Wednesday, October 7, 2009

Modernization of OFCCP requirements for federal construction contractors is an emerging concern

After decades of virtual obscurity, the OFCCP compliance obligations of federal construction contractors are receiving renewed attention. Earlier this year, the OFCCP announced that it will place a special emphasis on the construction industry when implementing its initiative to conduct audits of federal contractors in receipt of Recovery Act funds (because the majority, estimated at roughly 80%, of Recovery Act contractors will be recipients of direct or federally assisted funds for construction projects).

This past July, during a presentation at the 27th Annual Industry Liaison Group National Conference in Atlanta, OFCCP expert John Fox (attorney and partner at Manatt, Phelps & Phillips in Palo Alto, California) noted that the OFCCP’s construction program “has not been updated or addressed in 30 years and now is in need of a top to bottom review.” In September, Congressman Pete Stark (D-CA) and Congresswoman Rosa L. DeLauro (D-CT) sent a letter co-signed by 24 of their colleagues urging Secretary of Labor Hilda Solis to re-evaluate the affirmative action goals for women with regard to federal construction contractors set by the OFCCP in the agency's regulations implementing Executive Order 11246. According to a joint September 18, 2009 statement corresponding with the letter, the representatives believe the OFCCP should "modernize" its affirmative action goals "to reflect the realities of female participation in the construction industry today." The representatives pointed out that the current 6.9% participation goal for women was based on data from the 1970 Census and has been left on "indefinite extension" status since 1980.

The EEO and affirmative action obligations of federal contractors and subcontractors who hold construction contracts differ in significant ways from that of supply and service contractors. Covered federal construction contractors must comply with Executive Order 11246, Section 503 of the Rehabilitation Act, and the Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA), while federally assisted construction contractors must comply with Executive Order 11246 only.

In order to take into account the fluid and temporary nature of the construction workforce, the OFCCP does not require construction contractors to develop written affirmative action programs (which is a requirement for covered supply and service contractors). Instead, the OFCCP has established utilization goals based on civilian labor force participation rates, and has outlined in its regulations (at 41 CFR Section 60-4.3(a) ) 16 good-faith steps that construction contractors must take in order to increase the utilization of minorities and women in the skilled trades. (Note that the goals are not a requirement for quotas, which are specifically prohibited by law.) However, the OFCCP’s regulations on construction contractors obligations have not been updated since 1980, and, likewise, the utilization goals have not been updated for decades.

Thus, updating the equal employment opportunity and affirmative action requirements to reflect the current landscape pertaining to federal construction contractors should be one of many new developments coming from the OFCCP now that Patricia A. Shiu has taken the helm as Director.

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