Stacey A. Bastone Jackson Lewis P.C. stacey.bastone@jacksonlewis (631) 247-4607

1. OFCCP Compliance in Higher EducationPrepared Exclusively for CUHRE/APAC 2019 ConferenceJuly 15, 2019 Stacey A. Bastone Jackson Lewis P.C. stacey.bastone@jacksonlewis.com (631) 247-4607

2. About the PRESENTER Stacey A. Bastone is a Principal in the Long Island Office. Ms. Bastone graduated from Cornell University in 2002 and received her Juris Doctor from Fordham University School of Law in 2005. She is admitted to practice in New York State. Since joining Jackson Lewis, Ms. Bastone has practiced in the firm’s Affirmative Action Practice group. Ms. Bastone assists companies in the preparation of affirmative action plans for federal contractors including job group analyses, EEO-1 classifications, utilization analyses, compensation analyses and adverse impact analyses. In addition, Ms. Bastone successfully has defended federal government contractors during audits conducted by the United States Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) including claims of pay inequities and disparate impact in employee selection practices. She works closely with national clients to design and implement affirmative action compliance procedures relating to recruitment, applicant tracking, compensation systems and other diversity and affirmative action compliance obligations. Before joining Jackson Lewis, Ms. Bastone was an Assistant District Attorney in Manhattan where she prosecuted felony and misdemeanor cases ranging from violent crimes to fraud. Ms. Bastone is an Adjunct Professor of Trial Advocacy at Fordham University School of Law where she instructs students on trial practice and effective jury presentation.

3. INTRODUCTORY STATEMENT The materials contained in this presentation were prepared by the law firm of Jackson Lewis P.C. for the participants’ reference in connection with education seminars presented by Jackson Lewis P.C. Attendees should consult with counsel before taking any actions and should not consider these materials or discussions about these materials to be legal or other advice.

4. AGENDA • Overview of Affirmative Action Regulations • Affirmative Action Planning in Higher Education • How to Prepare for an OFCCP Audit • Latest Developments

5. overview of affirmative action regulations

6. THE FEDERAL REGULATIONS • Federal Regulations: • Executive Order 11246 • Section 503 of the Rehabilitation Act of 1973 • Vietnam Era Veterans Readjustment Assistance Act of 1974 (VEVRAA) • Implementing Regulations • 41 CFR Chapter 60 • Enforcement Agency • Office of Federal Contract Compliance Programs (OFCCP)

7. OFCCP JURISDICTION – GENERALLY • Federal Contractor • Prime contract with a federal government agency to supply goods or services • Subcontractor • Contract with another private entity to supply goods or services necessary, in whole or in part, to fulfill the other entity's prime contract with a federal government agency • Single Entity • 27 point questionnaire

8. OFCCP JURISDICTION – HIGHER EDUCATION • Grants alone are not enough • OFCCP’s first Opinion Letter confirmed that a college’s receipt of Pell Grant funds does not constitute a government contract and does not trigger AAP obligations • Research studies • Supply/Service contracts

9. WHAT ABOUT SCHOOLS WITH MULTIPLE CAMPUSES? • Board of Governors of University of North Carolina v. U.S. Dept. Of Labor, 917 F.2d 812 (4th Cir. 1990) • Issue: Did the 16 campuses of the University of North Carolina constitute a single entity such that non-contracting campuses must submit affirmative action plans to OFCCP for compliance reviews? • Two campuses argued that since they had no contracts with the federal government, they were not government contractors subject to OFCCP jurisdiction. • 4th Circuit Court of Appeals ultimately examined the North Carolina statute creating UNC, and found that since the statute granted broad authority to the Board of Governors, which had merely delegated authority to the individual campuses but maintained ultimate control over the campuses’ activity, the campuses were a single entity.

10. AFFIRMATIVE ACTION PLAN STRUCURE – GENERAL RULES FOR ALL CONTRACTORS • Coverage Threshold Requiring Preparation of Written Affirmative Action Plan: • 50 or more employees, and • Contract or subcontract of $50,000 or more ($150,000 under VEVRAA) • Contractors with multiple establishments must have a separate AAP for each location of 50 or more employees • For locations of less than 50 employees • Separate AAP ; or • Include in AAP of location that maintains personnel function; or • Include in AAP of location to which it reports • Functional AAP Model

11. AFFIRMATIVE ACTION PLAN STRUCURE – HIGHER EDUCATION • Separate plans for each campus vs. one university-wide AAP? • Advantages/disadvantages of separating by campus • Practical considerations

12. affirmative action planning in higher education

13. KEY ELEMENTS OF AN EXECUTIVE ORDER 11246 AFFIRMATIVE ACTION PLAN • Statistical Analysis • Workforce Analysis vs. Organizational Profile • List of job titles ranked in wage order within department or other organizational unit • Comprehensive organizational flow – chart showing each work unit • Job Group Analysis – groupings of similar job titles • Utilization Analysis • Adverse Impact • Compensation • Technical Compliance • Policies • Purchase Order/Subcontract Language • Outreach

14. JOB GROUP STRUCTURE

15. UTILIZATION ANALYSIS

16. ADVERSE IMPACT

17. Goal achievement and Good Faith Outreach Efforts • OFCCP will scrutinize outreach efforts for women and minorities in job groups where they are underutilized. • Amended Veterans/Disabled Regulations: enhanced obligations to document employment decisions; new data collection obligations; longer record retention obligations; more burdensome and aggressive compliance obligations; increased number of “unknowns” during OFCCP audits • Intense focus on measuring effectiveness of outreach for veterans and the disabled • Ensure you regularly list job openings with veteran and disabled recruitment sources • Record referral source for applicants • “How did you hear about us?” question on application (with detailed options for candidates to select) • Ask in screening interview or in-person interview • Monitor the number and quality (interviewed/hired) of applicants referred by each source • Not just about the “push out” but the “pull in” as well • As appropriate, change the sources you work with • Annual written assessment required

18. COMPENSATION: ITEM 19 OF THE SCHEDULING LETTER • For each employee: job title, EEO-1, job group, and: * Base Salary/Wage Rate * Overtime * Incentive Pay * Hours Worked * Date of Hire * Bonuses * Commissions * Locality Pay * Merit Increases • Pay data must be for ALL Employees – F/T, P/T, contract, temporary, per diem and day laborers • OFCCP clarified in an FAQ that: • When they say compensation data for “contract, per diem, or day laborers” those are meant as categories of temporary employees on the contractor’s payroll • This includes adjunct faculty and seasonal employees

19. WHAT DOES THIS MEAN FOR HIGHER EDUCATION? • Highly structured compensation policies/practices • OFCCP will scrutinize adherence to policies • Maximum and minimum ranges, grades, levels, etc. • Union vs. Non-Union labor • Be sure to identify the unionized workforce • Seasonal Employees • Adjunct Professors • Faculty Compensation • Department/disciplines being paid differently • Consider conducting proactive pay equity analyses before you receive a scheduling letter • Privilege Issues

20. HOW TO PREPARE FOR AN OFCCP AUDIT

21. STAGES OF AN AUDIT

22. POTENTIAL OUTCOMES OF AN OFCCP AUDIT • Technical Violations: • Examples • Failing to post job openings with the state • Failure to make required outreach • Applicant data tracking record-keeping • Remedy: • Correct violations and progress reports

23. POTENTIAL OUTCOMES OF AN OFCCP AUDIT • Finding of Discrimination: • Back pay awards or other “make whole” remedies (e.g., job offers, reinstatement, benefits, lost overtime, front pay, bonuses, seniority, etc.) for “victims” of discrimination identified by the OFCCP • Compensation adjustments (proactive and/or retroactive) to address pay equity issues • Other diversity and EEO-related measures mandated by the OFCCP under a Conciliation Agreement (e.g. management training, outreach efforts, etc.) • Required submission of progress reports to the OFCCP regarding the corrective action ordered by the Agency • Press release • Disbarment

24. IN THE TRENCHES OF RECENT OFCCP AUDITS: HIGHER EDUCATION ISSUES • Campus plans vs. location • Multiple HRIS system issues • Coordinating the Human Resources, Deans and Administrators • Visual observations where employee has declined to self-identify • Applicant tracking / 1:1 ratios • Compensation data/formula for multiple assignments • Time in position and other compensation-related data not captured within systems and difficult to locate in hard copy files • Diversity-specific outreach efforts • Posting all appropriate positions with the state (faculty)

25. LATEST DEVELOPMENTS

26. OFCCP UNDER THE TRUMP ADMINISTRATION • Under Director Craig Leen, the Agency is operating under 4 pillars: • Transparency • Certainty • Efficiency • Recognition • These pillars are in part, a response to the criticisms lodged against OFCCP under the prior Administration (GAO Report: “Strengthening Oversight Could Improve Federal Contractor Nondiscrimination Compliance”) • OFCCP activities have closely aligned with these pillars since their pronouncement in 2018

27. Recognition Transparency & Certainty Efficiency DIRECTIVES & GUIDANCE Focused Reviews 2018-04 “What Federal Contractors Can Expect” Contractor Recognition Program 2018-06 Methodology for Scheduling Compliance Reviews Affirmative Action Program Verification 2018-07 Predetermination Notices 2018-01 Ombud Service 2018-09 Religious Exemption 2018-03 Compliance Review Procedures 2019-01 Analysis of Contractor Compensation Practices 2018-05 Early Resolution Procedures 2019-02 Transparency in Compliance Activities 2018-08 Voluntary Enterprise-wide Review 2019-04 Opinion Letters and Help Desk 2019-03

28. Legal Update • OFCCP now publishes its CSAL list (advanced notice of audit) on its website: • https://www.dol.gov/ofccp/foia/foialibrary/index.html • Because of the advanced notice, OFCCP will be less inclined to grant extensions on Basic AAPs but extensions for AAP Support Data are available • The first CSAL of 2019 was released on March 25th: • 2345 Establishment Compliance Reviews; • 500 Compliance Checks; • 500 Section 503 Focused Reviews; • 83 CMCEs; and • 72 FAAP functional units. • NO UNIVERSITY REVIEWS… ON THE 2019 CSAL LIST

29. PDN Guidance • Issued on February 27, 2018: • POLICY: OFCCP will issue Predetermination Notices (“PDNs”) for preliminary individual and systemic discrimination findings identified during the course of compliance evaluations. • The use of the PDN encourages communication with contractors and provides them an opportunity to respond to preliminary findings prior to OFCCP deciding to issue a Notice of Violation. Regional discretion is no longer permitted. • Update: In a May 2019 public appearance, Director Leen hinted at upcoming rulemaking around the Pre-Determination Notice process.

30. New Type of Compliance Review:Compliance Checks • Current Scheduling Letter: “AAP results for the preceding Year (41 CFR 60-1.12(b); 60-300.44(f)(4) and 300.80; 60-741.44(f)(4) and 741.80)” • Will include narrative discussion of prior year goal attainment • OFCCP could interpret this to include: • Veteran and disability data collection (44k)? • Assessment of Effectiveness of Outreach? • Documentation of Review of Personnel Processes? • Review of physical and mental qualifications? • OFCCP will check the General Services Administration System for Award Management database to determine if a contractor has self-certified that it has AAPs. • Employers may opt for an onsite instead of sending remotely to OFCCP • Compliance Officers can expand a compliance check to a full compliance review at their discretion

31. New Type of Compliance Review:Focused Reviews • Section 503 Focused Reviews • 500 Section 503 Focused Reviews on March 2019 CSAL • Headquarters Locations • Current scheduling letter requires submission of 12 items consisting of AAPs and support data • Mandatory onsite review of policies, procedures, and documentation of AA obligations for individuals with disabilities. • But, not until at least September 1, 2019 • VEVRAA Focused Reviews • Expected to be added to compliance evaluations in 2020.

32. Technical Assistance Guide for Higher Education • Been on OFCCP’s radar for years • Director Leen has said that the Agency is working on it • Will hopefully address many of the issues plaguing colleges and universities • STAY TUNED…

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