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Trump’s FY2018 Budget Proposal – Impact on DOL and OFCCP

2017-05-24

OFCCP’s budget significantly decreased and merger proposed with EEOC for FY 2018

For FY 2018 the DOL’s proposed budget allocates $88m to OFCCP which is a decrease of $17.3m from FY 2018.  Headcount appears to be the main reduction with a proposed full-time equivalent (FTE) headcount of 440, a reduction from 571 FTEs.  The travel budget has also been reduced from $1.4m to $0.9m. 

Additionally, the proposal calls for the OFCCP to be incorporated into the EEOC by the end of FY 2018 with the goal to create “one agency to combat employment discrimination.” The merger will not do away with the responsibilities of the agency, but place them under a different umbrella. According to the proposal, EEOC will pick up every aspect of OFCCP’s operations to include: compliance evaluations, compliance assistance, policy, training, stakeholder outreach and education, personnel, contracting and procurement, and information technology. 

If the merger occurs, the following activities have been identified with EEOC and OFCCP working together to “collectively coordinate the transition.”

  • Drafting and reviewing legislative proposals amending VEVRAA and Section 503;
  • Drafting and reviewing a new Executive Order amending EO 11246;
  • Working on rulemaking to transfer to EEOC the OFCCP’s authority under VEVRAA, Section 503, and EO 11246;
  • Restructuring compliance officer training and coordinating with EEOC investigator training;
  • Merging the OFCCP Help Desk into the EEOC organization;
  • Closing out pending audits and audit recommendations by working with the GAO and Office of the Inspector General;
  • Identifying redundant IT and procurement systems; 
  • Developing a communication strategy to create a transition before and during the merger.  OFCCP’s digital communication system will serve as the tool for conveying information before and during the transfer of authority to EEOC.
  • Revising the Federal Contract Compliance Manual (FCCM) and finalizing the training program framework to support future enforcement efforts.
It has been suggested that two Skilled Regional Centers, based in San Francisco and New York, could replace the current structure of numerous area and district offices, resulting in further cost reductions.  The Centers would be staffed by “highly skilled and specialized compliance officers capable of handling various large, complex compliance evaluations in specific industries, such as financial services or information technology.”

During the transition period of FY 2018 (October 1, 2017 – September 20, 2018), the proposal directs the OFCCP to:
  1. Prioritize “those evaluations with evidence of systemic pay issues;” and
  2. Provide “intensive compliance assistance” to contractors and subcontractors engaged in mega-construction projects.
This appears to be a shift from the agency’s focus on applicant and hiring issues to pay and construction. 
The interesting note is that the EEOC FY 2018 budget proposal is flat without any increase.  It seems like a difficult task to roll-in the OFCCP without having an increase in budget.

Keep in mind that the budget is proposed and is expected to go through various revisions.  We anticipate that special interest and civil rights groups will not support the merger and will put pressure on their constituents to vote against it.  As a matter of fact, yesterday members of both parties in the Congress criticized much of the budget proposal.   There is a long legislative road ahead before this proposal becomes final, considering the need for changes in legislation related to EO 11246, VEVRAA and Section 503. 

The foregoing has been prepared for the general information of clients and friends of Workplace Dynamics LLC and is not being represented as being all-inclusive or complete. It has been abridged from legislation, administrative ruling, agency directives, and other information provided by the government. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel.