A current question before the Trump Administration is whether the OFCCP has outlived its usefulness. The Heritage Foundation rightly asks whether there is a need for the OFCCP given that many of its current initiatives are the purview of other agencies. Moreover, there is a real question of the effectiveness and ROI of the agency.
Fifty-two years ago, President Johnson signed off on Executive Order 11246 Equal Employment Opportunity for Government and Contractors and Subcontractors of the federal government. In particular, the EO is known as the affirmative action EO. It was not until General Order 4 under the Nixon administration that any implementing regulations were established, and it was not until 1978 that the current set of regulations, as amended, were promulgated and the agency Office of Federal Contractors Compliance Programs (OFCCP) in the Department of Labor was formed. Significant amendments to the regulations were promulgated in 2001, 2006, and 2014-2016 to meet the requirements of current technology usage and legislative and case law.
OFCCP compliance/enforcement priorities changed as well over the years. At first it was a compliance agency. Regulations stated what is necessary for an affirmative action plan and outreach, and contractors were required to be exact with these requirements or be cited. Outreach not only included traditional minorities and women but also included veteran and individuals with disabilities.
In the late 1990s the agency relaxed the citations for technical requirements and focused more on good faith efforts and review of employment activity for possible indicators of discrimination. OFCCP is known for being the expert for rooting out systemic hiring discrimination. 95% of all discrimination cases over the years were hiring discrimination cases. It was also during the 1990s that the agency found its bearing to root out compensation disparities, although methodologies were constantly evolving over time.
During the Bush administration, OFCCP focused more on discrimination analysis. Resources were cut, and the agency’s focus was primarily on employment activity including compensation and technical compliance.
The Obama administration changed this paradigm. The agency was beefed up. Contractors seemed to be considered the “enemy.” OFCCP was now a worker protector agency. Technical assistance dropped, and audits became more contentious. The agency started a big push on pay discrimination, but found very few cases. In addition, the relationship between OFCCP and the contractor community became strained and contentious. The agency experienced great increases in resources.
Source: 2007-2017 OFCCP Budget Justifications
But given all the resources pushed into OFCCP, it was performing at about the same or less than the agency did under the Bush administration, which had fewer resources.
Source: OFCCP
Furthermore, while the agency focused on regulation updates in the later years of the Obama administration, it lost focus on audits.
Source: OFCCP
While the number of audits dropped, the emphasis switched to pay disparity. Bigger systemic cases became the focus. Yet the Obama administration arguably did not perform better than the Bush administration in finding discrimination, even with the bigger budget and greater personnel.
Most audits are closed with a letter of compliance and the increase of conciliation agreements are focused on good faith efforts and technical violations. Discrimination cases remain about the same. Therefore, it would appear that most federal contractors have gotten the message and are doing the right things.
The efficacy of OFCCP has long been debated. It appears today to be a redundant agency. Veteran and disability hiring agendas are the purview of the Veteran Employment and Training Services (VETS) and Office of Disability Employment Policy (ODEP), respectively. In addition, the EEOC is the discrimination investigation agency of the government and is quite good at its mission. The question before the Trump administration is whether OFCCP is truly needed in today’s business environment.
Since 1995 the Heritage Foundation has advocated for the elimination of the agency with an annual savings estimated at approximately $100 million. The Trump administration is reportedly relying on the Heritage Foundation’s proposed budget to squeeze the savings needed to increase the Department of Defense budget. The administration’s proposed budget is scheduled to be released on March 16th. As most companies are audit compliant, and OFCCP appears to be a redundant agency, it may be that OFCCP has outlived its mission.