Infrastructure Improvement Initiative
Infrastructure is a big deal. So big, in fact, that the federal government plans to spend $1.5 trillion on repairing and upgrading America’s infrastructure in the hopes of creating jobs, expanding communities and ensuring safety of the structures we depend on for daily life. The budget will be divided between state and local governments to provide incentives and funds for bridges, highways, tunnels and more. Contractors understand just how impactful their jobs are to the American landscape, and the government is taking notice in a big way.
Without a doubt, this push will bring a wave of new hires at all skill levels into the construction industry. Considering recent issues with infrastructure in the U.S., it’s important that hiring managers stay up with certifications, safety training and compliance related documents; not only for the sake of safety, but to maintain federal compliance and avoid hefty fines and other consequences.
What is an OFCCP Compliance Check?
The U.S. federal government is the world’s largest consumer, and a very particular buyer. There are numerous sets of rules and regulations federal contractors must follow depending upon the supplies they use and the services they offer. The Department of Labor (DOL) enforces these regulations through audits by the Office of Federal Contract Compliance Programs (OFCCP). The goal of an OFCCP audit is to ensure contractors are adhering to safe and non-discriminatory practices in all aspects of the employee life cycle, company-wide. There are other factors such as company size and contract dollar amount that determine what is required. According to the MRA, the top three violations fell under the following categories: record keeping, recruiting and affirmative action plans.
3 Common OFCCP Violations Auditors Look For
- Inadequate records to defend applicant flow and interview practices
- Discriminatory decision-making processes for hiring, promotions, terminations, etc.
- Compensation disparities that can’t be explained
The process includes reviewing records, interviewing employees and supervisors, inspecting worksites and more. In 2017, the average OFCCP audit lasted 720 days and cost U.S. companies a total of $23,910,884.
As the trillion-dollar infrastructure initiative begins to materialize, it’s vital that HR teams and hiring managers are proactive in their approach to passing an OFCCP audit to avoid hefty fines and other high-stakes consequences.
As the number one OFCCP violation in 2017, recordkeeping affects every aspect in an OFCCP audit. Auditors inspect documents of all types, from job postings, resumes and interview notes to transfers, promotions and terminations. Contractors must prove that each piece of documentation adheres to all regulation requirements.
Record retrieval accounts for a large portion of the time auditors spend conducting their audits. If your company relies on paper documentation, consider how a lengthy audit might impact your business. For many companies, having an auditor on-site can be stressful and may even garner negative press, ultimately impacting morale, employee engagement, retention and even future recruiting activities. Investing in an integrated recordkeeping software solution makes for safer processes and easier, faster retrieval.
Recruiting & Affirmative Action Programs
Recruiting and Affirmative Action Programs (AAPs) go hand-in-hand, as adhering to an AAP is one recruiting requirement from the OFCCP. AAPs include policies, practices and procedures that contractors implement to ensure equal opportunities in the workplace. An OFCCP auditor looks at recruiting activities beginning from an initial job posting. If job postings include language that specifically targets or excludes a certain demographic, there may be grounds for a failed audit.
Paper applications are a huge OFCCP liability because they’re easy to misplace. Ensure no applications slip through the cracks by utilizing an applicant tracking system (ATS). A good ATS will store all recruiting-related activities in a mobile platform for easy access, while maintaining the compliance federal contractors need.
AAPs aren’t just for recruiting, though. They’re meant to guide the behaviors and procedures of an entire organization at each stage in the employee life cycle. The OFCCP offers sample AAPs to guide contractors with their own plans.
As you can see, the top three OFCCP violations can be mitigated by taking the necessary steps to track personnel information. There are many variables that are still unknown about the infrastructure plan, but we know the OFCCP is here to stay. If you think you may be at risk of violating an OFCCP regulation and failing an audit, request your free HR assessment today. An Arcoro talent management strategist will be in touch with you to discuss your processes and can help you determine if your company is within compliance.