[Federal Register Volume 61, Number 99 (Tuesday, May 21, 1996)]
[Proposed Rules]
[Pages 25516-25526]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-12687]
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_______________________________________________________________________
Part II
Department of Labor
_______________________________________________________________________
Office of Federal Contract Compliance Programs
_______________________________________________________________________
41 CFR Parts 60-1 and 60-60
Government Contractors, Affirmative Action Requirements; Implementation
of Executive Order 11246; Proposed Rule
Federal Register / Vol. 61, No. 99 / Tuesday, May 21, 1996 / Proposed
Rules
[[Page 25516]]
DEPARTMENT OF LABOR
Office of Federal Contract Compliance Programs
41 CFR Parts 60-1 and 60-60
Government Contractors, Affirmative Action Requirements;
Implementation of Executive Order 11246
AGENCY: Office of Federal Contract Compliance Programs (OFCCP), ESA,
Labor.
ACTION: Notice of proposed rulemaking.
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SUMMARY: This proposal would revise certain provisions of the current
regulations implementing Executive Order 11246, as amended, to reduce
burdens on the regulated community and to improve administration of the
Order. The Executive Order prohibits all nonexempt Government
contractors and subcontractors, and federally assisted construction
contractors and subcontractors, from discriminating in employment, and
requires these contractors to take affirmative action to ensure that
employees and applicants are treated without regard to race, color,
religion, sex and national origin. The proposed revisions to the
regulations on obligations of contractors and subcontractors concern
record retention, compliance monitoring, and segregated facilities. In
addition, the proposal would amend certain provisions of the
regulations to parallel provisions included in OFCCP's final rule
implementing Section 503 of the Rehabilitation Act of 1973, as amended,
which was published in the Federal Register on May 1, 1996. The
proposal also would transfer some sections of the regulations on
contractor evaluation procedures for supplies and services to the
regulations on obligations of contractors and subcontractors and delete
the remainder of the sections. Finally, this proposal would withdraw
portions of a final rule published on December 30, 1980 (and
subsequently suspended), and it hereby withdraws a proposed rule
published on August 25, 1981 (and supplemented on April 23, 1982).
DATES: To be assured of consideration, comments must be in writing and
must be received on or before July 22, 1996.
ADDRESSES: Comments should be sent to Joe N. Kennedy, Deputy Director,
OFCCP, Room C-3325, 200 Constitution Avenue, N.W., Washington, DC
20210.
As a convenience to commenters, OFCCP will accept public comments
transmitted by facsimile (FAX) machine. The telephone number of the FAX
receiver is 202-219-6195. To assure access to the FAX equipment, only
public comments of six or fewer pages will be accepted via FAX
transmittal. Receipts of FAX transmittals will not be acknowledged,
except that the sender may request confirmation of receipt by calling
OFCCP at 202-219-9430 (voice), 1-800-326-2577 (TDD).
FOR FURTHER INFORMATION CONTACT: Joe N. Kennedy, Deputy Director,
OFCCP, Room C-3325, 200 Constitution Avenue, N.W., Washington, DC
20210. Telephone 202-219-9475 (voice), 1-800-326-2577 (TDD). Copies of
this NPRM, including copies in alternate formats, may be obtained by
calling 202-219-9430 (voice), 1-800-326-2577 (TDD). The alternate
formats available are large print, electronic file on computer disk and
audio-tape.
SUPPLEMENTARY INFORMATION:
Background
OFCCP's regulations at 41 CFR chapter 60 implementing Executive
Order 11246, as amended (30 FR 12319, September 28, 1965) have not
undergone substantive revision since the 1970s. A final rule was
published on December 30, 1980 (45 FR 86215; corrected at 46 FR 7332,
January 23, 1981), but was stayed in accordance with Executive Order
12291 on January 28, 1981 (46 FR 9084). This rule later was stayed
indefinitely on August 25, 1981 (46 FR 42865), pending action on a
notice of proposed rulemaking (NPRM) published on that same date (46 FR
42968; supplemented at 47 FR 17770, April 23, 1982). OFCCP has taken no
further action on the August 25, 1981, proposal, or consequently on the
1980 stayed final rule.
Both the 1980 final rule and the 1981 proposal addressed 41 CFR
part 60-1. The changes they would have made to 41 CFR part 60-1 have
been considered in developing today's NPRM and, where pertinent, are
discussed in the Section-by-Section analysis below. To avoid conflict
with today's NPRM, OFCCP proposes to withdraw part 60-1 of the 1980
final rule, and hereby withdraws the 1981 and 1982 NPRMs in their
entirety.
As discussed in the Section-by-Section analysis, today's NPRM
proposes changes to 41 CFR part 60-1 provisions concerning record
retention, compliance monitoring, and segregated facilities. In
addition, to ensure consistency in OFCCP programs, today's NPRM
proposes conforming certain part 60-1 provisions to parallel provisions
revised by OFCCP's final rule implementing Section 503 of the
Rehabilitation Act of 1973, as amended (61 FR 19336; May 1, 1996).
These proposed conforming changes would affect several definitions and,
for example, some aspects of enforcement.
Finally, today's NPRM proposes the deletion of most sections of
part 60-60 from the regulations and the transfer of a few sections to
part 60-1. The deleted sections describe OFCCP's traditional compliance
review process and the transferred sections relate to preservation of
confidentiality of data submitted by contractors, the timeframe within
which a contractor must submit an affirmative action program and
supporting documents and authorization for agreements concerning
nationwide AAP formats. Similar deletions and transfers were contained
in the 1980 final rule and the 1981 proposal.
Section-by-Section Analysis
Section 60-1.3 Definitions
The proposal adds one new definition for compliance evaluation and
revises several others to render them consistent with the definitions
included in OFCCP's Section 503 final rule.
``Compliance Evaluation.'' The proposal adds a new definition of
the term ``compliance evaluation'' to reflect OFCCP's authority to
conduct a variety or range of activities to assess a contractor's
compliance status. Previously OFCCP generally has conducted a full
compliance review of a contractor, assessing all its employment
practices, whenever it reviewed a contractor's status. As discussed in
more detail in the preamble discussion of Sec. 60-1.20, the proposal
would allow OFCCP to use any one or a combination of actions to examine
a contractor's compliance with one or more of the Executive Order 11246
requirements. Thus, the proposal would allow OFCCP to streamline the
review process for many contractors. The proposal also would allow
OFCCP to focus its investigatory resources where they are needed, while
conducting some level of review of a broader segment of the contractor
universe.
``Contract.'' The current regulation defines the term ``contract''
as ``any Government contract or any federally assisted construction
contract.'' The proposal adds the word ``subcontract'' to this
definition (``any Government contract or subcontract or any federally
assisted construction contract or subcontract'') to eliminate the need
to reference ``subcontract'' each time ``contract'' is referenced in
the body of the regulation. Accordingly, the proposal generally
references the term ``subcontract'' only when necessary to
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the context. This same change would have been made by the 1980 final
rule.
``Deputy Assistant Secretary.'' The Director of OFCCP recently was
redesignated the Deputy Assistant Secretary for Federal Contract
Compliance Programs. The proposal, therefore, substitutes a definition
of ``Deputy Assistant Secretary,'' for the definition of ``Director''
in the current regulations, and makes this title change throughout the
proposal. To ensure internal consistency, OFCCP intends to issue a rule
making a corresponding universal change to its regulations before
publishing the final rule resulting from this proposal.
``Government Contract.'' The proposed definition of ``Government
contract'' is revised to clarify that covered contracts include those
under which the Government is a seller of goods or services, as well as
those under which it is a purchaser. This change reflects OFCCP's long-
standing interpretation of the scope of the Executive Order, upheld in
Crown Central Petroleum Corp. v. Kleppe (424 F. Supp. 744 (D. Md.
1976)), that sales by the Government result in covered contracts.
Hence, the proposal substitutes a reference to contracts for the
``purchase, sale or use of personal property or nonpersonal services''
and a definition of the term ``personal property'' for the existing
reference to the ``furnishing'' of supplies or services, or for the use
of real or personal property, including lease arrangements.
``Rules, regulations and relevant orders of the Secretary of
Labor.'' A rule published on May 3, 1996 (61 Fed. Reg. 19982) amended
the definition of ``Secretary'' to include a ``designee'' of the
Secretary of Labor. The definition of ``rules, regulations and relevant
orders of the Secretary of Labor'' in the current regulations, which
makes reference to the designee of the Secretary, therefore is no
longer necessary and is omitted in this proposal.
``Subcontract.'' The proposal conforms the current definition of
``subcontract'' to the proposed definition of ``Government contract''
above; that is, as revised, the proposed definition references
agreements for the ``purchase, sale or use'' of personal property or
nonpersonal services.
``United States.'' OFCCP proposes to revise the current definition
of ``United States'' by deleting the Panama Canal Zone (which was ceded
back to Panama under the terms of the Panama Canal Treaty) and by
specifying the possessions and territories of the United States as: the
Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern
Mariana Islands, and Wake Island.
Section 60-1.8 Segregated Facilities
Today's proposal would revise Sec. 60-1.8, which currently sets out
a general prohibition regarding the maintenance of segregated
facilities (paragraph (a)) and a certification requirement regarding
compliance with that obligation (paragraph (b)).
Specifically, under paragraph (a) of Sec. 60-1.8, nonexempt
contractors and subcontractors must ensure that facilities they provide
to their employees are not segregated on the basis of race, color,
religion or national origin. Further, paragraph (a) states that this
obligation extends to all contracts containing the equal opportunity
clause, regardless of the amount of the contract.
Paragraph (b) of the regulation provides that, prior to the award
of a Government contract or federally assisted construction contract,
each contracting agency or applicant for Federal financial assistance
involving a construction contract shall require the prospective prime
contractor to submit a certification that it does not and will not
maintain segregated employee facilities. Paragraph (b) also requires
prime contractors and subcontractors, prior to the award of
subcontracts, to obtain such a certification from their prospective
subcontractors.
This proposal would conform Sec. 60-1.8 with the Executive Order's
general nondiscrimination requirements, by adding sex to the list of
bases upon which segregation is prohibited, with the proviso that
separate or single-user restrooms and necessary dressing or sleeping
areas shall be provided to assure privacy between the sexes. The
proposal also would make a number of stylistic changes to existing
paragraph (a).
OFCCP proposes to withdraw the written certification requirement
(paragraph (b) of the current regulation). The certification
requirement originally was incorporated into the Executive Order
regulations in 1967 (see 32 FR 7439, May 19, 1967). At that time,
segregation in employee facilities, especially on the basis of race,
was not uncommon. The certification requirement was intended in large
part to put contractors on notice that such segregation was unlawful
and would not be tolerated. In the intervening 28 years, as a result of
civil rights law enforcement and other factors, employers have become
aware that segregation in employee facilities is unlawful. Indeed, such
segregation has been significantly reduced. Because today's proposal
would retain and strengthen the basic prohibition regarding segregated
facilities, which OFCCP will continue to monitor through compliance
investigations, the proposed withdrawal of the certification
requirement will not reduce protections afforded to workers.
Withdrawing the certification requirement will significantly reduce
compliance burdens on contractors. The Government lets approximately
350,000 prime contracts each year. If it is assumed that each prime
contract results in an average of four subcontracts, and that it takes
about one-half hour to prepare and submit the written certification,
eliminating the certification requirement would reduce compliance
burdens on the contractor community by roughly 875,000 hours. This
estimate may significantly understate the savings; many contractors
annually solicit the certification from all of their prospective
vendors rather than limiting their request to those firms that actually
are subcontractors on Federal projects.
The 1980 final rule, and the 1981 proposal, would have made similar
revisions to the segregated facilities regulation.
Section 60-1.12 Record Retention
OFCCP's primary Executive Order recordkeeping and record retention
regulations are contained in 41 CFR 60-1.40 and 60-4.3, and parts 60-2
and 60-3 (the Uniform Guidelines on Employee Selection Procedures,
hereafter UGESP). The regulations require certain contractors to
develop, implement and maintain a written affirmative action program
(AAP) for each of their establishments; to compile the results of the
program; to update the program annually; and to provide the program and
supporting documentation to OFCCP upon request; to maintain data on
applicants, selection and referral procedures and, as applicable,
adverse impact and evidence of validity; and, if engaged in Federal or
federally assisted construction, to compile and maintain data on
employees and applicants for construction jobs. Although retention of
relevant records is implicit in the requirement to analyze selection
decision data, prepare an annual update, and provide supporting
documentation, the Executive Order regulations, with one exception, do
not expressly prescribe a record retention period. That exception is
the requirement under the UGESP to keep certain adverse impact data for
two years after the adverse impact has been eliminated.
Paragraph (a) of the proposal amends this obligation in several
ways: First it
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makes the record retention obligation applicable to any personnel or
employment record made or kept by the contractor, and sets out a
listing of examples of the types of records that must be retained. This
provision conforms to the analogous requirement under Title VII of the
Civil Rights Act of 1964. (Thus, contractors with 15 or more employees,
i.e., those that are covered by Title VII of the Civil Rights Act,
already are required to comply with this requirement. The only
contractors that will be newly covered by this requirement are those
that have Government contracts subject to the Executive Order's
regulations (e.g., those with contracts that exceed $10,000) and that
have fewer than 15 employees. This group of contractors consists almost
entirely of small construction contractors.)
Second, proposed paragraph (a) stipulates that the required record
retention period is two years. It is OFCCP's practice to review the
contractor's employment practices dating back two years prior to the
initiation of a compliance evaluation and to assess liability for
discriminatory practices dating back two years. Proposed paragraph (a)
requires smaller contractors (those that have fewer than 150 employees
or that do not have a Government contract of at least $150,000) to
retain records for a minimum of one year, rather than two years. Most
contractors are covered by the one year record retention period imposed
by Title VII. OFCCP is proposing a shorter record retention period for
smaller contractors as a method of reducing regulatory burden on such
contractors. This proposal is consistent with a provision included in
OFCCP's Section 503 final rule.
Third, proposed paragraph (a) requires that when a contractor has
been notified that a complaint has been filed, that a compliance
evaluation has been initiated or that an enforcement action has been
commenced, the contractor shall preserve all relevant personnel records
until the final disposition of the action. This provision conforms to
the corresponding record retention requirement under Title VII. The
purpose of this requirement is obvious--to ensure that OFCCP can obtain
all relevant documents during a compliance investigation or enforcement
action.
Proposed paragraph (b) provides that a contractor establishment
required to develop a written affirmative action program (AAP) shall
maintain its current AAP and its AAP for the preceding AAP year, along
with documentation of good faith efforts taken under the AAPs. Such
documentation might reflect, for example, the contractor's outreach and
recruitment efforts undertaken to increase its pool of female or
minority applicants, or training programs instituted to enhance the
skills and talents of incumbent employees to increase the pool of those
eligible for promotion. This provision is intended to ensure that the
AAPs are available to OFCCP during a compliance evaluation.
Proposed paragraph (c) provides that the failure to preserve the
records required by proposed paragraphs (a) and (b) constitutes
noncompliance with the Order. Additionally, proposed paragraph (c), in
a provision that is not paralleled in the current regulations, states
that where a contractor has destroyed or failed to preserve required
records, there may be a presumption that such records would have been
unfavorable to the contractor. However, this presumption will not apply
where a contractor demonstrates that the destruction or failure to
preserve records resulted from circumstances beyond the contractor's
control (e.g., fires, floods, tornados, or other natural disasters).
This provision is consistent with EEOC's practice under Title VII, as
set forth at Sec. 632.3(b)(2)(ii) of EEOC's Compliance Manual. The
intent of this provision is to deter contractors from deliberate
attempts to frustrate OFCCP's compliance monitoring and enforcement
efforts by destroying or failing to preserve records. The adverse
inference established by paragraph (c) would be used by OFCCP in both
investigations of compliance and in enforcement litigation.
Proposed paragraph (d), which is not paralleled in the current
regulations, would clarify that the contractor is obligated to preserve
only those records which are created or kept on or after the effective
date of the regulations.
The proposed regulation has been carefully drafted to comport with
requirements under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act (ADEA), the Americans with
Disabilities Act (ADA) and the requirement included in OFCCP's final
rule implementing Section 503 of the Rehabilitation Act of 1973, as
amended. The Title VII, ADEA, and ADA regulations contain record
retention requirements for similar records that vary from one to three
years. The vast majority of Federal contractors already are subject to
one or more of these statutes and thus already are required to maintain
the records described in this proposed regulation.
Section 60-1.20 Compliance Evaluations
The proposal would revise paragraphs (a) and (d) of this section,
which respectively address compliance reviews in general, and preaward
clearance requirements.
In the current regulations, paragraph (a) describes the purpose of
a compliance review of a contractor's implementation of its
nondiscrimination and affirmative action obligations, provides that the
review shall consist of a comprehensive analysis of all relevant
practices, and provides that recommendations for appropriate sanctions
shall be made. The proposal specifically authorizes OFCCP's use of
additional methods to evaluate a contractor's compliance with the
regulations. The proposal specifies that the compliance evaluation
methods available to OFCCP, other than the full compliance review, may
include a range of activities designed to focus, for example, on the
contractor's written affirmative action plan; the accuracy of data
submitted for review at desk audit; or on one component or
organizational unit of the contractor's workforce. Thus, the proposal
would allow OFCCP to streamline the review process in many cases.
The proposal also would revise paragraph (d), which currently
requires OFCCP to conduct a preaward compliance review of contractors
being considered for contracts of $1 million or more. The preaward
provision has been a component of OFCCP's regulatory procedures since
1968. The intent of the preaward clearance provision is to prevent the
award of large dollar contracts to contractors which are either in
noncompliance or unwilling to comply with the EEO clause of the
contract.
Specifically, Sec. 60-1.20(d) requires the awarding agency to
obtain clearance from OFCCP prior to awarding Federal supply/ service
contracts of $1 million or more. OFCCP must certify that a Federal
contractor/prospective contractor is in compliance before the award of
a contract.
The concept of preaward compliance reviews was premised on three
assumptions: (1) Contracts of a sizable dollar amount tend to generate
expanded hiring, promotion and upgrading opportunities; (2) the conduct
of a compliance review immediately prior to the award is the most
efficient way of ensuring that those employment opportunities be used
to address the consequences of any past job discrimination; and (3)
contractors tend to be more amenable to achieving
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compliance across-the-board when it is an immediate condition of the
contract. Although these assumptions generally are still correct, the
preaward review has not been a successful compliance mechanism for the
past 15 years.
OFCCP has been severely hampered in its efforts to plan and carry
out compliance reviews because of the regulatory and other requirements
associated with preaward requests. OFCCP recognized the shortcomings of
the preaward process as early as 1979 and attempted to modify the
provision in the 1980 final rule. The 1981 proposal would have
eliminated the requirements for preaward clearance. The ineffectiveness
of the preaward provision also was identified and cited in 1985 and
1988 reports of the Department of Labor Inspector General.
Several factors contribute to the difficulties with the preaward
process, including: insufficient staff and budget to process the large
volume of preaward requests--approximately 27,625 preaward requests
were received in FY '93; the short time available within which to
conduct preaward reviews; and court rulings that require a hearing
before OFCCP may declare a contractor ineligible for contracts. See
e.g., Illinois Tool Works v. Marshall, 601 F.2d 943 (7th Cir. 1979).
In addition, some contracting agencies have expressed concerns
about the traditional preaward process. OFCCP has held consultations
with various contracting agencies during the past year and has adopted
a number of administrative reforms as a result. Those reforms relate to
its interactions with the contracting agencies during the preaward
process, and they were implemented in order to ensure that the process
is as streamlined as possible. Those consultations are ongoing and
OFCCP will continue to work with the contracting agencies to improve
the process.
Based on the foregoing concerns with the current preaward
provision, OFCCP considered a number of options including the complete
elimination of the preaward provision, an increase in the dollar amount
of the preaward contract threshold, and the replacement of the preaward
review with a postaward review. OFCCP decided to promulgate this
proposal which modifies the provision by making the preaward compliance
review optional. Thus, preaward reviews will be conducted if OFCCP
determines that a review would constitute the best use of its limited
resources. OFCCP may consider factors such as whether the contract is
likely to generate significant employment opportunities, whether the
contractor has held a covered Federal contract before, whether the
contractor has been reviewed before and, if so, whether prior reviews
have revealed noncompliance at the same or other establishments, the
length of time that has passed since a prior review, and the EEO-1
profile of the contractor. It is difficult to describe more precisely
the factors OFCCP will use, because they may change over time as
economic conditions change. For example, in recent years the most
growth in employment opportunities has occurred in small businesses and
that growth has occurred in the service sector of the economy. Because
these facts may change in future years, they are not specified as
factors OFCCP will consider when deciding whether to conduct a preaward
review. By making the preaward review optional, the proposal allows
OFCCP the necessary flexibility and latitude in establishing the
agency's enforcement priorities, rather than continuing to allow those
priorities to be dictated by the incoming preaward requests. OFCCP
invites commenters to address whether it should make preaward reviews
optional, or should retain such reviews as mandatory.
This proposal provides, as does the current regulation, that OFCCP
will provide an awarding agency with its conclusions regarding
clearance for an award. However, the proposal requires that OFCCP
inform an awarding agency within 15 days of its intention to conduct a
preaward review. If OFCCP does not inform an awarding agency within
that period of its intention to conduct a preaward review, clearance
shall be presumed and the agency is authorized to proceed with the
award. If OFCCP informs an awarding agency of its intention to conduct
a preaward review, OFCCP shall be allowed an additional 20 days after
the date that it so informs the agency to provide its conclusions. If
OFCCP does not provide an awarding agency with its conclusions within
that period, clearance shall be presumed and the agency is authorized
to proceed with the award. This proposal ensures that the preaward
review process will not contribute to any unnecessary delay in the
procurement process.
This proposal continues the threshold for preaward notification at
$1 million. However, OFCCP invites commenters to address whether the
existing threshold should be changed or retained, in light of the dual
goals of streamlining the procurement process and ensuring that OFCCP
has the information necessary to allow it to evaluate the compliance
status of companies that may be awarded new Government contracts. In
addition, OFCCP invites commenters to address the option of moving from
preaward reviews to a system under which OFCCP reviews would be
performed concurrent with the awarding of a Federal contract.
Finally, as discussed under the heading of part 60-60 below, the
proposal moves provisions now contained in part 60-60 that relate to
confidentiality of data, timely submission of documents to OFCCP, and
nationwide AAP formats to this section.
Section 60-1.26 Enforcement Proceedings
The proposal revises and restructures for clarity Sec. 60-1.26,
which details Executive Order enforcement procedures. With the
exception of the provision relating to calculating interest, this
proposal is not intended to make substantive changes to this section.
Proposed subsection (a) contains general provisions applicable to both
administrative and judicial enforcement. Proposed subsection (b)
addresses administrative enforcement procedures, and proposed
subsections (c) and (d) cover judicial enforcement proceedings, which
are handled by the Department of Justice.
The proposal also makes several specific changes to this section
that are consistent with provisions included in OFCCP's Section 503
final rule at 41 CFR 60-741.65(a)(1). First, it clarifies in subsection
(a)(2) that OFCCP may seek relief for victims of discrimination
identified either during a compliance evaluation or a complaint
investigation whether or not such individuals have filed a complaint
with OFCCP. OFCCP has long maintained that such a limitation on
available relief clearly is inconsistent with the Order. OFCCP's
position recently was upheld in a case under Section 503, OFCCP v.
Commonwealth Aluminum, 82-OFC-6 (Assistant Secretary for Employment
Standards, February 10, 1994), Federal court review pending sub nom.
Commonwealth Aluminum Corporation v. United States (WD Ky., No. 94-
0071-O(C)).
Second, the proposal states, also in subsection (a)(2), that
interest on back pay shall be compounded quarterly at the percentage
rate established by the Internal Revenue Service for the underpayment
of taxes. This provision would reverse the ruling of the Department of
Labor's Assistant Secretary for Employment Standards in OFCCP v.
Washington Metropolitan Area Transit Authority, 84-OFC-8 (orders dated
August 23 and November 17, 1989), that simple interest, rather
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than compounded interest, should be used in the calculation of back pay
awards under Section 503. That Section 503 ruling, which relied upon
the Department's regulations (at 29 CFR part 20) implementing Section
11 of the Debt Collection Act of 1982 (31 U.S.C. 3717), could be
construed as applicable also to relief under the Executive Order. OFCCP
had a longstanding policy of requiring that interest on back pay awards
under the Executive Order be compounded; such policy is consistent with
the case law under Title VII of the Civil Rights Act of 1964. OFCCP
believes that it must reinstate this policy to ensure that victims of
discrimination obtain complete ``make whole'' relief.
Third, the proposal provides in subsection (b)(1) that
administrative enforcement proceedings also may be instituted where
OFCCP determines that referral for formal enforcement (rather than
settlement) is appropriate. Fourth, the proposal specifies in
subsection (b)(1) that the administrative enforcement referral will be
made to the Solicitor of Labor.
The proposal states that the rules of evidence set out in the
hearing rules applicable to the Department's Administrative Law Judges
shall also apply to hearings conducted under 41 CFR part 60-30. These
rules, which were issued in 1990, are generally applicable to the
Department's formal adversarial adjudications. Consistent with a
requirement included in OFCCP's Section 503 final rule, the proposal
also requires that the Department's Final Administrative Order in an
Executive Order case be issued within one year from the date of the
Administrative Law Judge's recommended decision, or the submission of
the parties' exceptions and responses to exceptions to such decision
(if any), whichever is later. OFCCP believes that this time limit is
needed to ensure that aggrieved individuals obtain expeditious relief
and that contractors are assured of closure of the administrative
proceedings.
Section 60-1.27 Sanctions
The current sanction regulation provides only that the sanctions
authorized by section 209 of the Executive Order may be exercised by or
with the approval of the Director of OFCCP. The 1980 final rule and the
1981 proposal deleted the current sanction regulation as a separate
provision, and they both generally merged the sanction regulation with
the regulation pertaining to enforcement proceedings. The regulation
pertaining to enforcement proceedings currently is set forth at
Sec. 60-1.26. In the 1980 final rule the combined sanctions and
enforcement proceedings regulation appeared at Sec. 60-1.29, and in the
1981 proposal the combined regulation appeared at Sec. 60-1.68.
The proposal adds a new paragraph specifically addressing the
sanction of debarment. Paragraph (b) of the proposal provides for a
fixed term debarment for a period of six months or more, as well as
indefinite term debarment. The Secretary already has ordered the
imposition of a fixed term debarment in OFCCP v. Disposable Safety
Wear, 92-OFC-11 (Decision and Final Administrative Order of the
Secretary of Labor, September 29, 1992). See also OFCCP v. Blaine
Construction Co., 94-OFC-4 (Decision and Final Administrative Order of
the ALJ, March 9, 1994); OFCCP v. KRT Drywall/Acoustical, 94-OFC-14
(Order of the ALJ, August 18, 1994); OFCCP v. State Construction of
Southeast Wisconsin, 94-0FC-18 (Orders of the ALJ, August 31 and
September 8, 1994). The proposal simply provides contractors with
greater notice that a fixed term debarment of six months or more may be
imposed in some cases instead of an indefinite term debarment. OFCCP
believes that the use of fixed period debarments will serve as a more
effective deterrent and encourage compliance among the recalcitrant
contractors who repeatedly break their promises of future compliance
with respect to affirmative action and recordkeeping and retention
requirements. OFCCP has found that the current practice of reinstating
the contractor upon its simple demonstration of compliance is
insufficient to ensure voluntary compliance. Under the current
procedure the contractor may be reinstated immediately without
incurring any economic loss for a violation of an affirmative action
requirement (e.g., a contractor which has failed to develop an AAP can
simply do so to be eligible for reinstatement). A fixed term debarment
establishes a trial period during which a contractor can demonstrate
its commitment and ability to establish personnel practices that will
ensure continued compliance with the requirements of the Executive
Order. Thus, in a Final Administrative Order, the Adminstrative Review
Board could order a company to take specific action to come into
compliance and to submit periodic reports to OFCCP regarding its
compliance status during the fixed term debarment period. A fixed term
debarment scheme will strengthen the Executive Order program by
deterring contractors from engaging in violations based upon ``a cold
weighing of the costs and benefits of noncompliance.'' Janik Paving &
Construction v. Brock, 828 F.2d 84 (2d Cir. 1987). Where fixed term
debarment is ordered, in lieu of an indefinite term debarment, the
length of the debarment period will be determined on a case-by-case
basis, depending upon factors such as the nature and severity of the
violations. A contractor debarred for a fixed term will not be
automatically reinstated upon the conclusion of the fixed term
debarment period. In making his or her determination as to whether
reinstatement of such a contractor is appropriate, the Deputy Assistant
Secretary shall consider whether the contractor has demonstrated that
it has established and will carry out employment policies and practices
in compliance with the Executive Order. If the contractor failed to
comply with the Department's Final Administrative Order, it would not
be eligible for reinstatement at the conclusion of the fixed term
debarment period.
Section 60-1.30 Notification of Agencies
Consistent with a regulation in OFCCP's Section 503 final rule, the
proposal would delete the requirement that OFCCP distribute a list of
debarred contractors to all executive departments and agencies, and
substitute a requirement that the Deputy Assistant Secretary ensure
that the heads of agencies are notified of debarments. Accordingly, the
section would be renamed ``Notification of agencies'' instead of
``Contract ineligibility list.'' The General Services Administration
now publishes a listing of debarred contractors, and it would be
redundant for OFCCP to issue a separate list.
The 1980 final rule would have required that OFCCP promptly notify
the Comptroller General of the United States regarding contract
cancellations and debarments. Further, that section of the final rule
would have required that OFCCP take appropriate steps to notify prime
contractors of the debarred contractor's ineligibility for
subcontracts. Notice now is provided adequately by the General Services
Administration's list of debarred contractors.
Section 60-1.31 Reinstatement of Ineligible Prime Contractors and
Subcontractors
The proposal would revise this section to make it consistent with
proposed Sec. 60-1.27(b), which authorizes debarment either for an
indefinite
[[Page 25521]]
period or for a fixed period of not less than six months. Accordingly,
the proposal provides that a contractor debarred for an indefinite
period may request reinstatement at any time, and that a contractor
debarred for a fixed period may request reinstatement after the
expiration of the fixed period. In either type of debarment, the
contractor, as under the current regulations, would be required to show
that it has established and will carry out employment practices in
compliance with the Executive Order.
Further, the proposal would adopt some of the 1980 final rule's
reinstatement procedures. For instance, similar to the 1980 final rule,
the proposal specifies that the contractor may be subject to a
compliance evaluation before a final determination is made on the
reinstatement request. The 1980 final rule would have established some
additional detailed procedures that OFCCP, upon reconsideration, does
not believe need to be incorporated into the regulations.
Section 60-1.32 Intimidation and Interference
Currently, the regulations provide that the sanctions and penalties
contained therein may be exercised against any contractor which fails
to ensure that no person intimidates, threatens, coerces or
discriminates against any individual because he or she files a
complaint or otherwise participates in compliance activity under the
Executive Order or a similar Federal, state or local law. The proposal
contains a similar prohibition but specifies that the contractor itself
shall not engage in such activities and shall ensure that all persons
under its control do not do so, and adds that the prohibition applies
to harassment. Further, the proposal states that the prohibition
applies to an individual's opposition to any practice that is unlawful
under the Order or similar Federal, state or local laws, and to the
exercise of any other right protected by the Order. The proposal is
consistent with a provision included in OFCCP's Section 503 final rule,
and it is substantially similar to the counterpart provision in the
1980 final rule (Sec. 60-1.28). The intent of the proposal is to
incorporate strengthened provisions that ensure that individuals fully
enjoy all rights protected under the Order, the regulations and
comparable Federal, state and local laws without the threat of
harassment or intimidation.
Section 60-1.34 Violation of a Conciliation Agreement or Letter of
Commitment
The proposal contains a clarification that in enforcement
proceedings related to violation of a conciliation agreement, OFCCP is
not required to present proof of the underlying violations resolved by
the agreement. This provision, which reflects OFCCP's current practice
and which is consistent with OFCCP's Section 503 final rule, is to
remove any doubt that OFCCP need not litigate claims that have already
been resolved through the agreement.
Section 60-1.42 Notices to be Posted
Technical corrections are made to the wording of the poster
regarding the jurisdictional coverage of Title VII and the address of
EEOC.
Section 60-1.43 Access to Records and Site of Employment
Consistent with a provision included in OFCCP's Section 503 final
rule, the proposal specifies that computerized records are among the
records to which the contractor shall permit OFCCP access for
inspection and copying. In addition, the proposal specifies that
contractors must permit OFCCP access to their premises for the purpose
of conducting compliance evaluations and complaint investigations (the
current regulation mentions only compliance reviews). Further, the
proposal revises the list of uses which can be made of information
OFCCP obtains from a contractor, to include the administration of other
laws that are enforced, in whole or in part, by OFCCP.
Part 60-60--Contractor Evaluation Procedures for Contractors for
Supplies and Services
Part 60-60 is to be deleted. Most of part 60-60 is properly
characterized as internal operating procedures. A number of the
procedures have been incorporated into OFCCP's Federal Contract
Compliance Manual, and the provisions regarding confidentiality of data
furnished to OFCCP by contractors are proposed to be incorporated into
part 60-1. Specifically, provisions currently found at Secs. 60-
60.2(a), 60-60.3(a)(3), 60-60.3(d) and 60-60.4(a-d) will be
incorporated into Sec. 60-1.20 with minor changes. The 1980 final rule,
and the 1981 proposal, would have made similar revisions to part 60-60.
Regulatory Procedures
Executive Order 12866
The Department is issuing this proposed rule in conformance with
Executive Order 12866. This proposal has been determined to be
significant for purposes of Executive Order 12866 and therefore has
been reviewed by OMB. This proposal does not meet the criteria of
Section 3(f)(1) of Executive Order 12866 and therefore the information
enumerated in Section 6(a)(3)(C) of that Order is not required.
In accordance with section 6 of Executive Order 12866, an
assessment of the potential costs and benefits of the proposal has been
made. Potential costs and benefits of record retention and
certification proposals are discussed below in the sections on the
Regulatory Flexibility Act and the Paperwork Reduction Act. As noted
therein, this proposal would significantly reduce the compliance burden
on the contractor community by eliminating the segregated facilities
certification requirement. OFCCP anticipates publishing an additional
proposal relating to 41 CFR part 60-2 and the requirements of written
affirmative action programs that would, if adopted, further reduce the
burdens on contractors. OFCCP's goal in proposing regulatory changes is
to streamline its existing regulations and to reinvent its current
processes in order make both contractor compliance and agency
enforcement more efficient and cost effective. Therefore, OFCCP invites
comments on additional ways to reduce compliance burdens such as
simplified compliance procedures for small contractors.
Regulatory Flexibility Act
The proposed rule, if promulgated, will not have a significant
economic impact on a substantial number of small business entities. A
requirement that records be maintained for one to two years (depending
upon contractor size) might result in a slight additional storage
burden for some small entities; conversely, small entities and other
contractors would benefit from the elimination of the segregated
facilities certification. Therefore, a regulatory flexibility analysis
under the Regulatory Flexibility Act is not required.
Paperwork Reduction Act
The proposed rule would slightly revise information collection
requirements currently approved by OMB under the Paperwork Reduction
Act (44 U.S.C. 3501, et seq.).
As previously stated, withdrawing the certification requirement
will significantly reduce compliance burdens on contractors. The
Government lets approximately 350,000 prime contracts each year. If it
is assumed that each prime contract results in an average of four
[[Page 25522]]
subcontracts, and that it takes about one-half hour to prepare and
submit the written certification, eliminating the certification
requirement would reduce compliance burdens on the contractor community
by roughly 875,000 hours. This estimate may significantly understate
the savings; many contractors annually solicit the certification from
all of their prospective vendors rather than limiting their request to
those firms that actually are subcontractors on Federal projects.
Although for contractors with 150 or more employees and a contract
of $150,000 or more this proposal extends to two years the current
obligations such contractors already have under Title VII and the ADA
to retain records for one year, there will be only a minimal increase
in burden imposed on contractors as a result of this change. A similar
conclusion was reached by EEOC in 1991 when it doubled its existing
six-month retention period under Title VII to one year--an obligation
that applies to a significantly larger universe of employers than does
the obligation under the Executive Order. See 56 FR 35753 (July 26,
1991). Employers, especially larger ones, are increasingly maintaining
electronic records. Where this is the case, compliance with the
requirement will impose little or no additional burden. In many cases,
additional storage space would be needed only for applications of
persons not hired (which generally are not cost effective to record and
store electronically).
In addition, the proposal makes this retention obligation
applicable to a broader range of records than was previously required
by the Executive Order regulations. However, this proposal would
conform the obligation to the analogous requirement under EEOC's
regulations (29 CFR 1602.14) issued pursuant to Title VII and the ADA.
OFCCP solicits comments concerning the proposed revisions to the
collections of information contained in this proposed rule. OFCCP
solicits comments to: (i) Evaluate whether the proposed collection of
information is necessary for the proper performance of the functions of
the agency, including whether the information will have practical
utility; (ii) evaluate the accuracy of the agency's estimate of the
burden of the proposed collection of information, including the
validity of the methodology and assumptions used; (iii) enhance the
quality, utility, and clarity of the information to be collected; and
(iv) minimize the burden of the collection of information on those who
are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology, e.g., permitting electronic
submission of responses.
The revised collections of information contained in this proposed
rule have been submitted to OMB for review under section 3507(d) of the
Paperwork Reduction Act of 1995. Written comments on these proposed
information collection revisions may also be sent to the Office of
Information and Regulatory Affairs, Office of Management and Budget,
Attention: Desk Officer for Employment Standards, Washington, D.C.
20503.
Unfunded Mandates Reform Act
The proposed rule, if promulgated, will not include any Federal
mandate that may result in the expenditure by state, local and tribal
governments in the aggregate, or by the private sector, of $100,000,000
or more in any one year.
List of Subjects
41 CFR Part 60-1
Administrative practice and procedure, Civil rights, Employment,
Equal employment opportunity, Government contracts, Government
procurement, Investigations, Reporting and recordkeeping requirements.
41 CFR Part 60-60
Equal employment opportunity, Government procurement, Reporting and
recordkeeping requirements.
Signed at Washington, D.C., this 10th day of May, 1996.
Robert B. Reich,
Secretary of Labor.
Bernard E. Anderson,
Assistant Secretary for Employment Standards.
Shirley J. Wilcher,
Deputy Assistant Secretary for Federal Contract Compliance.
Accordingly, part 60-1 of the rule amending 41 CFR chapter 60
published on December 30, 1980 (45 FR 86216), which was delayed
indefinitely at 46 FR 42865, is proposed to be withdrawn; the proposed
rule published on August 25, 1981 (46 FR 42968; supplemented at 47 FR
17770, April 23, 1982) is hereby withdrawn in its entirety; and under
the authority of Executive Order 11246, as amended, Title 41 of the
Code of Federal Regulations, chapter 60, is proposed to be amended as
follows:
60-1--[AMENDED]
The authority citation for part 60-1 continues to read as follows:
Authority: Sec. 201, E.O. 11246 (30 FR 12319), as amended by
E.O. 12086.
2. Section 60-1.3 is amended by removing the definitions of
Director and Rules, regulations, and relevant orders of the Secretary
of Labor, by revising the definitions of Contract, Government contract,
Subcontract and United States, and by adding, in alphabetical order,
the definitions of Compliance evaluation and Deputy Assistant Secretary
to read as follows:
Sec. 60-1.3 Definitions.
* * * * *
Compliance evaluation means any one or combination of actions OFCCP
may take to examine a Federal contractor or subcontractor's compliance
with one or more of the Executive Order 11246 requirements.
* * * * *
Contract means any Government contract or subcontract or any
federally assisted construction contract or subcontract.
* * * * *
Deputy Assistant Secretary means the Deputy Assistant Secretary for
Federal Contract Compliance Programs, United States Department of
Labor, or his or her designee.
* * * * *
Government contract means any agreement or modification thereof
between any contracting agency and any person for the purchase, sale or
use of personal property or nonpersonal services. The term ``personal
property,'' as used in this section, includes supplies, and contracts
for the use of real property (such as lease arrangements), unless the
contract for the use of real property itself constitutes real property
(such as easements). The term ``nonpersonal services'' as used in this
section includes, but is not limited to, the following services:
Utilities, construction, transportation, research, insurance, and fund
depository. The term Government contract does not include:
(1) Agreements in which the parties stand in the relationship of
employer and employee; and
(2) Federally assisted construction contracts.
* * * * *
Subcontract means any agreement or arrangement between a contractor
and any person (in which the parties do not stand in the relationship
of an employer and an employee):
(1) For the purchase, sale or use of personal property or
nonpersonal services which, in whole or in part, is necessary to the
performance of any one or more contracts; or
[[Page 25523]]
(2) Under which any portion of the contractor's obligation under
any one of more contracts is performed, undertaken or assumed.
* * * * *
United States, as used herein, shall include the several States,
the District of Columbia, the Virgin Islands, the Commonwealth of
Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern
Mariana Islands, and Wake Island.
3. Section 60-1.8 is revised to read as follows:
Sec. 60-1.8 Segregated facilities.
To comply with its obligations under the Order, a contractor must
ensure that facilities provided for employees are provided in such a
manner that segregation on the basis of race, color, religion, sex or
national origin cannot result. The contractor may neither require such
segregated use by written or oral policies nor tolerate such use by
employee custom. The contractor's obligation extends further to
ensuring that its employees are not assigned to perform their services
at any location, under the contractor's control, where the facilities
are segregated. This obligation extends to all contracts containing the
equal opportunity clause regardless of the amount of the contract. The
term ``facilities,'' as used in this section, means waiting rooms, work
areas, restaurants and other eating areas, time clocks, restrooms, wash
rooms, locker rooms, and other storage or dressing areas, parking lots,
drinking fountains, recreation or entertainment areas, transportation,
and housing provided for employees: Provided, That separate or single-
user restrooms and necessary dressing or sleeping areas shall be
provided to assure privacy between the sexes.
4. A new Sec. 60-1.12 is added to subpart A to read as follows:
Sec. 60-1.12 Record retention.
(a) General requirements. Any personnel or employment record made
or kept by the contractor shall be preserved by the contractor for a
period of not less than two years from the date of the making of the
record or the personnel action involved, whichever occurs later.
However, if the contractor has fewer than 150 employees or does not
have a Government contract of at least $150,000, the minimum record
retention period shall be one year from the date of the making of the
record or the personnel action involved, whichever occurs later. Such
records include, but are not necessarily limited to, records pertaining
to hiring, assignment, promotion, demotion, transfer, lay-off or
termination, rates of pay or other terms of compensation, and selection
for training or apprenticeship, and other records having to do with
requests for reasonable accommodation, the results of any physical
examination, job advertisements and postings, applications and resumes,
tests and test results, and interview notes. In the case of involuntary
termination of an employee, the personnel records of the individual
terminated shall be kept for a period of not less than two years from
the date of the termination, except that contractors that have fewer
than 150 employees or that do not have a Government contract of at
least $150,000 shall keep such records for a period of not less than
one year from the date of the termination. Where the contractor has
received notice that a complaint of discrimination has been filed, that
a compliance evaluation has been initiated, or that an enforcement
action has been commenced, the contractor shall preserve all personnel
records relevant to the complaint, compliance evaluation or enforcement
action until final disposition of the complaint, compliance evaluation
or enforcement action. The term ``personnel records relevant to the
complaint,'' for example, would include personnel or employment records
relating to the complainant and to all other employees holding
positions similar to that held or sought by the complainant and
application forms or test papers submitted by unsuccessful applicant
and by all other candidates for the same position as that for which the
complainant unsuccessfully applied. Where a compliance evaluation has
been initiated, all personnel and employment records described above
are relevant until OFCCP makes a final disposition of the evaluation.
(b) Affirmative action programs. A contractor establishment
required under Sec. 60-1.40 to develop a written affirmative action
program (AAP) shall maintain its current AAP and documentation of good
faith effort, and shall preserve its AAP and documentation of good
faith effort for the immediately preceding AAP year, unless it was not
then covered by the written AAP requirement.
(c) Failure to preserve records. Failure to preserve complete and
accurate records as required by paragraphs (a) and (b) of this section
constitutes noncompliance with the contractor's obligations under the
Executive Order and this part. Where the contractor has destroyed or
failed to preserve records as required by this section, there may be a
presumption that the information destroyed or not preserved would have
been unfavorable to the contractor: Provided, That this presumption
shall not apply where the contractor shows that the destruction or
failure to preserve records results from circumstances that are outside
of the contractor's control.
(d) The requirements of this section shall apply only to records
made or kept on or after [30 days after date of publication of final
rule].
5. In Sec. 60-1.20, the section heading and paragraphs (a) and (d)
are revised and paragraphs (e), (f) and (g) are added to read as
follows:
Sec. 60-1.20 Compliance evaluations.
(a) OFCCP may conduct compliance evaluations to determine if the
prime contractor or subcontractor maintains nondiscriminatory hiring
and employment practices and is taking affirmative action to ensure
that applicants are employed and that employees are placed, trained,
upgraded, promoted, and otherwise treated during employment without
regard to race, color, religion, sex, or national origin. A compliance
evaluation may consist of any one of the following or any combination
thereof:
(1) A compliance review, which consists of comprehensive analysis
and evaluation of each aspect of the aforementioned practices,
policies, and conditions resulting therefrom;
(2) An off-site review of records, which could consist of a full
desk audit, a review of the contractor's affirmative action plan or
parts thereof, or a review of particular records such as personnel
activity data;
(3) A compliance check, where OFCCP ascertains whether or not the
contractor has maintained records consistent with Sec. 60-1.12 and/or
has developed an AAP consistent with Sec. 60-1.40; or
(4) A focused review, where OFCCP restricts its on-site review to
one or more components of the contractor's organization or one or more
aspects of the contractor's employment practices.
* * * * *
(d) Preaward compliance evaluations. Each agency shall include in
the invitation for bids for each formally advertised nonconstruction
contract or state at the outset of negotiations for each negotiated
contract, that if the award, when let, should exceed the amount of $1
million or more, the prospective contractor and its known first-tier
subcontractors with subcontracts of $1 million or more may be subject
to a compliance evaluation before the award of the contract. The
awarding agency will notify OFCCP and request appropriate action and
findings
[[Page 25524]]
in accordance with this subsection. Within 15 days of the notice OFCCP
will inform the awarding agency of its intention to conduct a preaward
review. If OFCCP does not inform the awarding agency within that period
of its intention to conduct a preaward review, clearance shall be
presumed and the awarding agency is authorized to proceed with the
award. If OFCCP informs the awarding agency of its intention to conduct
a preaward review, OFCCP shall be allowed an additional 20 days after
the date that it so informs the awarding agency to provide its
conclusions. If OFCCP does not provide the awarding agency with its
conclusions within that period, clearance shall be presumed and the
awarding agency is authorized to proceed with the award.
(e) Each prime contractor or subcontractor with 50 or more
employees and a contract of $50,000 or more is required to develop a
written affirmative action program for each of its establishments
(Sec. 60-1.40). If a contractor fails to submit an affirmative action
program and supporting documents, including the workforce analysis,
within 15 days of a request, the enforcement procedures specified in
Sec. 60-1.26(b) shall be applicable. Contractors may reach agreement
with OFCCP on nationwide AAP formats or on frequency of updating
statistics.
(f) Confidentiality and relevancy of information. If the contractor
is concerned with the confidentiality of such information as lists of
employee names, reasons for termination, or pay data, then alphabetic
or numeric coding or the use of an index of pay and pay ranges,
consistent with the ranges assigned to each job group, are acceptable
for desk audit purposes. The contractor must provide full access to all
relevant data on-site as required by Sec. 60-1.43. Where necessary, the
compliance officer may take information made available during the on-
site evaluation off-site for further analysis. An off-site analysis
should be conducted where issues have arisen concerning deficiencies or
an apparent violation which, in the judgment of the compliance officer,
should be more thoroughly analyzed off-site before a determination of
compliance is made. The contractor must provide all data determined by
the compliance officer to be necessary for off-site analysis. Such data
may only be coded if the contractor makes the code available to the
compliance officer. If the contractor believes that particular
information which is to be taken off-site is not relevant to compliance
with the Executive Order, the contractor may request a ruling by the
OFCCP District/Area Director. The OFCCP District/Area Director shall
issue a ruling promptly. The contractor may appeal that ruling to the
OFCCP Regional Director within 10 days of receipt. The Regional
Director shall issue a final ruling promptly. Pending a final ruling,
such information may not be copied by OFCCP and access to the
information shall be limited to the compliance officer and personnel
involved in the determination of relevancy. Data determined to be not
relevant to the investigation will be returned to the contractor
immediately.
(g) Public access to information. The disclosure of information
obtained from a contractor will be evaluated pursuant to the public
inspection and copying provisions of the Freedom of Information Act, 5
U.S.C. 552, and the Department of Labor's implementing regulations at
29 CFR part 70.
6. Section 60-1.26 is revised to read as follows:
Sec. 60-1.26 Enforcement proceedings.
(a) General. (1) Violations of the Order, the equal opportunity
clause, the regulations in this chapter, or applicable construction
industry equal employment opportunity requirements, may result in the
institution of administrative or judicial enforcement proceedings.
Violations may be found based upon, inter alia, any of the following:
(i) The results of a complaint investigation;
(ii) The results of a compliance review;
(iii) The results of a compliance evaluation;
(iv) Analysis of an affirmative action program;
(v) The results of an on-site review of the contractor's compliance
with the Order and its implementing regulations;
(vi) A contractor's refusal to submit an affirmative action
program;
(vii) A contractor's refusal to allow an on-site compliance
evaluation to be conducted;
(viii) A contractor's refusal to establish, maintain and supply
records or other information as required by the regulations in this
chapter or applicable construction industry requirements;
(ix) A contractor's alteration or falsification of records and
information required to be maintained by the regulations in this
chapter; or
(x) Any substantial or material violation or the threat of a
substantial or material violation of the contractual provisions of the
Order, or of the rules or regulations in this chapter.
(2) OFCCP may seek back pay and other make whole relief for victims
of discrimination identified during a complaint investigation or
compliance evaluation. Such individuals need not have filed a complaint
as a prerequisite to OFCCP seeking such relief on their behalf.
Interest on back pay shall be calculated from the date of the loss and
compounded quarterly at the percentage rate established by the Internal
Revenue Service for the underpayment of taxes.
(b) Administrative enforcement. (1) OFCCP may refer matters to the
Solicitor of Labor with a recommendation for the institution of
administrative enforcement proceedings, which may be brought to enjoin
violations, to seek appropriate relief, and to impose appropriate
sanctions. The referral may be made when violations have not been
corrected in accordance with the conciliation procedures in this
chapter, or when OFCCP determines that referral for consideration of
formal enforcement (rather than settlement) is appropriate. However, if
a contractor refuses to submit an affirmative action program, or
refuses to supply records or other requested information, or refuses to
allow OFCCP access to its premises for an on-site review, and if
conciliation efforts under this chapter are unsuccessful, OFCCP may
immediately refer the matter to the Solicitor, notwithstanding other
requirements of this chapter.
(2) Administrative enforcement proceedings shall be conducted under
the control and supervision of the Solicitor of Labor and under the
Rules of Practice for Administrative Proceedings to Enforce Equal
Opportunity under Executive Order 11246 contained in part 60-30 of this
chapter and the Rules of Evidence set out in the Rules of Practice and
Procedure for Administrative Hearings Before the Office of
Administrative Law Judges contained in 29 CFR part 18, subpart B:
Provided, That a Final Administrative Order shall be issued within one
year from the date of the issuance of the recommended findings,
conclusions and decision of the Administrative Law Judge, or the
submission of any exceptions and responses to exceptions to such
decision (if any), whichever is later.
(c) Referrals to the Department of Justice. (1) The Deputy
Assistant Secretary may refer matters to the Department of Justice with
a recommendation for the institution of judicial enforcement
proceedings. There are no procedural prerequisites to a referral to the
Department of Justice. Such referrals may be accomplished without
proceeding through the conciliation procedures in this chapter,
[[Page 25525]]
and a referral may be made at any stage in the procedures under this
chapter.
(2) Whenever a matter has been referred to the Department of
Justice for consideration of judicial enforcement, the Attorney General
may bring a civil action in the appropriate district court of the
United States requesting a temporary restraining order, preliminary or
permanent injunction (including relief against noncontractors,
including labor unions, who seek to thwart the implementation of the
Order and regulations), and an order for such additional sanctions or
relief, including back pay, deemed necessary or appropriate to ensure
the full enjoyment of the rights secured by the Order, or any of the
above in this paragraph (c)(2).
(3) The Attorney General is authorized to conduct such
investigation of the facts as he/she may deem necessary or appropriate
to carry out his/her responsibilities under the regulations in this
chapter.
(4) Prior to the institution of any judicial proceedings, the
Attorney General, on behalf of the Deputy Assistant Secretary, is
authorized to make reasonable efforts to secure compliance with the
contract provisions of the Order. The Attorney General may do so by
providing the contractor and any other respondent with reasonable
notice of his/her findings, his/her intent to file suit, and the
actions he/she believes necessary to obtain compliance with the
contract provisions of the Order without contested litigation, and by
offering the contractor and any other respondent a reasonable
opportunity for conference and conciliation, in an effort to obtain
such compliance without contested litigation.
(5) As used in the regulations in this part, the Attorney General
shall mean the Attorney General, the Assistant Attorney General for
Civil Rights, or any other person authorized by regulations or practice
to act for the Attorney General with respect to the enforcement of
equal employment opportunity laws, orders and regulations generally, or
in a particular matter or case.
(6) The Deputy Assistant Secretary or his/her designee, and
representatives of the Attorney General may consult from time to time
to determine what investigations should be conducted to determine
whether contractors or groups of contractors or other persons may be
engaged in patterns or practices in violation of the Executive Order or
these regulations, or of resistance to or interference with the full
enjoyment of any of the rights secured by them, warranting judicial
proceedings.
(d) Initiation of lawsuits by the Attorney General without referral
from the Deputy Assistant Secretary. In addition to initiating lawsuits
upon referral under this section, the Attorney General may, subject to
approval by the Deputy Assistant Secretary, initiate independent
investigations of contractors which he/she has reason to believe may be
in violation of the Order or the rules and regulations issued pursuant
thereto. If, upon completion of such an investigation, the Attorney
General determines that the contractor has in fact violated the Order
or the rules and regulations issued thereunder, he/she shall make
reasonable efforts to secure compliance with the contract provisions of
the Order. He/she may do so by providing the contractor and any other
respondent with reasonable notice of the Department of Justice's
findings, its intent to file suit, and the actions that the Attorney
General believes are necessary to obtain compliance with the contract
provisions of the Order without contested litigation, and by offering
the contractor and any other respondent a reasonable opportunity for
conference and conciliation in an effort to obtain such compliance
without contested litigation. If these efforts are unsuccessful, the
Attorney General may, upon approval by the Deputy Assistant Secretary,
bring a civil action in the appropriate district court of the United
States requesting a temporary restraining order, preliminary or
permanent injunction, and an order for such additional sanctions or
equitable relief, including back pay, deemed necessary or appropriate
to ensure the full enjoyment of the rights secured by the Order or any
of the above in this paragraph (d).
(e) To the extent applicable, this section and part 60-30 of this
chapter shall govern proceedings resulting from any Deputy Assistant
Secretary's determinations under Sec. 60-2.2(b) of this chapter.
7. Section 60-1.27 is revised to read as follows:
Sec. 60-1.27 Sanctions.
(a) General. The sanctions described in subsections (1), (5), and
(6) of Section 209(a) of the Order may be exercised only by or with the
approval of the Deputy Assistant Secretary. Referral of any matter
arising under the Order to the Department of Justice or to the Equal
Employment Opportunity Commission shall be made by the Deputy Assistant
Secretary.
(b) Debarment. A contractor may be debarred from receiving future
contracts or modifications or extensions of existing contracts, subject
to reinstatement pursuant to Sec. 60-1.31, for any violation of
Executive Order 11246 or the implementing rules, regulations and orders
of the Secretary of Labor. Debarment may be imposed for an indefinite
term or for a fixed minimum period of at least six months.
8. Section 60-1.30 is revised to read as follows:
Sec. 60-1.30 Notification of agencies.
The Deputy Assistant Secretary shall ensure that the heads of all
agencies are notified of any debarments taken against any contractor.
9. Section 60-1.31 is revised to read as follows:
Sec. 60-1.31 Reinstatement of ineligible prime contractors and
subcontractors.
A prime contractor or subcontractor debarred from further contracts
for an indefinite period under the Order may request reinstatement in a
letter filed with the Deputy Assistant Secretary at any time after the
effective date of the debarment; a prime contractor or subcontractor
debarred for a fixed period may make such a request upon the expiration
of the fixed debarment period. In connection with the reinstatement
proceedings, all debarred contractors shall be required to show that
they have established and will carry out employment policies and
practices in compliance with the Order and implementing regulations.
Before reaching a decision, the Deputy Assistant Secretary may conduct
a compliance evaluation of the contractor and may require the
contractor to supply additional information regarding the request for
reinstatement. The Deputy Assistant Secretary shall issue a written
decision on the request.
10. Section 60-1.32 is revised to read as follows:
Sec. 60-1.32 Intimidation and interference.
(a) The contractor, subcontractor or applicant shall not harass,
intimidate, threaten, coerce, or discriminate against any individual
because the individual has engaged in or may engage in any of the
following activities:
(1) Filing a complaint;
(2) Assisting or participating in any manner in an investigation,
compliance evaluation, hearing, or any other activity related to the
administration of the Order or any other Federal, state or local law
requiring equal opportunity;
(3) Opposing any act or practice made unlawful by the Order or any
other Federal, state or local law requiring equal opportunity; or
(4) Exercising any other right protected by the Order.
(b) The contractor, subcontractor or applicant shall ensure that
all persons under its control do not engage in such
[[Page 25526]]
harassment, intimidation, threats, coercion or discrimination. The
sanctions and penalties contained in this part may be exercised by
OFCCP against any contractor, subcontractor or applicant who violates
this obligation.
11. In Sec. 60-1.34, paragraph (a)(4) is added to read as follows:
Sec. 60-1.34 Violation of a conciliation agreement or letter of
commitment.
(a) * * *
(4) In any proceeding involving an alleged violation of a
conciliation agreement OFCCP may seek enforcement of the agreement
itself and shall not be required to present proof of the underlying
violations resolved by the agreement.
* * * * *
12. Section 60-1.42 is amended by revising paragraph (a) to read as
follows:
Sec. 60-1.42 Notices to be posted.
(a) Unless alternative notices are prescribed by the Deputy
Assistant Secretary, the notices which prime contractors and
subcontractors are required to post by paragraphs (1) and (3) of the
equal opportunity clause in Sec. 60-1.4 will contain the following
language and be provided by the contracting or administering agencies:
EQUAL EMPLOYMENT OPPORTUNITY IS THE LAW--DISCRIMINATION IS PROHIBITED
BY THE CIVIL RIGHTS ACT OF 1964 AND BY EXECUTIVE ORDER No. 11246
Title VII of the Civil Rights Act of 1964-Administered by:
THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
Prohibits discrimination because of Race, Color, Religion, Sex,
or National Origin by Employers with 15 or more employees, by Labor
Organizations, by Employment Agencies, and by Apprenticeship or
Training Programs.
ANY PERSON
Who believes he or she has been discriminated against
SHOULD CONTACT
THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
1801 L Street N.W., Washington, D.C. 20507
Executive Order No. 11246-Administered by:
THE OFFICE OF FEDERAL CONTRACT COMPLIANCE PROGRAMS
Prohibits discrimination because of Race, Color, Religion, Sex,
or National Origin, and requires affirmative action to ensure
equality of opportunity in all aspects of employment.
By all Federal Government Contractors and Subcontractors, and by
Contractors Performing Work Under a Federally Assisted Construction
Contract, regardless of the number of employees in either case.
ANY PERSON
Who believes he or she has been discriminated against
SHOULD CONTACT
THE OFFICE OF FEDERAL CONTRACT COMPLIANCE PROGRAMS
U.S. Department of Labor, Washington, D.C. 20210
* * * * *
13. Section 60-1.43 is revised to read as follows:
Sec. 60-1.43 Access to records and site of employment.
Each prime contractor and subcontractor shall permit access during
normal business hours to its premises for the purpose of conducting on-
site compliance evaluations and complaint investigations. Each
contractor shall permit the inspecting and copying of such books and
accounts and records, including computerized records, and other
material as may be relevant to the matter under investigation and
pertinent to compliance with the Order, and the rules and regulations
promulgated pursuant thereto by the agency, or the Deputy Assistant
Secretary. Information obtained in this manner shall be used only in
connection with the administration of the Order, the Civil Rights Act
of 1964 (as amended), and any other law that is or may be enforced in
whole or in part by OFCCP.
PART 60-60--[REMOVED]
14. Part 60-60 is removed.
[FR Doc. 96-12687 Filed 5-20-96; 8:45 am]
BILLING CODE 4510-27-P
