eTrends - Regulatory Update from the Office of Federal Contract Compliance Programs

Throughout 2008, the Office of Federal Contract Compliance Programs (“OFCCP”) released numerous rules and directives applicable to federal contractors.  Set forth below is a summary of several of the major developments:

Final Rule on Nondiscrimination and Affirmative Action Obligations of Contractors and Subcontractors Regarding Protected Veterans
On April 7, 2008, the OFCCP published a final rule affecting employers with federal contracts of at least $25,000 that were entered into before December 1, 2003.  The final rule implements the nondiscrimination and affirmative action provisions of the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended (“VEVRAA”). The final rule also addresses an employer’s obligation to list employment openings with the state workforce agency job bank or the local employment service delivery system where the opening occurs. The rule is available at

Directive on Preserving Employment/Personnel Records
On May 14, 2008, the OFCCP issued an administrative directive setting out the agency’s policy regarding (i) the use of electronic systems to comply with record retention regulations, and (ii) the destruction of paper originals of personnel and employment records that are otherwise preserved in electronic format. The directive permits the use of electronic storage of records, provided that safeguards are in place to ensure that the electronic system is reliable and that electronic records are complete, accurate, and accessible. The directive is available at

Final Rule on Annual Reports from Federal Contractors
On May 19, 2008, the DOL issued a final rule affecting federal contractors with federal contracts of at least $100,000 that were entered into on or after December 1, 2003.  The final rule implements amendments to federal contractors’ requirements to track and report the number of employees in their workplace who are covered military veterans.  The final rule also requires such federal contractors to annually file a new form, VETS-100A, and clarifies that employers with federal contracts entered into prior December 1, 2003, worth $ 25,000 or more will continue using VETS-100. The rule is available at

Directives on the Good-Faith Initiative for Veterans’ Employment and Online Job Application Accessibility

On July 24, 2008, the OFCCP announced two administrative directives affecting federal contractors.  First, the “Good-Faith Initiative for Veterans’ Employment” (G-FIVE) sets forth a program to recognize companies’ best practices for the employment and advancement of veterans.  This directive rewards companies that are recognized under the G-Five initiative by excluding them from OFCCP compliance evaluations for three years in the absence of any disqualifying factors.  Second, “Ensuring the Accessibility of Online Application Systems” requires that online employment applications systems be reviewed during compliance evaluations to ensure that federal contractors are providing equal employment opportunities to applicants with disabilities.  The directives are available at

Interim Guidance on Race and Ethnic Categories in AAP’s

On August 1, 2008, the OFCCP issued new interim guidance on federal contractors’ use of race and ethnic categories in their Affirmative Action Programs (“AAP”). The updated interim guidance is unchanged from the agency’s August 2007 interim guidance, with three exceptions.  First, until further rules and guidance are provided, OFCCP will not cite contractors for non-compliance if they use the race and ethnic categories of the revised EEO-1 report, instead of the categories of the previous EEO-1 report, to prepare their AAP.  Second, federal contractors should consider all people belonging to two or more races as minorities when comparing women and minorities in each job group to the available workforce. Third, when establishing placement goals, federal contractors should continue to establish a single goal for all minorities. The guidance is available at

Directive on Form I-9 Inspections
On September 5, 2008, the OFCCP issued an administrative directive on the procedures that OFCCP Compliance Officers should follow in reviewing Form I-9’s when conducting compliance evaluations.  In particular, the directive advises the federal contractor may be required to provide hardware and software, personnel, and documentation necessary for the Compliance Officers to review any electronically-stored Form I-9, supporting documents, and associated audit data used to maintain the authenticity, integrity and reliability of the records.  The federal contractor may also be required to produce electronic summary files, such as spreadsheets containing all the information fields on all the electronically-stored Form I-9’s.  The directive is available at

For more information, please contact Kerry A. Shad

Employment, Labor and Human Resources

Employee Benefits and Compensation

Environmental Health and Safety

Government Contracting


Smith Anderson publishes eTrends periodically as a service to clients and friends. The purpose of this eTrends is to provide general information about a significant legal development in the field of employment law. Readers should be aware that the facts may vary from one situation to another, so the conclusions stated herein may not be applicable to the reader’s particular circumstances.

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