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Update on Proposed OFCCP and EEO Merger

Alex Gonzalez
Sep 12, 2017

merger

On September 7, 2017, the Senate Committee on Appropriations met and made appropriations for various federal agencies including the Department of Labor for the fiscal year ending September 30, 2018.   As part of their actions, the Committee rejected the budget proposal to merge the Office of Federal Contract Compliance Programs (OFCCP) with the Equal Employment Opportunity Commission (EEOC) and instead recommends that the OFCCP find alternate means of cutting costs including consolidating offices based on whether the offices align with the current workload needs of the agency. 

 

 

The Committee has directed the OFCCP to report back in 180 days with information regarding an inventory of the “current infrastructure and a plan to consolidate and right-size the agency.”  The federal contractor community has been anxiously awaiting news regarding the likelihood of such a merger which many organizations opposed for various reasons.  Some of these reasons included:

  • Heightened risk for contractors to face potentially increased financial penalties since the OFCCP does not currently have authority to issue punitive damages.  The EEOC has the authority to issue punitive damages. 
  • Although there is some overlap between both agencies with regards to the protected classes covered under laws and Executive Orders which they enforce, there are some differences between the agencies.  Such as, the EEOC does not have authority to investigate charges of discrimination due to veteran status. 
  • The agencies differ in that the OFCCP is proactive in handling compliance reviews to determine if covered federal contractors and subcontractors are discriminating against protected classes, but also reviewing whether these contractors are taking affirmative action to recruit, hire and advance women, minorities, individuals with disabilities and protected veterans.  The EEOC is reactive in the sense that it handles complaints filed by applicants, employees or former employees claiming discrimination under the laws which they enforce.

The budget proposal was taken from President Trump’s earlier recommendations and included the merger of the OFCCP with the EEOC.  This is not the first time that there has been talk of such a merger.  If the merger was ever to take place, there would be a significant amount of legislative action required for the change and great consideration would be needed regarding direct and indirect impacts of merger.  For one, it takes an act of Congress to make revisions which would give authority to the EEOC to have jurisdiction over the Vietnam Era Veterans’ Readjustment Assistance Act and Section 503 of the Rehabilitation Act.  However, Executive Order 11246 which requires covered contractors to take affirmative action in the recruiting and placement of women and minorities in the workplace, would require the acting President to either rescind the executive order or write a new one.  Executive Order 11246 also protects applicants and employees of covered contractor organizations from discriminating in any employment decisions with regards to not only gender and race but also national origin, religion, gender identity and sexual orientation.

Going forward, the Senate’s proposed $103 million budget is a reduction from last year’s $105 Million budget, but it also represents potential cost reductions in staffing because of rising costs in other OFCCP budget areas.  There are large differences between the Senate’s recommendation, the White House’s recommended budget of $88M, and the House’s recommended budged of $94M.  This must be resolved in the final FY2018 budget which is due on October 1st.  It is unlikely the budget will be approved by October 1st, therefore OFCCP will be funded through continuing resolutions or until the FY2018 Budget is finally approved.

While this ends the latest chapter on the potential merger of the OFCCP and the EEOC, we believe this is not the end of similar proposals for governmental cost cutting involving the OFCCP and EEOC.

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