Transcript The Good, The Bad and The Ugly

The New
Recordkeeping Realities
Presented by
Sandra S Zeigler
The Good
The Good – improving enforcement
of disability, veterans and
compensation laws. All contractors
would agree with OFCCP that equal
opportunity for people with
disabilities, and protected veterans is
a good thing. Likewise, all
contractors support a fair pay
system. Thus, the broad, stated
objective of reform is good.
The Good
Most of the specific
requirements will compel
you to be considerably
more careful about any
decisions you make
relative to individuals with
disabilities and veterans
which may help you
avoid some pitfalls.
The Bad
The Bad – Recordkeeping
has always been a weak
spot in contractor
compliance efforts. The
paradigm shift in the concept
and use of record creation
and recordkeeping will
exploit that weak spot in
ways that may make
compliance significantly
more challenging.
The Ugly
The Ugly – Compliance efforts
could get significantly more labor
intensive, data request will
expand, the volume of technical
violations will likely rise
significantly, and it is not at all
clear that the employment picture
for individuals with disabilities and
protected veterans or the pay for
women and minorities will
significantly improve even if the
regulations work as designed.
Purpose of this Presentation
• To highlight how the proposed regulatory
and enforcement initiatives will
fundamentally change what recordkeeping
systems are usually designed to do.
• To highlight how these changes may
impact you in enforcement.
• To offer some thoughts on ways to avoid
the ugly and remain compliant
Recordkeeping
• Under the current regulations, the role of
recordkeeping is, for the most part, simply
a method of preserving evidence of the
decision making process in the
employment setting.
• The focus is on keeping records that are
made in the usual course of business
pertaining to employment opportunities for
applicants and employees.
Recordkeeping
• The number of records currently required
solely for OFCCP include the written
affirmative action plan, invitations to selfidentify, and the required policy
statements.
• These required records are described in
fairly general terms.
The New Recordkeeping Realities
• Recordkeeping under the
new proposals is deployed
as a potentially potent
enforcement tool.
• It is used to commit the
contractor to a
contemporaneous
articulation of its rationale
for employment decisions.
Direct Threat Example
• Both the current and proposed Section 60741.44 discuss “Direct Threat.” The
current provision reads, “The contractor
may use as a defense to an allegation of a
violation of paragraph (c)(2) [applying
qualification standards that screen out on
the basis of disability] of this section that
an individual poses a direct threat to the
health or safety of the individual or others
in the workplace.” [bracketed language added]
Direct Threat Example Cont’d
• The new proposed parallel section adds to this
language a record creation and recordkeeping
requirement, “Once the contractor believes that
a direct threat exists, the contractor shall create
a statement of reasons supporting its belief,
addressing each of the criteria for direct threat
[citation omitted]. This statement shall be treated
as a confidential medical record in accordance
with 60-741.23(d) and shall be retained as an
employment record subject to the recordkeeping
requirements of 60-741.80.”
Direct Threat Example Cont’d
• The proposed requirement adds a new
record that must be made and kept by the
contractor.
• It prescribes the form of the record, stating
that it must specifically address each of
the regulatory requirements in the
definition of direct threat.
Direct Threat Example Cont’d
• Even if the principle of “direct threat” is
properly invoked and applied, it creates an
opportunity for at least three technical
violations. The contractor could be cited
for failure to make the record, for not
addressing each of the “direct threat”
criteria and/or for not preserving the record
as required.
Direct Threat Example Cont’d
• The new record creation and recordkeeping
requirement also forces the contractor to state
its defense, indeed commit to its defense, before
it is ever accused of a violation of the regulation
or statute.
• This requirement could focus the investigation
on how well the contractor articulated its defense
rather than on whether there genuinely was a
significant risk of substantial harm to the
individual or others.
Direct Threat Example Cont’d
• As you can see from this example
the recordkeeping requirement
proposed to be added to the
“Direct Threat” provision is
significantly different from just
requiring the contractor to keep
whatever records it happened to
create at the time the selection
decision was made. The potential
hazards for the contractor have
been significantly increased.
Direct Threat Example Cont’d
• From the perspective of OFCCP this new requirement
would be right on the enforcement wish list.
• It precludes using the “Direct Threat” defense as an
afterthought since you have to commit to it at the time of
the decision or you essentially waive it.
• It lays out for OFCCP the argument the contractor will
have to defend which makes it easier to direct the
investigation.
• It prevents the contractor from shifting rationales.
• By requiring that the regulatory criteria for direct threat
be specifically addressed it makes any violation appear
that much more willful.
The New Recordkeeping Realities
• While current recordkeeping provisions
require that Affirmative Action Plans be
available for review by employees and
applicants, they mainly focus on creating
or maintaining records for use by the
OFCCP.
The New Recordkeeping Realities
• The new recordkeeping proposals require
the contractor to create, maintain and
make available records concerning
selection decisions to the applicant or
employee who is the subject of the record
and require the contractor that to remind
that individual of his or her right to file a
complaint about the contractor’s decision.
Denial of Reasonable
Accommodation Example
• The proposed regulations provide that,
“The contractor’s reasonable
accommodation procedures shall specify
that any denial or refusal to provide a
requested reasonable accommodation will
be provided in writing. The written denial
shall include the reason for the denial and
must be dated and signed by the
authorized decision maker or his or her
designee. A statement of the requester’s
Denial of Reasonable
Accommodation Example Cont’d
• …right to file a discrimination complaint with
OFCCP shall also accompany or be included in
the written denial. If the contractor provides an
internal appeal process, the written denial shall
inform the requester about this process. The
written denial shall also include a clear
statement that participation in the internal appeal
or reconsideration process does not toll the time
for filing a complaint with OFCCP or EEOC.
Denial of Reasonable
Accommodation Example Cont’d
• Here again, we see a significant departure in the
use of the requirement to create and maintain
records.
• It is easy to see how this is also an agency wish
list item.
• As with the Direct Threat example above the
recordkeeping requirement is engineered to
require the contractor to commit to a defense of
its decision before any complaint of
discrimination has even been suggested or filed.
Denial of Reasonable
Accommodation Example Cont’d
• Any subsequent explanation will not outweigh
the contemporaneous declaration of its reasons
for not providing the accommodation. This again
locks the contractor into a position very early on.
• The most striking requirement of this provision is
the requirement to inform the applicant or
employee of the right to file a complaint with
OFCCP and of the fact that participation in any
internal appeal or reconsideration does not toll
the time for filing with OFCCP or EEOC.
Denial of Reasonable
Accommodation Example Cont’d
• It is not clear why the required accessible
EEO poster is sufficient to remind
everyone except individuals with
disabilities of their EEO rights. However,
the proposed regulations assume that this
additional reminder is necessary and
make providing it a requirement.
Denial of Reasonable
Accommodation Example Cont’d
• This provision is clearly
intended to stimulate filing of
Section 503 complaints, which
have been extremely low in
volume at OFCCP for an
extended period of time.
• Using documentation and
recordkeeping requirements in
this manner marks a shift in
how the obligation to make
and maintains records is being
deployed by OFCCP.
The New Recordkeeping
Realities
• Record creation and
recordkeeping requirements are
also being used to compel the
accumulation of data for
possible future studies.
• Both the proposed Section 503
and Section 4212 regulations
require the collection and five
year retention of certain
employment ratios.
Employment Ratios Example
• Specifically, under “Data Collection
Analysis” the contractor is required
to, “document and maintain the
following computations or
comparisons pertaining to applicants
and hires on an annual basis. The
number of referrals of individuals
with disabilities that the contractor
received from applicable
employment service delivery
systems…the number of referrals of
individuals with disabilities that the…
Employment Ratios Example
• …contractor received from other
entities, groups or organizations
with which the contractor has a
linkage agreement… the number
of applicants who self-identified
as individuals with disabilities…or
who are otherwise known to be
individuals with disabilities… the
total number of job openings and
the number of job filled, the ratio
of jobs filled to job openings…
Employment Ratios Example
• …the total number of applicants for all
jobs…the ratio of applicants with
disabilities to all applicants (applicant
ratio)…the number of applicants with
disabilities hired…the total number of
applicants hired.. The ration of individuals
with disabilities hired to all hires (“hiring
ratio”. The number of hires shall include all
employees.
Employment Ratios Example
• OFCCP explains that it is considering an annual
reporting requirement regardless of whether a
review is scheduled but does not specifically
include one in the proposed draft. It does not
explain why the contractor would need to keep
the data for five years if OFCCP intends to
collect the data every year.
• OFCCP notes that the reason for the data
collection is the dearth of utilization data
(although this does not stop it from setting a
placement goal)
Employment Ratios Example
• What is interesting about this new
requirement is that it is not really directed
at a specific compliance obligation of the
contractor. The Section 503 version does
not direct the contractor to do anything
with this data but collect it.
Employment Ratios Example
• The Section 4212 variation provides that
three years of this data should be used in
the calculation of a hiring benchmark but
does not explain why there is a five year
data retention obligation with no instruction
requiring the use of five years of data.
• This again is a fairly novel use of the
requirement to make and maintain
records.
Employment Ratios Example
• It is not clear whether the support data used to
arrive at the ratios is also required to be kept.
However, without the supporting documentation
the conclusions of any study would be
compromised.
• It would appear that the appropriate study
should be designed before a data collection
obligation intended to feed the study is imposed.
The data collection could then be cleared under
the Paperwork Reduction Act based on the
actual intended use of the data.
New Scheduling Letter
• The most important new records
related component of the proposed
new scheduling letter’s itemized
listing is the requirement for
employee level compensation data
by job group, job title, race/ethnicity
and gender.
• These new requirements are
intended to obviate the necessity of
routinely sending out 12 to 17 item
data requests when the intentionally
low threshold indicators for
compensation discrimination are
met.
New Scheduling Letter
• The fundamental problem with
record requests in the context of
compensation is the absence of
any clear proof pattern for
systemic compensation
discrimination.
• OFCCP’s compensation
enforcement efforts have largely
been characterized by
increasingly more
comprehensive data requests.
New Scheduling Letter
• In the absence of more specific
guidance, contractors will
simply be guessing at what
OFCCP will consider a
compliant pay system.
• OFCCP’s approach seems to
be to collect the data then
figure out what to do with it
rather than figuring out what to
do and then collecting the data
necessary to do it.
New Scheduling Letter
• This is likely to be a continuing source of
frustration for contractors endeavoring to
be or become compliant.
Avoiding the Ugly
• It may not be possible to avoid all of the ugly.
However, here are some things you may need to
consider.
• If the proposed requirement to document your
rationale for employment decisions at the time
the decisions are made is finalized, you will
need to put considerable thought into who you
will allow to write these explanations and who
you will have review them.
Avoiding the Ugly
For example, if you are going to proceed with a
non-selection based on direct threat you have to
track the regulatory definition in your
explanation. This means you need the person
writing it to understand the legal implications of
what they say. The upside of this is that
considerable thought will have to go into the
decision to screen anyone out based on direct
threat. It will not do to simply assert generalized
safety concerns.
Avoiding the Ugly
Not only will you have to consider the legal
implications of the rationale you commit to
print, you will have to consider how the
applicant or employee who was affected
by your decision will take your written
explanation. This individual will likely not
be trained in the law and may not be
particularly happy with you to begin with
and may circulate your written statement
to others.
Avoiding the Ugly
• It may be a very delicate matter, trying to word
these explanations for rejection to serve such
diverse purposes.
• You also need to consider that other persons
who were also rejected for the same opportunity
but who are not individuals with disabilities or
protected veterans may demand that they also
be provided with the reasons for their rejection.
Avoiding the Ugly
You need to consider in advance, and I
suggest with the assistance of counsel
how you will handle this situation should it
develop. It could get ugly.
Avoiding the Ugly
To comply with the written receipt
requirement for even oral reasonable
accommodation requests, you will
have to provide thorough training to
your supervisors and managers since
the obligation to provide the receipt
and the start of the clock for providing
the accommodation begin at the first
verbal indication of a need for
accommodation.
Avoiding the Ugly
• The regulations contain a number of very
specific requirements to maintain certain
records or to include very specific items of
information in those records. You should
go carefully through the new proposals
and catalogue each of these requirements
so that you will be prepared to examine
your documentation to ensure compliance.
Avoiding the Ugly
Identify all of the personnel who will be
impacted by these requirements and make
certain that they understand the
importance of their role in ensuring your
compliance.