Prepare for an OFCCP audit

Santomassimo Davis LLP can help you and your business prepare for an OFCCP audit. The OFCCP (Office of Federal Contract Compliance Programs) is a U.S. Department of Labor agency tasked to prevent federal contractors and subcontractors from using discriminatory employment practices when hiring, firing, promoting, transferring, or compensating employees.  If a business has a federal contract, subcontract or federally assisted construction contract, it may be subject to some or all of the civil rights requirements enforced by the OFCCP

Generally, any business that meets one of the following criteria will be subject to certain compliance obligations enforced by the OFCCP:

  • Holds a single federal contract, subcontract or federally assisted construction contract in excess of $10,000.
  • Has federal contracts or subcontracts that combined total in excess of $10,000 in any 12-month period.
  • Holds government bills of lading, serves as a depository of federal funds or is an issuing and paying agent for U.S. savings bonds and notes in any amount.

Additional requirements:

  • Contractors must develop an affirmative action program (AAP) if it has 50 or more employees and at least one contract of $50,000 or more; and
  • Contractors must develop an AAP under the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) if it has 50 or more employees and at least one contract of $150,000 or more.

In furtherance of the foregoing objective, the OFCCP conducts audits to determine if a contractor is compliant and maintains a nondiscriminatory hiring policy to ensure that there are no employment decisions made based on  race, color, religion, sex, sexual orientation, gender identity or national origin.  Proactive steps by contractors to comply with the OFCCP’s regulations will ensure that a business will continue to be eligible to receive future federal contracts and subcontracts and reduce the risk of a difficult audit and potential OFCCP penalties.

Preparing For An Audit

An OFCCP audit checklist includes all aspects of the employment process, including, sourcing, hiring, compensation, promotions, transfers, and termination.  If your company is facing an OFCCP audit for the first time, it can be helpful to know what to expect.  Initially, an OFCCP audit begins with the audited company’s receipt of a scheduling letter sent by certified mail. The OFCCP’s scheduling letter will contain approximately 22 requests for information that must be provided in 30 days.  As sample of the requested information includes the following:

  • A copy of your Affirmative Action Plan;
  • A complete listing of all of your applicants who have applied for positions, including the applicants’ race, gender and national origin;
  • Promotion and termination data;
  • Recruiting activities; and 
  • Compensation data.

Based upon its receipt of information, the OFCCP will conduct a desk audit of the contractor.  However, if the contractor’s responses are deficient, the OFCCP may conduct a more intense onsite/offsite audit.

A Desk Audit

Desk audits comprise the bulk of OFCCP audits. In a desk audit, the OFCCP will review your Affirmative Action Plan and supporting documents to determine your compliance status.  Multiple requests for additional information are common during this time. Ranging from days to years in length, many audits end directly after the desk audit. Depending on the documents the OFCCP receives, the audit will be closed, and you will get a letter that indicates no violations were present or a notification of potential discriminatory practices. If the latter occurs, your company will go through an onsite/offsite review process.

Onsite/Offsite Review 

The onsite/offsite review includes a more detailed analysis. The OFCCP may request more documentation like personnel files and compensation policies. In addition, the OFCCP may conduct facility tours, examination of required postings, and interviews with the staff and hiring managers.

OFCCP’s Key Compliance Areas

In order to properly prepared for an OFCCP audit, you will need to properly satisfy the following key compliance areas, including technical compliance, personnel activities, and compensation

Technical compliance: To address technical compliance, the contractor will need many records, including proof of a listing with the Employment Service Delivery System, VETS-4212 reports, copies of your policies on anti-harassment, nondiscrimination, maternity leave and Equal Employment Opportunity/Affirmative Action. In addition, the company should ensure that its purchase order statements have the correct EEO language and that the business has copies of self-identification forms and notification of AAP viewing hours.

Personnel Activities: The OFCCP investigation into personnel activities is largely dependent on issues identified in the desk audit. This may include information such as recruitment practices, job applications, job announcements, internal and external job postings and advertisements, personnel files, job descriptions, minimum qualifications and preferences, and documents that are created at every stage of the selection process. Termination letters, information related to involuntary and voluntary terminations will all be required too.

Compensation: Compensation discrimination is often a primary area of focus. The company needs to ensure it has a policy that explains how compensation is determined, and that your policy lists specific factors that affect compensation while preserving flexibility when considering other legitimate factors that can affect pay decisions. During the audit, the company will need individual employee pay data, including compensation that is beyond wages and annual salaries. The examiner may also request an interview to obtain more details about how pay decisions are made.


If you are being audited or want to best prepare your company for an OFCCP audit, contact Santomassimo Davis LLP and speak with an attorney.  Santomassimo Davis LLP specializes in being the premier Outside General Counsel™ to mid-cap businesses.  

The issues discussed in this article are typical of those that we handle for clients as we help them navigate the legal and regulatory matters affecting their businesses.  For help with these issues or to learn more about the Outside General Counsel™ solution, please contact us today.


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