The New Recordkeeping Realities

Presented by

Sandra S Zeigler

Package

The GoodThe 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 GoodMost 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 BadThe 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 UglyThe 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 self-identify, 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 60-741.44 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…

Linkage Agreement

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 UglyFor 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 UglyNot 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 UglyYou 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 UglyTo 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 UglyIdentify 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.