On August 4, 2023, the Office of Federal Contract Compliance Programs (OFCCP) is publishing the final rule “Pre-enforcement Notice and Conciliation Procedures,” (2023 final rule) in the Federal Register. OFCCP rescinds the evidentiary standards and definitions codified in 2020, Nondiscrimination Obligations of Federal Contractors and Subcontractors: Procedures to Resolve Potential Employment Discrimination (2020 rule), to replace them with a more streamlined, effective, and flexible pre-enforcement and conciliation process consistent with Title VII of the Civil Rights Act of 1964 (Title VII). This final rule promotes the efficient and effective enforcement of legal authorities applicable to federal contractors and subcontractors.
Overview
- Why did OFCCP modify the 2020 rule?
- What provisions from the 2020 rule did OFCCP retain in the 2023 final rule?
- How is the 2023 final rule different from the 2020 rule?
- How does the 2023 final rule impact OFCCP’s use of the PDN and NOV?
Application of the 2023 final rule
- When does the 2023 final rule take effect and what does that mean for compliance evaluations that are in progress as of the effective date?
- What is the Predetermination Notice, commonly referred to as the “PDN,” and how is it used in the conciliation process?
- Can OFCCP issue a PDN prior to an onsite review?
- Under the 2023 final rule, what information will OFCCP include in a PDN?
- Under the 2023 final rule, what standards must OFCCP satisfy when attempting to secure compliance through conciliation?
- What is the deadline to respond to a PDN?
- Are there any circumstances under which OFCCP may grant an extension to respond to a PDN?
- If OFCCP discovers additional violations after issuing a PDN, will OFCCP issue an amended PDN?
- How does the 2023 final rule change OFCCP’s conciliation process?
- Will the expedited conciliation option continue to be available?
Technical Assistance and Public Education
- What steps has OFCCP taken to educate the public on the “Pre-enforcement Notice and Conciliation Procedures” final rule (e.g., workshops, webinars, and the issuance of other guidance materials)?
- How can I learn more about these educational events and opportunities?
Overview
1. Why did OFCCP modify the 2020 rule?
OFCCP determined that the 2020 rule’s inflexible evidentiary standards and definitions obstructed OFCCP’s pre-enforcement processes. The 2020 rule impeded OFCCP’s ability to tailor its pre-enforcement processes to the specific facts and circumstances of each compliance evaluation, conflated the purposes of the Predetermination Notice (PDN) and Notice of Violation (NOV), and diverted limited agency resources away from investigating compliance with non-discrimination obligations to procedural disputes and other collateral challenges caused by the inflexible evidentiary standards.
2. What provisions from the 2020 rule did OFCCP retain in the 2023 final rule?
- The 2023 final rule continues to require agency-wide use of the PDN when the agency identifies preliminary findings of potential discrimination during a compliance evaluation, which promotes transparency and consistency.
- The 2023 final rule also retains the expedited conciliation option, which permits OFCCP to enter directly into a conciliation agreement if the contractor wishes to bypass the notice procedures.
3. How is the 2023 final rule different from the 2020 rule?
- The 2023 final rule rescinds the evidentiary standards codified by the 2020 rule and replaces them with a more streamlined, effective, and flexible pre-enforcement and conciliation process.
- It clarifies OFCCP’s use of the PDN and the NOV as pre-enforcement procedures by restoring the distinct purposes of each notice. OFCCP replaced the term “indicators of discrimination” with “preliminary findings of potential discrimination,” to make clear that the agency will only issue a PDN after a rigorous review of the record that identifies preliminary findings of potential discrimination.
- When new evidence is identified later in OFCCP’s investigation, the 2023 rule promotes efficiency by allowing OFCCP the flexibility to include additional violations in a subsequent NOV or Show Cause Notice (SCN) without having to amend the previously issued PDN or NOV. Throughout the conciliation process, contractors continue to have an opportunity to discuss any additional violations, confer with OFCCP, and provide relevant information for OFCCP’s review and consideration.
- Aligning OFCCP’s conciliation standards with Title VII, the 2023 final rule clarifies the “reasonable efforts” standard that OFCCP must satisfy when attempting to secure compliance through conciliation.
- The 2023 rule deletes the severability clause that applied just to certain sections of OFCCP’s regulations and replaces it with severability clauses covering the entirety of each part of OFCCP’s regulatory scheme.
4. How does the 2023 final rule impact OFCCP’s use of the PDN and NOV?
The 2023 final rule clarifies OFCCP’s use of the PDN and NOV as pre-enforcement procedures and restores the distinct purposes of each notice rather than requiring OFCCP to use two notices with duplicative evidentiary standards.
Application of the 2023 final rule
1. When does the 2023 final rule take effect and what does that mean for compliance evaluations that are in progress as of the effective date?
The 2023 final rule is effective as of September 5, 2023. The 2023 final rule applies to any pre-enforcement notices and actions issued on or after the effective date. For example, OFCCP may have issued a PDN to a contractor under the standards in the 2020 rule, but if it then proceeds to issue an NOV or SCN after the effective date of the 2023 final rule, the standards in 2023 final rule apply to those notices.
2. What is the Predetermination Notice, commonly referred to as the “PDN,” and how is it used in the conciliation process?
A PDN is a letter that OFCCP uses to inform federal contractors and subcontractors of the agency’s preliminary findings of potential employment discrimination. The agency may issue a PDN when there is an initial indicator of potential discrimination but only after OFCCP has rigorously reviewed the record and identified preliminary findings of potential discrimination, consistent with current practice. The PDN provides contractors with an opportunity to respond prior to OFCCP deciding to issue an NOV.
3. Can OFCCP issue a PDN prior to an onsite review?
Yes, in some cases. The provisions in the 2023 final rule provide OFCCP the flexibility to issue a PDN to a contractor at the point where OFCCP has reached a preliminary finding of potential discrimination, based on the available facts and data. The appropriate time to issue this notice will depend upon the facts and circumstances of each compliance evaluation. OFCCP will continue to conduct an onsite review before issuing a PDN where it determines that further information is beneficial to assess whether preliminary findings of potential discrimination exist.
4. Under the 2023 final rule, what information will OFCCP include in a PDN?
The PDN will continue to describe OFCCP’s preliminary findings of potential discrimination and any other potential violations to enable the contractor to understand OFCCP’s position and provide a substantive response. OFCCP will tailor the PDN to the facts and circumstances of each compliance evaluation. The PDN is mutually beneficial for OFCCP and the contractor under review because it provides the contractor with an earlier opportunity to respond to potential issues before OFCCP makes a determination on violations.
5. Under the 2023 final rule, what standards must OFCCP satisfy when attempting to secure compliance through conciliation?
The 2023 final rule clarifies the “reasonable efforts” standard, to make clear that OFCCP’s conciliation standards align with Title VII principles. This clarification ensures interpretation of OFCCP’s regulations on securing compliance to remedy discrimination through conciliation is consistent with the Title VII provision on endeavoring to eliminate unlawful discrimination by conciliation.
6. What is the deadline to respond to a PDN?
Contractors must respond to the PDN within 15 calendar days.
7. Are there any circumstances under which OFCCP may grant an extension to respond to a PDN?
OFCCP may grant an extension for good cause. Examples of good cause include, but are not limited to:
- extended medical absences of key personnel;
- localized or company-specific disaster affecting records retrieval such as a flood, fire, or computer virus;
- unexpected military service absence of key personnel; or
- unexpected departure of key affirmative action official.
If the contractor does not respond or OFCCP determines that the contractor’s response and any additional investigation undertaken by the agency did not resolve the preliminary findings of potential discrimination or other violations identified in the PDN, OFCCP may proceed to issue an NOV.
8. If OFCCP discovers additional violations after issuing a PDN, will OFCCP issue an amended PDN?
If OFCCP identifies additional violations after issuing a PDN, it will include those violations in a subsequent NOV or SCN without amending and reissuing the PDN. The contractor has sufficient opportunities to respond to any additional violations following the NOV and SCN, if issued. Throughout the conciliation process, contractors continue to have an opportunity to discuss any additional violations, confer with OFCCP, and provide relevant information for OFCCP’s review and consideration. The PDN is simply the first notice in this multi-stage process.
9. How does the 2023 final rule change OFCCP’s conciliation process?
Removal of the inflexible regulatory requirements will result in a more streamlined, effective, and flexible pre-enforcement and conciliation process, ensuring OFCCP utilizes its resources strategically to advance equal employment opportunity through the efficient and effective enforcement of its legal authorities. The focus of communication will shift from disputes over unnecessary regulatory requirements to the merits of the analysis that underlies OFCCP’s preliminary findings of potential discrimination. The 2023 final rule is intended to foster open communication to ensure contractors understand the nature of any concerns identified in the pre-enforcement notices.
10. Will the expedited conciliation option continue to be available?
OFCCP retained the expedited conciliation option in the 2023 final rule. The 2023 final rule made general edits to improve procedural efficacy and clarify OFCCP’s role in the expedited conciliation process.
Technical Assistance and Public Education
1. What steps has OFCCP taken to educate the public on the “Pre-enforcement Notice and Conciliation Procedures” final rule (e.g., workshops, webinars, and the issuance of other guidance materials)?
OFCCP has a webpage dedicated to educating contractors, stakeholders, and the general public about the 2023 final rule. OFCCP also provides compliance assistance on OFCCP’s pre-enforcement notice and conciliation procedures through these frequently asked questions, conducting webinar(s), and providing other compliance assistance requested by stakeholders. OFCCP will also announce any additional materials or webinars through stakeholder messages.
2. How can I learn more about these educational events and opportunities?
You may sign up for OFCCP’s stakeholder messages for alerts about upcoming events on OFCCP’s website. You may also submit questions or call OFCCP’s toll-free Help Line at 1-800-397-6251.
Last updated on August 3, 2023