Welcome

Prospect of Affirmative Action Checks Worries U.S. Contractors

April 8, 2021, 9:46 AM

The U.S. Labor Department is looking at ways to verify that federal contractors are setting required affirmative action goals, a move that has companies worried about handing over more sensitive workforce data to the government.

The agency sparked concerns when it recently posted an “Affirmative Action Plan Verification Interface” webpage. The site is labeled as “Coming Soon” and describes itself as a “secure web based interface created to improve communication and the transfer of Affirmative Action Plan data.”

The DOL’s Office of Federal Contract Compliance Programs could use the site to collect companies’ full affirmative action plans, which detail their efforts to hire women, minorities, individuals with disabilities, and military veterans, attorneys for contractors said. Currently, the agency reviews the plans only after a business is selected for an audit.

OFCCP Director Jenny Yang in March said the agency is evaluating next steps and “looking at the capabilities of the technology” when asked about plans for collecting affirmative action data. A Labor Department spokesperson on Wednesday said the agency had no further updates.

Contractors would oppose submitting their full plans, attorneys said, citing burdens associated with such a collection and fears the agency won’t be able to secure their sensitive employment data. Civil rights groups, however, say now’s the time to ensure contractors comply with their affirmative action obligations, given the nation’s focus on racial and gender equity issues that the White House is prioritizing.

Craig Leen, the Trump-era OFCCP director, told Bloomberg Law that he’d planned for a simple annual verification, where contractors would just check a box to confirm they created an affirmative action plan. But he acknowledged that the already-developed collection technology has capabilities that the current administration could tap to collect the affirmative action goals in their entirety.

“All of those pieces together makes me think they may be expanding it,” beyond a simple verification, Leen said.

Contractor Obligations

Businesses that hold federal contracts must create an affirmative action program, known as an AAP, within 120 days of beginning a contract, and the regulations call for them to be updated annually.

Contractors must develop an AAP for every work site, including information about its diversity makeup while mapping out hiring goals to ensure equal employment opportunity.

To this day, however, the contractor watchdog hasn’t had a routine process outside of audits for checking that the AAPs were created or routinely maintained.

To address that enforcement blind spot, and in response to a 2016 government watchdog report, the agency developed the technology for a verification portal and asked contractors last year how they should verify AAPs are in place. The agency posted the “Coming Soon” webpage in early March.

The agency’s regulations also already call for contractors to “submit the program summary to OFCCP each year,” though the agency hasn’t collected them to date.

A smattering of OFCCP observers responded to the September information request, mostly supporting the proposed idea of identifying those who don’t have a functioning AAP, but rejecting a potentially burdensome data collection.

The public comments are still being evaluated, an agency spokesperson said.

“There’s a lot of concern about the possibility of uploading actual AAPs,” said Alissa Horvitz, an attorney with Roffman Horvitz who counsels employers on OFCCP matters. “It would be unmanageable and I don’t think there really is uniformity to how an organization evaluates its data.”

Any sort of verification will help the agency hone its focus on contractors that likely aren’t in compliance, said Marilynn Schuyler, an attorney who also serves as the public information chair for the American Association for Access, Equity and Diversity. The group promotes advocacy around affirmative action.

“This is going back to trying to get contractors who have not been touched by OFCCP,” Schuyler said. “This benefits employees who work for federal contractors.”

If the agency goes with a full AAP collection rather than a simple verification, a period of notice and comment would likely have to come first, according to Matthew Camardella, a Jackson Lewis principal.

He said the “light touch” of a check-the-box verification is the best-case scenario for contractors.

Security Concerns

There’s also a concern about data security—a top issue when dealing with the OFCCP, several management attorneys told Bloomberg Law. They described multiple incidents of private workforce data being accidentally leaked in emails, or instances of the agency allegedly misplacing documents.

“Data security at OFCCP is a huge problem,” said David Goldstein, a Littler Mendelson shareholder. “If we started with that, there would be a much greater level of comfort in providing documents to OFCCP.”

Camardella agreed, saying there’s apprehension about submitting data electronically to the agency after past mishaps.

“It’s not an everyday occurrence, but it’s happened enough to give people pause,” he said.

The agency didn’t respond to requests for comment on the data security concerns.

Civil Rights Hopes

In a 2016 report, the Government Accountability Office report said nearly 85% of audited federal contractors didn’t submit their AAPs within 30 days when requested, which suggested non-compliance.

It’s important that federal contractors comply with their affirmative action obligations, according to Maya Raghu, the director of workplace equality and senior counsel at the National Women’s Law Center, because it pushes contractors beyond just not discriminating, but towards taking steps to reach equity.

“Just the act of having to do that, I think, is important self-analysis for companies, and is going to lead to contractors being more proactive and thoughtful about setting and reaching those goals,” she said. “There is this window of opportunity now, where you have many federal contractors who are already thinking about these issues and have made these public statements on wanting to do better on racial equity, and this is a tool to help them achieve that.”

To contact the reporter on this story: Paige Smith in Washington at psmith@bloomberglaw.com

To contact the editors responsible for this story: Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; Travis Tritten at ttritten@bgov.com

To read more articles log in. To learn more about a subscription click here.