Written Testimony of Claudia Gordon, Special Assistant to the Director, Office of Federal Contract Compliance Programs, U.S. Department of Labor

Meeting of November 16, 2011

Chairwoman Jacqueline A. Berrien, Commissioners Stuart J. Ishimaru, Constance S. Barker, Chai Feldblum and Victoria A. Lipnic:

Thank you for giving me the opportunity to testify about the Office of Federal Contract Compliance Programs (OFCCP) and our enforcement of the affirmative action provisions of the Vietnam Era Veterans' Readjustment Assistance Act of 1974, 38 U.S.C. 4212 ("Section 4212" or "VEVRAA"). I am honored to speak with you today on behalf of OFCCP Director Patricia A. Shiu. I serve as Special Assistant to Director Shiu.

We are very pleased that the Commission is examining the pressing issue of Overcoming Barriers to Employment of Veterans with Disabilities. This issue is a priority for Director Shiu and the nearly 800 dedicated men and women employed by OFCCP to enforce the civil rights of those who are employed by or seek employment with Federal contractors and subcontractors.

Who We Are

OFCCP was established in 1965 by Executive Order 11246, signed by President Lyndon B. Johnson. Over the past four decades, OFCCP's legal authorities were expanded by Section 503 of the Rehabilitation Act of 1973 (Section 503) and VEVRAA.

Housed in the U.S. Department of Labor, OFCCP holds employers who do business with the Federal government – contractors and subcontractors – to the fair and reasonable standards that they take affirmative action and prohibit discrimination with respect to sex, race, color, national origin, religion, disability and status as a protected veteran. Under Section 4212 or VEVRAA, protected veterans include disabled veterans; recently separated veterans (within three years), Armed Force service medal veterans; and active duty wartime or campaign badge veterans.

Simply put, at OFCCP, we protect workers, promote diversity and enforce the law.

The universe of companies that hold Federal contracts or subcontracts is nearly 200,000 businesses with contracts totaling almost $700 billion. Nearly one in four American workers is employed by a company that is either a Federal contractor or subcontractor. At OFCCP we protect everyone who either works for those employers or tries to get a job with them.

Given this broad jurisdiction, OFCCP's enforcement activities have a ripple effect across the entire American labor force.

What Do We Do

At OFCCP we work to end discrimination and make the victims whole again through financial remedies like back wages, benefits, salary adjustments and interest. We also force violators to correct bad policies, procedures and practices to make sure the discrimination doesn't happen again.

One of the unique features of OFCCP is that we regularly evaluate businesses even when there is not a specific complaint. Each year, OFCCP uses a neutral process to select almost four thousand contractors to investigate whether they are complying with the law.

Voluntary compliance is always our goal. We aim to support the good faith efforts of businesses who want to do right by their workers. So, each year we provide thousands of hours of compliance assistance to teach contractors how to follow the law.

But for those employers who refuse, we are aggressively going after them, pursuing litigation against the worst offenders and even going so far as to cancel their current contracts and debar them from entering into any future ones if they don't live up to their legal obligations.

Now, let me address what we do in relation to overcoming barriers to the employment of veterans with disabilities. OFCCP is responsible for ensuring compliance with the requirement in Section 4212(a)(1) that contractors take affirmative action to employ and advance in employment qualified protected veterans, and the requirement in Section 4212(a)(2)(A) that contractors list their employment openings with the appropriate employment service delivery system. Each such employment service delivery system is to provide protected veterans who are qualified with priority referrals to those job openings. It should be noted that Section 4212 does not require Federal contractors to give protected veterans a special preference in hiring. Rather, protected veterans are entitled to receive priority referrals to the job openings that Federal contractors are required to list with the employment service delivery system.

OFCCP's enforcement activities under VEVRAA include:

• Conducting compliance evaluations and complaint investigations of Federal contractors and subcontractors' personnel policies and procedures;
• Offering technical assistance to Federal contractors and subcontractors to help them understand the regulatory requirements and review process;
• Securing relief for victims of discrimination that includes, but is not limited to, back pay for lost wages;
• Negotiating conciliation agreements with contractors and subcontractors who are in violation of regulatory requirements;
• Monitoring contractors and subcontractors' progress to ensure that they are fulfilling the terms of their conciliation agreements by reviewing periodic compliance reports;
• Forming linkage agreements between contractors and job training programs to help employers identify and recruit covered veterans; and
• Recommending enforcement actions to the Solicitor of Labor.

But, OFCCP is one of three agencies within the Department of Labor (DOL) with responsibilities for administering the equal employment opportunity provisions of VEVRAA. The other agencies are the Employment and Training Administration (ETA) and Veterans Employment and Training Service (VETS).

ETA oversees priority referrals for veterans seeking employment, and is responsible for ensuring that the appropriate employment service delivery systems comply with the requirement in Section 4212(a)(2)(B) that covered veterans receive priority in referral to Federal contractor employment openings. ETA also provides leadership and oversight over the employment service offices of State workforce agencies.

VETS administers the requirement in Section 4212(d) that Federal contractors report annually on the number of covered veterans who are employees and new hires in their workforces through the VETS-100 and VETS-100A reports. VETS also administers the Local Veterans' Employment Representative (LVER) program to assist local employment service offices and One-Stop Career Centers in providing priority job referrals to veterans (38 U.S.C. 4104). Finally, VETS investigates complaints under the Uniformed Services Employment and Reemployment Rights Act, which also protects veterans from employment discrimination.

OFCCP also enforces Section 503 which prohibits discrimination against individuals with disabilities and requires that Federal contractors take affirmative action in the employment of such individuals. Section 503 protects all individuals with disabilities as defined under the Act, which may or may not include disabled veterans, as defined under Section 4212. Nevertheless, it is another law that may afford protection to veterans with disabilities.

Our Priorities

Under the leadership of Secretary Solis and Director Shiu, we have worked to re-build OFCCP and re-focus the agency's efforts around three priorities:

(1) strengthening enforcement;

(2) implementing a robust regulatory agenda; and

(3) increasing awareness through education and outreach.

Priority #1: Strengthening Enforcement

Under Director Shiu's leadership, OFCCP has shifted its enforcement activities to hold contractors accountable for their employment practices. For example, she has worked with OFCCP's Regional Directors to institute a new protocol that requires our compliance officers to increase on-site reviews which are necessary to improve verification efforts and increase contractor accountability. Rather than simply accepting contractors' self-reporting, we are mandating that compliance officers physically verify how contractors are treating protected veterans and people with disabilities, to ensure that they are providing reasonable accommodations to their workers and confirm the existence and implementation of required Affirmative Action Programs (AAPs).

OFCCP's investigative procedures also include verification that the employer is listing job openings with an appropriate employment service delivery system so that veterans may be given priority in referral. Director Shiu has made it very clear to OFCCP's compliance officers that they must check and double-check compliance with these posting requirements during their evaluations of contracting establishments. Under the Obama Administration, 756 employers have been cited for violations impacting veterans, including failure to comply with mandatory obligations to post job listings, conduct outreach and fulfill other recruitment requirements for veterans. In the past two years, 20 – 30% of our reviews have turned up violations of VEVRAA requirements. OFCCP negotiated conciliation agreements in all of these reviews to correct the violations.

When there is a finding of discrimination against a protected veteran, the contractor is required to provide back-pay and other make-whole remedies. This is usually done through a conciliation process. OFCCP negotiated a total of 694 conciliation agreements (financial and non-financial) in FY 2009; 919 in FY 2010; and 1,100 in FY 2011 with contractors who were found to be in violation of equal employment opportunity requirements under one or more of the three laws enforced by OFCCP. In addition 43% of the conciliation agreements negotiated in FY 2009, 32% in FY 2010; and 24% in FY 2011 included linkage agreements with contractors to correct recruitment violations by partnering with specified local job training programs, veterans' organizations and other community groups in order to better identify and recruit protected veterans and people with disabilities.

The need for strong enforcement is evident; however, it requires the OFCCP staff to effectively investigate and resolve cases in a timely manner. Under the previous administration, OFCCP saw its staff reduced by 28%. Thanks to President Obama and Congress, the agency's budget has increased by 25%. Under the Obama Administration, OFCCP staff has grown by more than 35% with employees working in the national headquarters, six regional offices and 45 district and area offices nationwide. Almost all of that growth has come from the hiring of nearly 200 new compliance officers to increase OFCCP's ability to evaluate, investigate and resolve cases. And I am proud to report that 28% of OFCCP's employees are veterans, demonstrating that at OFCCP, we model the values that we enforce.

In addition to growing the OFCCP team, Director Shiu made a commitment at the start of her tenure to provide high quality, uniform and nationally-run training for every new compliance officer in the agency. OFCCP has not provided such standardized training in more than a decade.

Finally, OFCCP has become more aggressive in the way it resolves cases. While we seek voluntary compliance, we are making it clear that we will hold violators accountable to the full extent of the law. In FY 2011, OFCCP more than doubled the number of cases referred for litigation in order to pursue enforcement actions against non-compliant contractors, as compared to FY 2009 and FY 2010. Director Shiu and the OFCCP staff are making it clear to the contractor community that we are prepared to impose contract-related sanctions against employers who refuse to comply with the laws enforced by OFCCP.

 OFCCP's Accomplishments

Under the Obama administration, OFCCP has recovered $30 million in back wages and interest on behalf of nearly 50,000 victims of discrimination. In the three years since President Obama took office we've audited more than 12,000 businesses which employ almost 5 million workers.

And, perhaps the most important number is: 4,800. That's how many potential job offers we've negotiated for those who have been unfairly subjected to discrimination.

Priority #2: Implementing the Regulatory Agenda

We are engaged in an ambitious process of making major revisions to OFCCP's regulations that will allow us, among other things, to better help veterans find and keep good jobs. These revisions are intended to strengthen the regulations that OFCCP enforces by adding clear measures of success and direct accountability for Federal contractors. I would like to discuss two specific items from the regulatory agenda that pertain to VEVRAA and Section 503.

VEVRAA

In April 2011, OFCCP published a Notice of Proposed Rulemaking (NPRM) seeking public comment on its proposal to revise and update the regulations implementing Section 4212. The framework articulating contractors' Section 4212 responsibilities has been unchanged since the implementing rules were first published in 1976.

Today, increasing numbers of veterans are returning from duty in Iraq and Afghanistan and many face substantial obstacles in finding employment once they leave the military. Though not the only Federal effort focused on the employment of veterans, strengthening the Section 4212 regulations is another important means by which the government can address this problem.

Prior to issuing this NPRM, OFCCP conducted town hall meetings, webinars, and listening sessions with individuals from the contractor community, state employment services, veterans' organizations, and other interested parties and obtained input on which features of the current regulations work well, which can be improved, and possible new requirements to help effectuate the objective of increasing employment opportunities for protected veterans.

Among other things, the NPRM proposes to:

• Mandate previously recommended steps contractors must take to review their personnel processes, and physical and mental job qualifications. Contractors would be required to conduct both reviews "annually," rather than "periodically," and to document specific review actions and their results.
• Require that contractors engage in a minimum of three specified types of outreach and recruitment efforts; review, on an annual basis, the effectiveness of these efforts in identifying and recruiting qualified protected veterans; and document this review.
• Clarify that to satisfy the mandatory job listing requirement, the contractor must provide job vacancy information, including a statement that it is a Federal contractor and contact information for the hiring official at each of its locations in the state, in the manner and format required by each appropriate employment service delivery system.
• Modify the invitation to self-identify requirement to require that all applicants be invited pre-offer to self-identify as a "protected veteran." Contractors would also be required to invite post-offer self-identification of the individual's specific classification(s) of protected veteran. Collection of this enhanced data will allow the contractor and OFCCP to better identify and monitor employment practices with respect to protected veterans.
• Require for the first time that contractors establish annual hiring benchmarks, expressed as the percentage of total hires who are protected veterans that the contractor will seek to hire the following year. Benchmarks would be established using readily available data on veteran availability, and would allow contractors to take into account other factors unique to the contractor, its jobs, or its location that would tend to affect the availability of qualified protected veterans. The benchmarks will provide the contractor with a quantifiable means to measure its success in recruiting and employing protected veterans.
• Require contractors to maintain several quantitative measurements and comparisons regarding protected veterans who have been referred by state employment services, have applied for positions with the contractor, and/or have been hired by the contractor. This will provide contractors and OFCCP with important information that does not currently exist, and will aid the contractor in evaluating and tailoring its recruitment and outreach efforts, and in establishing its hiring benchmarks.

OFCCP thanks everyone who submitted comments to the NPRM. We received 114 comments that are being reviewed and analyzed as part of the process of developing the Final Rules on Section 4212. We expect the Final Rule to be published next year next year.

Section 503

Over a year ago, we issued an Advance Notice of Proposed Rule Making (ANPRM) that asked the public for comment on how to strengthen the regulations implementing Section 503 of the Rehabilitation Act of 1973 in order to improve employment opportunities for people with disabilities. In spite of the fact that this law has been on the books for 37 years, the percentage of people with disabilities who are unemployed or not in the labor force remains significantly higher than those without disabilities. According to recent data from DOL's Bureau of Labor Statistics (BLS), 21% of people with disabilities were in the labor force in October 2011, compared with nearly 70% of people without a disability.

In our Section 503 ANPRM, we asked for public input on 18 key questions. The questions dealt with employment practices that are effective in recruiting, hiring, advancing and retaining qualified individuals with disabilities; available data that could be used to establish hiring goals and conduct utilization analyses of individuals with disabilities; and ways to strengthen linkage agreements between Federal contractors and organizations that focus on the employment of qualified individuals with disabilities. OFCCP has analyzed the comments it received from the ANPRM to craft proposed regulatory changes to Section 503 that better address disparities that people with disabilities – including veterans with disabilities – face in the workplace. The proposed rule is currently with OMB.

Priority #3: Education and Outreach

Finally, we have dramatically expanded our efforts to reach out to the communities of workers we serve so that they know their rights in the work force and understand how to file complaints that will be investigated and resolved in a timely manner.

Under the previous administration, OFCCP's "stakeholder outreach" revolved primarily around compliance assistance: educating and supporting the contractors OFCCP is charged with regulating. Director Shiu believes in being proactive and reaching out to industry groups who are making good faith efforts to comply with the law. However, that cannot and will not be the sum total of OFCCP's outreach efforts.

Director Shiu created a new team at OFCCP dedicated to focusing on community-based engagement as part of the agency's communication and outreach strategies. We are working to develop partnerships with the civil rights, workers' rights, advocacy and service organizations who serve our protected veterans on a daily basis. Using new technologies, we are educating veterans about their rights in the job market. We are showing workers how to identify discriminatory practices and creating avenues for two-way communication between communities of veterans and OFCCP.

Social media networks, informative and accessible web platforms and online training software are important tools OFCCP is and will continue using to reach these audiences. However, nothing is as powerful as direct community outreach which connects us to the people we are mandated to serve. That is why so much of Director Shiu's and our regional leaders and staff time is spent traveling around the country and speaking at community forums and town hall meetings to hear from veterans and to educate them about OFCCP.

In FY 2011, OFCCP hosted more than 197 outreach events where VEVRAA and Section 503 were the primary topics of discussion, more than tripling the outreach efforts over the past two years. These events were attended by representatives from 254 organizations that serve individuals with disabilities and veterans. Moreover, nearly every outreach event OFCCP has conducted included specific sessions regarding veterans.

Director Shiu is making important strides to forge a new relationship with this community and its leaders – a relationship that is built on both trust and a realistic understanding of OFCCP's enforcement activities.

On a related note, our outreach efforts to the communities of workers OFCCP protects are critical to making sure that workers know we have their backs and to increasing the number of individual complaints filed with OFCCP. In recent years, OFCCP had not prioritized individual complaints. Instead, the agency focused on systemic discrimination across businesses and industries. In fact, the previous administration further narrowed OFCCP's activities by focusing primarily on systemic discrimination in blue collar jobs. But cases involving protected veterans and persons with disabilities rarely raise systemic issues. Increasing the number of individual complaints OFCCP receives and investigates will increase the agency's ability to protect veterans.

Conclusion

Thank you for the opportunity to represent OFCCP today. Notably, for the first time in more than 46 years, OFCCP, EEOC and the Department of Justice are building true collaborative partnerships – from our national headquarters to our field offices. This TriAgency collaboration seeks to reduce duplication and maximize efficiency across our agencies by sharing information, coordinating litigation and referring cases as appropriate. This collaboration is crucial to advancing our respective efforts to root out discrimination against service men and women who have served our country and ensure that workplaces are fair and fee of discrimination.

Director Shiu is deeply committed to making sure that Federal contractors and subcontractors are creating job opportunities for veterans. It is a commitment that is shared by Secretary Solis and all of my colleagues at OFCCP. We look forward to continuing to work together with EEOC and all of the other partners here today to ensure more good jobs for veterans.

For more information about OFCCP, instructions on how to file a discrimination complaint or to be added to the agency's mailing list, please go to www.dol.gov/ofccp.