With New Rules In Limbo, OFCCP Ramps Up Vet Hiring Push

By Dietrich Knauth

Law360, New York (August 31, 2012, 6:11 PM EDT) — In lieu of new veterans hiring rules that have stalled during an ambitious regulatory push in the Office of Federal Contract Compliance Programs, the government is leaning on audits and more aggressive interpretations of current regulations to support its affirmative action policies, experts said.

The OFCCP has proposed new affirmative action rules for veterans that would require contractors to track those who apply for jobs and write reports explaining decisions not to hire protected veterans. But a regulatory logjam in the OFCCP has put the proposed regulation more than nine months behind schedule, and many experts wonder if the rules will be finalized before a November election that could change the OFCCP’s makeup regardless of whether there is a change in the White House.

In the meantime, the OFCCP is using audits to take a much harder look at contractors’ good-faith efforts at veterans outreach; expecting contractors to check back and evaluate the results of those efforts; and demanding information about how many applicants were referred by a particular job board or organization, how many applicants were interviewed and how many were hired.

“We’ve seen these changes over the last 18 months, and the changes are massive,” Mickey Silberman, head of the affirmative action and OFCCP practice at Jackson Lewis LLP, said. “OFCCP’s approach to good-faith efforts has changed in a fundamental way.”

Employers who appear to be going through the motions will face greater scrutiny during OFCCP audits, and the agency will issue technical violations to contractors that are found deficient in either outreach or recordkeeping, according to Silberman, who spoke about the issue during the 2012 Industrial Liaison Group meeting. To protect themselves, contractors should make more of an effort to track the number and quality of applicants referred by recruitment sources and stop using ineffective recruitment sources, Silberman said.

“It’s not about getting through the audit. The goal is to increase veterans’ employment,” Silberman said. “What’s the point of good-faith efforts if you don’t monitor their effectiveness?”

The OFCCP is focusing its efforts on affirmative action and applicants who are not hired in part because it is rarely able to substantiate claims of discrimination against veterans or disabled workers who have been hired, according to David Cohen of the Center for Corporate Equality.

OFCCP data shows that the agency has alleged discrimination against veteran or disabled workers just three times during 22,000 compliance evaluations conducted since 2007, Cohen said. And in 871 investigations initiated since 2004 as a result of disabled or veteran workers complaining to the OFCCP, it identified just 60 violations, he added.

In response to the OFCCP’s more aggressive audits, contractors should make efforts to improve their outreach to veterans, but they shouldn’t try to anticipate the stalled regulations and start asking applicants whether or not they are veterans, according to Jennifer Seda, an attorney at Jackson Lewis. Employers have no obligation to ask, and if they do, they could open themselves up to OFCCP scrutiny if they do not hire or interview veteran applicants.

“Until the regulations are passed, please don’t ask your applicants if they are veterans,” Seda said.

While Silberman and Seda both recommended that contractors do more to evaluate the results of their outreach efforts, they also said contractors should push back against another OFCCP attempt to use current regulations on behalf of veterans. The agency has adopted a more aggressive interpretation of a current rule that requires contractors to undertake a “thorough and systematic consideration” of “known veterans” for all positions, including new hires, promotions and retraining opportunities.

Even if no veterans apply for a position, the OFCCP has taken the position that contractors should look internally at their veteran employees, as well as applicants for other positions, to see if they are qualified and interested, which would put a large burden on some contractors and give veterans a kind of preferential treatment that runs counter to the philosophy of equal employment opportunity, Silberman said. Contractors should consider fighting the OFCCP on the issue — even if the legal fight costs more than a settlement — because it’s a fight they can win, he said.

“The EEO lawyers have a pretty good sense that this interpretation makes people uncomfortable, and it should,” Silberman said.

The new audit policies are, at least temporarily, taking the place of the proposed new rules that would require contractors to set hiring goals for veterans; compile additional data on hiring decisions, including reports to explain why qualified veterans not hired; and keep relevant records for five years. Contractors and their advocates, including attorneys with Littler Mendelson PC, the Association of General Contractors and the Equal Employment Advisory Council, argue that the rule creates enormous additional burdens on employers while not significantly increasing veterans’ rights or opportunities for employment.

“These regulations are not going to create revenue-generating jobs for veterans. They are not going to level the playing field for qualified veterans and ensure equal access,” Littler Mendelson said in response to the veterans rule. “They are going to create layers upon layers of overhead for companies ill-prepared to absorb these costs in the current economy.”

But despite contractors’ concerns about the proposed veterans rule, it is the most likely of several pending OFCCP regulatory changes to be finalized before the election, because of political support for veterans affirmative action. While other pending rules — including a proposal that would require contractors to work towards a goal of hiring disabled workers in 7 percent of its jobs — would likely be scrapped if President Barack Obama is not re-elected, the veterans rules have a chance to survive even if Mitt Romney becomes president, according to Silberman. And even if Romney wins, Obama’s OFCCP could still push them out as midnight regulations, he said.

“For all the proposals, they’d like to have something to show for it,” Silberman said. “This should have been an easy one. Everybody wins, and the administration gets to trumpet the fact that they’re helping veterans.”

Published by Law360

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