11 May 2018

Two Minute Update: How Does OFCCP Select Your Company for an Audit?

Ever wonder how OFCCP selects federal contractors each year for an enforcement audit?  It’s a key issue because an OFCCP audit is typically a several year, time-consuming, and extremely burdensome exercise for HR to deal with.

An OFCCP audit is riddled with a minefield of financial risk, since many have resolved for millions of dollars.  And unlike the EEOC, OFCCP doesn’t wait for an employee complaint – it reaches out and picks companies to investigate in its so-called neutral selection process.

So exactly how does a federal contractor get targeted?  Well, in an attempt at transparency, OFCCP recently revealed for the first time how they’ll select federal contractors for enforcement audits in 2018.  The results are surprising.

It’s really a process of elimination.  OFCCP starts out with the entire universe of some 200,000 direct federal contractors.  For 2018 the agency then removed from its database those establishments with less than 70 employees, with contracts valued at less than $50,000, and those whose contracts have not been modified in the past 15 months – assuming they are cancelled.  OFCCP then also removed any establishments currently undergoing an audit or having completed one in the last 5 years.  The Agency then added EEO-1 data, industry codes and DUN’s ID numbers.  Establishments are then ranked by size and the longest contract expiration date.  Those remaining on the list are then selected randomly.  The final selection is thus neutral, but with a “priority” for those with higher employee headcount.

There’s no way for OFCCP to accurately predict which contractors it believes are discriminating against women or minorities in hiring, promotions, terminations or pay.  Nevertheless, what does seem to matter is that establishments with more employees, and a longer duration contract, have a greater chance of being targeted by your “friends” in the government.

We’ll keep you updated on OFCCP issues as 2018 unfolds.