The Office of Federal Contract Compliance Programs (OFCCP) has finalized its updated Scheduling Letter and Itemized Listing, which greatly expands the initial response burden on federal contractors selected for an audit. The updated letter applies to all supply and service compliance evaluations starting August 24, 2023.

Below are some of the major changes.

  • The OFCCP will now issue the Scheduling Letter to contractors via email with a read receipt requested instead of by traditional postal mail.
  • For contractors in a “campus-like setting” such as hospitals and post-secondary institutions, they are required to submit all information and AAPs for the same campus in the same city, rather than by “AAP establishment.”
  • There is more specificity on the documentation a contractor must submit regarding their Section 503 (disability) and VEVRAA (veteran) outreach and positive recruitment efforts; including analyzing the effectiveness of each effort and submitting a list of all “action-oriented programs” designed to correct any problem areas.
  • The new compensation data request has expanded to require not one but two snapshots of compensation data: the “as of” date of the organizational display or workforce, and the date of the prior year’s organizational display or workforce analysis.
  • The new letter asks for more documentation and policies related to compensation such as “policies, guidance, or trainings regarding initial compensation decisions, compensation adjustments, the use of salary history in setting pay, job architecture, salary calibration, salary benchmarking, compensation review and approval, etc.”
  • A new item requires documentation that contractors have satisfied its obligation to evaluate its “compensation system(s) to determine whether there are gender-, race-, or ethnicity-based disparities,” as part of the contractor’s “in-depth analyses of its total employment process” required by 41 CFR 60-2.17(b)(3). The documentation must demonstrate details such as when the compensation analysis was completed, the number of employees included in the analysis, which forms of compensation were analyzed, and the methods of analysis used (e.g., multiple regression analysis, rank-sum tests, etc.).
  • A new item requests Companies to “identify and provide information and documentation of policies, practices, or systems used to recruit, screen, and hire, including the use of artificial intelligence, algorithms, automated systems, or other technology-based selection procedures.”

The OFCCP has also provided FAQs with more information about the new letter. If you have questions or concerns about the new audit letter, feel free to reach out to your Maly consultant.