Department of Labor to establish negotiation training for girls and women and a national pay equity in the workplace award among other salary related requirements.

The hearing included testimony from Rep. Rosa L. DeLauro (D-CT), a co-sponsor of the bill; Rep. Eleanor Holmes Norton (D-DC); and Rep. Don S. Breyer, Jr. (D-Va.); Fatima Goss Graves, CEO and President of the National Women’s Law Center; Camille Olson, Partner at Seyfarth Shaw; Kristin Rowe-Finkbeiner, CEO of Moms Rising, and Jenny Yang, former EEOC Chair and Partner of Working Ideal.

As noted, the bill will in all likelihood pass the House but, as in the past, will fail in the Senate at this time. Click here for written transcripts of the witnesses’ testimony and video of the joint subcommittee hearing.

OFCCP Focused Reviews of Accommodations Compliance Announced

OFCCP Director Craig Leen announced that the agency will be posting 500 Corporate Scheduling Announcement List (CSALs) on its website “in the spring” that will be for “focused reviews” of contractors’ Section 503 and VEVRAA compliance. The focused reviews will aim corporate-wide as opposed to establishment compliance.  FortneyScott has learned that OFCCP recently received OMB approval for a revised scheduling letter for these focused Section 503 reviews and a copy of that scheduling letter is here. The focused review CSALs will be part of the 3500 CSALs to be issued this spring.

Contractors should review the Section 503 focused review scheduling letter now so that they can be prepared if they are on the CSAL list. Remember that contractors will not be receiving CSAL letters but rather will have to check the OFCCP FOIA Library webpage.

The focused review CSAL’s are the product of OFCCP’s Directive 2018-04, issued on August 10, 2018, which stated that OFCCP will conduct focused reviews of contractor compliance with (1) Executive Order 11246, (2) Section 503 of the Rehabilitation Act of 1973 (Section 503), and (3) the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA). The focused reviews will be based on onsite visits to perform a comprehensive review of, for example, the Self-ID and accommodations process for affected applicants and employees. OFCCP pledges to provide a “standard protocol” for the reviews to be published in FAQs prior to the posting of the next scheduling list.

For more information on focused reviews and the coming CSAL notices contact your FortneyScott attorney.

EEOC Postpones EEO-1 Filing Deadline

EEOC has just announced that the deadline for submitting EEO-1 Surveys will be extended to May 31, 2019. EEO-1 is an annual survey in which all private employers with more than 100 employees and federal contractors and subcontractors with 50 or more employees are required to file the EEO-1 report. According to the EEOC, this was done because of the government shutdown which resulted in a “partial lapse in appropriations.”

For more information please contact your FortneyScott attorney.

Overtime Exemption Regulation Submitted for Review

We have learned that the long-awaited proposed regulation regarding overtime pay exemptions (the “White Collar Exemption Regulation”) has been submitted by the Department of Labor to the Office of Management and Budget (OMB) for review.  Although there is no deadline for this initial review, the start of the oversight process indicates that the proposed regulation will be published for notice and comment in the near future.

The publication of the proposed regulation is only the beginning of the process.  Once published, the public—including, particularly, affected employers—will have an opportunity to comment on the proposal during a required “notice and comment” period.  This period is often 90 days, but for regulations with significant economic impact, the comment period may be longer and can be extended.  This is an important step, and is the process for ensuring that employer’s views are considered by DOL as part of the rulemaking process.

In 2016, the Obama Administration published an overtime regulation that would have altered long-standing exemptions and raised the overtime pay threshold from $23,660 annually to $47,476.  Many positions once considered executive, administrative or professional would, thus, be subject to overtime pay.  Further, the pay threshold would be indexed to wage growth and updated once every three years.  This regulation was challenged and enjoined by the courts.  A new overtime rule has been promised by the Trump Administration.

FortneyScott will closely monitor this development and keep you informed.  Additionally, we will be filing comments on behalf of clients after the proposed regulations are published.

For more information please contact your FortneyScott attorney or email us at


OFCCP Officially Names Craig Leen as Permanent Director

Craig Leen, formerly the acting director of the Office of Federal Contract Compliance Programs, was named the agency’s permanent leader by the Department of Labor on December 26th. Leen took over for the previous politically appointed director in July. The position does not require Senate confirmation.

Six OFCCP Predictions for 2019

The second year at the OFCCP under the Trump Administration has been marked by activity – two Directors and nine Directives (which have limited enforceability according to the Department of Justice) – but little to show for it: $10 million less in recoveries than FY2017, and fewer audits than in any recent fiscal year. As 2019 begins, however, the agency has begun to make some of the changes federal contractors have been hoping to see since the end of the Obama Administration.

Based on what has happened in 2018, the OFCCP Practice Group attorneys at FortneyScott offer the following six OFCCP predictions for 2019:

  1. An increased number of audits in calendar year 2019. In OFCCP Acting Director Craig Leen’s November 2, 2018 testimony before the Commission on Civil Rights, Leen said that he plans to increase the number of audits in FY2019 to 3,500. In FY2018, OFCCP only completed 800 audits. It is questionable whether that number will be reached, but there is clearly intent to do more audits.
  2. New and different types of audits. One way more audits will be undertaken is to change how audits are conducted. In addition to the full audits, the agency will perform “no-certify” audits and compliance checks based on the SAM database; pre-award audits; complaint investigations; and construction audits, all designed to be more quickly resolved. At least 500 of the audits scheduled will be focused reviews under one of the three laws enforced by OFCCP—Executive Order 11246, Section 503 or VEVRAA.
  3. Audits will be conducted more efficiently and effectively. OFCCP’s new Directive on compliance audit procedure, DIR 2019-01, rescinded Active Case Enforcement and outlines a more streamlined audit process. The commitment to greater transparency under new Directive, DIR 2018-08, will aid federal contractors in better understanding and managing their compliance audits.
  4. Compensation will continue to be the BIG issue for OFCCP. Although Acting Director Leen rescinded Directive 307 with Directive 2018-05, the new compensation Directive kept many of the worst features of Directive 307, including pooled regressions, OFCCP-created pay analysis groups (PAGs), and analyzing multiple years of compensation data together. An increased percentage of OFCCP’s FY2018 settlements were based on compensation and contractors, and we will see that trend continue in 2019.
  5. New Early Resolution Procedures. Although some aspects of the new Early Resolution Procedures (DIR 2019-02) are very helpful to contractors, contractors need to consider the ramifications very carefully before agreeing to the new OFCCP’s Early Resolution Conciliation Agreement with Corporate-Wide Corrective Action (ERCA), especially for material violations alleging discrimination. The proposal to close audits with non-material violations with just a closure letter is a welcome return to earlier approaches. However, the material violation discrimination resolution procedures will subject all of a federal contractor’s establishments to OFCCP reporting, and may not provide the best resolution terms for the federal contractor. As a result, we predict that few contractors will elect to seek these agreements.
  6. New Opinion Letters and Help Desk. OFCCP’s new Directive on opinion letters and an enhanced help desk (DIR 2019-03) is an attempt to provide contractors with more useful compliance assistance. While OFCCP seems to be mirroring DOL’s Wage & Hour Opinion Letters, it is unclear whether the contractors will be able to rely on those letters as they can W&H’s opinion letters. As a result, it remains to be seen whether contractors will avail themselves of this opportunity.

We wish you the best for 2019, and we are happy to answer any questions that you may have about OFCCP compliance matters.

David S. Fortney

Jacqueline R. Scott

H. Juanita Beecher

Elizabeth B. Bradley

Burton J. Fishman

Sean D. Lee

Sara Nasseri

Consuela A. Pinto

Mickey Silberman

Leslie E. Silverman

DoD Issues new Other Transactions Guide

This week the Office of the Under Secretary of Defense for Acquisition and Sustainment (USD (A&S)) rescinded the January 2017 version of the Other Transactions (OT) Guide for Prototype Projects and issued a new, revised OT Guide.  OT agreements (OTAs) are not Federal Acquisition Regulation (FAR)-based procurement contracts, grants, or cooperative agreements.  As enunciated under the new OT Guide, OTAs are intended to utilize more commercial arrangements to accomplish particular projects.  While OTAs are subject to certain laws and provisions, they are not required to comply with the full panoply of procurement laws and regulations, such as the FAR and agency-specific supplemental acquisition regulations, applicable to FAR-based contracts.

Statutory authority for OTAs traditionally has been used to allow Department of Defense (DoD) to enter into agreements for new research, prototype development, and limited production.  This also includes Technology Investment Agreements (TIAs).  Revision of statutory authority has expanded the definition of non-traditional defense contractor (NTDC) and the use of OTAs to permit appropriate follow-on production agreements.  DoD uses OTAs to access state-of-the-art technology solutions from traditional defense contractors, non-traditional defense contractors that do not typically engage in contracts with the federal government, consortia, or through teaming arrangements involving these or other types of entities.    

The OT Guide provides a useful compendium of information on OTA authority, processes, administration and resources.  It includes a set of definitions, mythbusters, authorities, as well as examples of OTA arrangements, to clarify for both Government and industry the nature and scope of OTAs.  


·       DoD is seeking access to state-of-the-art technology solutions.

·       OTAs provide one avenue through which NTDCs as well as traditional defense contractors, may be able to engage in research, prototyping, and appropriate follow-on production.

·       OTAs are not cookie-cutter.  The nature and scope of an OTA, as well as the terms, rights, and available remedies, are governed by the controlling statutory and policy provisions of the agency, and the negotiation and agreement of the parties.  OTAs can be issued to an individual entity, team, consortium, or a combination of entities.  It is wise to consider all aspects and options, including, for example, the nature of the problem; your proposed solution; terms for successful completion; the availability of your own, potential team members, and the DoD resources; cost-share and funding; and intellectual property rights needs, when seeking to work in this space.

Susan Warshaw Ebner, one of FortneyScott’s shareholders, has experience in OTAs and TIAs, as well as traditional FAR-based procurements, grants and cooperative agreements.  If you have questions about this advisory, or seek assistance with regard to these types of transactions, please contact Susan Warshaw Ebner or your FortneyScott counsel.

OFCCP Issues Three New Directives

Today, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) made a significant announcement affecting federal contractors.  First, under a new directive, DIR 2019-01, OFCCP rescinded Active Case Enforcement for compliance reviews.  Second, DIR 2019-02 outlines new Early Resolution Procedures which will offer a five-year break from agency audits in exchange for reporting certain employment data to resolve audits.  Finally, OFCCP officially stated that it will be issuing opinion letters that offer compliance guidance.

The new DIR 2019-02, Early Resolution Procedures (ERP), offers five years of respite from audits to contractors who are settling bias claims with the OFCCP, in exchange for contractors reporting hiring, pay, and other employment data to the agency.  The ERP provides the mechanism by which OFCCP staff may resolve violations and work with the contractor to develop corporate-wide corrective actions.

  • For nonmaterial violations found, which can be corrected immediately during an audit, the OFCCP can resolve the evaluation during the desk audit with compliance assistance resulting in the issuing of a closure letter referencing the nonmaterial violations and their remedies.
  • For material violations not involving discrimination and for material violations involving discrimination found during an audit OFCCP will agree to a five-year moratorium on audits at that establishment if the contractor agrees to an Early Resolution Conciliation Agreement with Corporate-Wide Corrective Action (ERCA). The ERCA requires the contractor to review all or a negotiated subset of its establishments for violations similar to those found in the initial audit and to implement of any corrective action including job offers. The ERCA also requires the contractor to submit progress reports on the results of its analysis, findings, corrective actions and all supporting documents reasonably related to the review for up to five years.

OFCCP also issued DIR 2019-03 in which it announced that it will begin issuing opinion letters, similar to the Labor Department’s Wage & Hour Division, offering guidance on how contractors can comply with their affirmative action and nondiscrimination obligations based on specific factual scenarios.  It also outlined plans to enhance its current Help Desk capabilities.  The Directive also states that OFCCP may consider whether a contractor’s actions are consistent with an opinion letter, FAQ, or help desk advice when considering whether to cite the contractor for a violation.

Finally, the agency issued Directive 2019-01, rescinding Active Case Enforcement (ACE), DIR 2011-01.  According to Directive 2019-01, the agency’s recent directives on Transparency in OFCCP Compliance Activities, DIR 2018-09; Affirmative Action Program Verification Initiative, DIR 2018-07; and Focused Reviews, DIR 2018-04 have embedded the most effective parts of ACE and ACM into its standard operating policies and procedures, so the ACE directive is no longer necessary.

BOTTOM LINE: While the new directives provide welcome new ways to resolve issues with the OFCCP, the question will be whether the “new” OFCCP will be any more reasonable in resolving those issues than the “old” OFCCP.  How these directives will be implemented remains to be seen.  The attorneys at FortneyScott will monitor implementation of the new directives and keep you informed of on ongoing developments. If you have any questions, contact your FortneyScott attorney.


FortneyScott Lunch & Learn: 2018 Midterm Elections Update

The votes are in! After a fiercely contested midterm election, Democrats have gained control of the U.S. House of Representatives, and Republicans have retained the Senate. What will this mean for employers and government contractors?

Join experienced Washington, DC-based attorneys David Fortney, Susan Warshaw Ebner, and Nita Beecher on Tuesday, November 13th at 12:00 pm  for a special post-election webinar as they weigh in on how the midterm results affect the legal landscape for labor and employment and government contracting, including:

  • How federal agencies will be affected by the election results, including whether there will be more Congressional oversight of federal agencies’ rulemaking and enforcement activities;
  • What is the impact of the election results on current Federal programs and contracts;
  • Who likely will be the leaders for the key Congressional committees, and what will be their agendas;
  • What is the impact of the elections on the confirmation proceedings for many long-pending key agency nominations; and
  • Whether any key legislation is likely under the new 116th Congress or the final lame duck session of the 115th Congress?

Don’t miss this timely discussion! Click here to register.