What Will the OFCCP Look Like in a Trump Administration?01.20.17
The Office of Federal Contract Compliance Programs (OFCCP) is an agency that could experience a number of changes under the Trump administration. The OFCCP is the office that ensures employers doing business with the federal government comply with certain nondiscrimination laws. Under the Obama administration, the OFCCP implemented significant changes to compensation, reporting, and affirmative action requirements for federal contractors and subcontractors. Although many of those changes became hot-button issues during the campaign, President Trump has not publically expressed any views on the role or future of the OFCPP. But, his recent pick for U.S. Secretary of Labor, Andy Puzder, the CEO of CKE Restaurants, is telling. It signals that a pro-employer approach is likely for the OFCCP.
The OFCCP has come under fire from the GOP-controlled Congress in the last few years. For Fiscal Year (FY) 2016, Congress cut the OFCCP's budget by $1 million and criticized the agency's enforcement practices for relying on statistical analysis to prove discrimination. Both the House and Senate Appropriations Committees characterized the OFCCP's enforcement approach under President Obama as adopting an informal "quota" system. The Senate Appropriations Committee also criticized the OFCCP for subjecting federal contractors to overly broad and unnecessary document and data requests during compliance reviews, while the House Appropriations Committee called for an end to the OFCCP's practice of "threatening sanctions . . . to induce contractors to waive their legal rights and to enter into conciliation agreements that are not justified by the evidence." While it remains to be seen what direction President Trump and his Secretary of Labor will take with regards to the OFCCP, many expect the Trump administration to echo the sentiments voiced by the GOP-controlled Congress.
The Trump administration may also abandon a centerpiece of the Obama administration's OFCCP enforcement priorities - identifying gender disparities in employee compensation. Under the prior administration, the OFCCP began requesting detailed compensation data from federal contractors during compliance reviews as part of its efforts to assess pay nondiscrimination using statistical analysis. This approach led to more aggressive audit practices by the OFCCP but also significantly increased the time to complete an audit, in large part due to the agency's expansive requests for detailed compensation data during its compliance reviews. As a result, the number of new OFCCP compliance reviews are at an all-time low as the agency struggles to process and analyze compensation data provided by federal contractors. If President Trump re-shifts the agency's priorities back to traditional nondiscrimination enforcement and away from statistical analysis, OFCCP compliance reviews will likely move at a much faster pace, and the administrative burdens faced by federal contractors selected for compliance review will lessen.
There is also the possibility that the Trump administration will take a particularly harsh stance towards the OFCCP, given the strong political opposition from Congress and its recent history of ineffective enforcement. The agency is both underfunded and understaffed; its current headcount is at its lowest point in the last 40 years. In recent years, some have suggested scrapping the OFCCP altogether and merging it with the EEOC. Given President Trump's and Mr. Pudzer's opposition to the overregulation of businesses and Congress's apparent hostility towards the beleaguered agency, such a radical transformation of the OFCCP cannot be ruled out under the new administration.