OFCCP Announces New Enterprise-Wide Voluntary Compliance Program for Companies with Model D&I Programs

February 22, 2019

The U.S. Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) has announced a new voluntary compliance process that would potentially give federal contractors with “model diversity and inclusion programs” a five-year grace period from future audits—as long as the company agrees to substantial corporate-wide review and reporting requirements.

How your company could benefit: The new Voluntary Enterprise-Wide Review Program (VERP) will recognize two tiers of contractors, with the top-tier being removed from the pool of contractors scheduled for compliance evaluations for up to five years.

The price:  Qualifying for top-tier will require contractors to allow OFCCP to audit their headquarters and a sample or subset of their establishments, “maintain a workforce free of discrimination or other material violations, and provide periodic reports and information to OFCCP through which OFCCP can confirm these efforts.”

  • The announcement did not specify how many additional establishments would be audited.

The limits to the benefit: Under the program, OFCCP reserves the right to conduct individual and/or third-party complaint investigations of contractors and to terminate any VERP agreement and return the contractor to the pool from which OFCCP may schedule compliance evaluations.

Takeaway: As well-intentioned as the new compliance process is, federal contractors will need to assess whether it is worth the cost, and many if not most may decide to stick with the current audit process.