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Congressional Testimony

STATEMENT OF Lorenzo Harrison
Acting Deputy Assistant Secretary
Office of Federal Contract Compliance Programs

U.S. DEPARTMENT OF LABOR

BEFORE THE
SUBCOMMITTEE ON ECONOMIC OPPORTUNITY
COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES

MAY 14, 2009

Chairwoman Herseth Sandlin, Ranking Member Boozman, and members of the

Subcommittee:

Thank you for the opportunity to testify on "Federal Contractor Compliance" as authorized by the affirmative action provisions of the Vietnam Era Veterans' Readjustment Assistance Act of 1974 ("VEVRAA" or "Section 4212"), as amended, 38 U.S.C. 4212. Your invitation letter asked for an in-depth look into how the Department of Labor's (DOL) – Office of Federal Contract Compliance Programs (OFCCP) monitors compliance, what steps it takes to provide affirmative employment opportunities to covered veterans, and how it ensures that the laws are enforced. Further, your invitation listed several specific questions concerning veteran complaints, sharing of federal contractor information among other federal agencies, federal contractors' compliance, OFCCP's use of penalties and incentives to increase compliance, and the results of the most recent analysis of the VETS-100 Report.

OFCCP is one of four programs within the Department of Labor's Employment Standards Administration. It has a staff of approximately 585 employees, most of whom are Compliance Officers. OFCCP has six Regional Offices and more than 45 district and area offices nationwide.

As you are aware, OFCCP enforces three equal employment opportunity laws: Executive Order 11246, as amended (Executive Order); Section 503 of the Rehabilitation Act of 1973, as amended; and VEVRAA. Taken together these laws require affirmative action and prohibit federal contractors and subcontractors from discriminating on the bases of race, color, religion, sex, national origin, or status as a qualified individual with a disability or protected veteran.

VEVRAA and its implementing regulations originally prohibited federal contractors from discriminating in employment and required them to take affirmative action to employ and advance in employment qualified special disabled veterans and veterans of the Vietnam era. Statutory amendments made in 1998, 2000, and 2002 modified VEVRAA's coverage to include other protected veterans (veterans who served on active duty or in a campaign or expedition for which a campaign badge has been authorized, recently separated veterans, Armed Forces Service Medal veterans, and all veterans with service-connected disabilities).

VEVRAA requires federal contractors to take special steps to recruit, hire, train, and promote qualified protected veterans. In addition, to implement the affirmative action requirement, VEVRAA and its implementing regulations found at 41 C.F.R. Parts 60-250 and 60-300, require contractors to list most job openings with the appropriate employment service delivery system and each such employment service delivery system is to provide protected veterans who are qualified priority referrals to those job openings.

VEVRAA does not require federal contractors to give veterans a special preference in hiring. Under VEVRAA, protected veterans are entitled to receive priority in referrals to the job openings that federal contractors are required to list with the appropriate employment service delivery system.

OFCCP is one of three agencies within the Department of Labor (DOL) with responsibilities for administering the affirmative action provisions of VEVRAA. The other agencies with responsibilities under VEVRAA are the Employment & Training Administration (ETA) and the Veterans' Employment and Training Service (VETS). ETA oversees priority referrals for veterans seeking employment, and VETS oversees the VETS-100, and VETS-100A Reports.

OFCCP is responsible for ensuring compliance with the requirement in Section 4212 (a)(1) that contractors take affirmative action to employ and advance in employment qualified protected veterans, and the requirement in Section 4212(a)(2)(A) that contractors list their employment openings with the appropriate employment service delivery system. ETA is responsible for ensuring that the appropriate employment service delivery systems comply with the requirement in Section 4212(a)(2)(B) that covered veterans receive priority in referral to federal contractor employment openings. ETA also provides leadership and oversight over the employment service offices of State workforce agencies. VETS administers the requirement in Section 4212(d) that federal contractors report annually on the number of employees and new hires in their workforces who are covered veterans. Further, VETS administers a local veterans' employment representative program to assist local employment service offices and One Stops in providing priority job referrals to veterans ( 38 U.S.C. 4104), and investigates complaints under the Uniformed Services Employment and Reemployment Rights Act program, which also protects veterans from employment discrimination.

According to the Department's Bureau of Labor Statistics (BLS), as of the first quarter of the calendar year ending March 2009 approximately 12 million veterans are in the civilian labor force. VEVRAA protects specified categories of veterans that are employed or seeking employment with covered federal contractors and subcontractors.

There are two primary enforcement procedures that OFCCP utilizes to ensure that federal contractors and subcontractors are complying with VEVRAA – scheduled compliance evaluations of federal contractors, and investigations of individual or class complaints alleging discrimination that are filed by veterans.

On average, OFCCP conducts approximately 4,000 compliance evaluations and 900 compliance assistance events annually nationwide for federal contractors and subcontractors in the supply, service, and construction industries. In FY 2008, nearly 20 percent of the compliance evaluations included an examination of the contractor affirmative action program (AAP) for veterans as required by the regulations in 41 C.F.R. Parts 60-250 and 60-300.

During FY 2008, OFCCP conducted nearly 800 on-site investigations. OFCCP's investigative procedures during an on-site investigation include verification that the employer is listing appropriate job openings with the employment service delivery system so that veterans may be given priority in referral, as stated in 41 C.F.R. 60-250.5(a)(2) and 60-300.5(a)(2). So far, in FY 2009, roughly 15% of all on-site reviews conducted by OFCCP found violations of the mandatory job listing requirement for veterans by federal contractors and subcontractors.

OFCCP's efforts on behalf of equal opportunity for veterans extend beyond compliance evaluations of federal contractors and subcontractors. If a veteran believes a federal contractor or subcontractor has discriminated against him or her or that a federal contractor has otherwise violated VEVRAA and the regulations, he or she may file a complaint with OFCCP. Complaints may also be filed through VETS in DOL or through a local Veteran's Employment Representative (LVER) at a local American Job Centers. Complaints filed through VETS or LVERs are promptly referred to OFCCP.

During FY 2008, OFCCP received 543 complaints from individuals under the three equal employment opportunity laws enforced by OFCCP. Eighty-three (83) of those complaints were filed by veterans under VEVRRA. The table below responds to the subcommittee question regarding the number of complaints that OFCCP receives each year. Using the number of initial complaints received, OFCCP has received approximately 500-700 complaints each year over the past five fiscal years, with 15 to 20 percent of these being complaints based on veteran's status. Once a complaint is received and prior to conducting an investigation, OFCCP must determine if the employer is a covered federal contractor and if the complaint was timely filed.

OFCCP Complaints Received
(FY 2004-2008)

Fiscal Year

Total Complaints
Received

E.O. 11246

Sec. 503

Veterans
38 U.S.C. 4212

#

%
Rec'd

#

%
Rec'd

#

%
Rec'd

FY 2004

691

315

45.59%

200

28.94%

136

19.68%

FY 2005

717

354

49.37%

191

26.64%

119

16.60%

FY 2006

594

276

46.46%

151

25.42%

116

19.53%

FY 2007

519

251

48.36%

159

30.64%

76

14.64%

FY 2008

543

275

50.64%

148

27.26%

83

15.29%

Source: OFIS CI-006B 10/21/08 and 04/28/09

Over the last five fiscal years, OFCCP conducted a total of 321 investigations resulting from complaints filed by veterans. Nineteen of these investigations identified violations and were ultimately closed with financial agreements, which resulted in a total of $399,926 in benefits provided to veterans. Additionally, OFCCP investigates cases under VEVRAA that result from scheduled compliance evaluations. In FY 2008, 68 contractors were cited for violations of the mandatory job listing requirement, which resulted in conciliation agreements with OFCCP to correct the violation and to report their progress to OFCCP.

In response to the subcommittee question concerning how long it takes to resolve a complaint, on average, most complaint investigations are completed within 8 to 12 months. Investigatory time includes time spent with the complainant to be sure that the complaint adequately reflects the nature of the acts that led the individual to file, time spent researching jurisdiction to ensure that the company was a covered federal contractor at the time of the alleged discriminatory act, and the time spent conducting the investigation of the complaint.

The subcommittee asked which type of businesses and which geographical areas receive the highest number of complaints. Over 75 percent of all complaints made by veterans come from seven industries, which are identified in the table below.

VETERANS COMPLAINTS RECEIVED BY INDUSTRY

NAICS

INDUSTRY

PERCENT

31-33

Manufacturing

27.5

54

Professional, Scientific & Tech. Services

12.6

56

Administration & Waste Management

10.0

61

Educational Services

9.5

48-49

Transportation & Warehousing

7.6

51

Information

5.2

62

Health Care

4.4

All Other

23.2

Over the past five years, the Southeast and Midwest Regions of OFCCP have received the most veterans' complaints.

VEVRAA enforcement activities include:

  • Conducting compliance evaluations and complaint investigations of federal contractors and subcontractors personnel policies and procedures;
  • Offering technical assistance to federal contractors and subcontractors to help them understand the regulatory requirements and review process;
  • Securing relief for victims of discrimination that includes, but is not limited to, back pay for lost wages;
  • Negotiating conciliation agreements with contractors and subcontractors who are in violation of regulatory requirements;
  • Monitoring contractors' and subcontractors' progress to ensure that they are fulfilling the terms of their conciliation agreements by reviewing periodic compliance reports;
  • Forming linkage agreements between contractors and job training programs to help employers identify and recruit covered veterans; and
  • Recommending enforcement actions to DOL's Solicitor of Labor.

The subcommittee further asked what penalties OFCCP uses to increase federal contractor compliance. Where voluntary compliance cannot be achieved, OFCCP may continue conciliation efforts with the contractor; refer the matter to the Solicitor of Labor to institute formal, administrative enforcement proceedings; or refer the case to the Attorney General for litigation, as appropriate. If there is a finding of discrimination against a protected veteran, the contractor would be required to provide back-pay and other make-whole remedies.

Regarding the subcommittee's question whether OFCCP shares information with other agencies on federal contractors who have failed to comply, OFCCP does not presently have formal agreements to share such information. However, OFCCP does use its available resources, such as media releases, to communicate OFCCP policies, accomplishments, best practices, awards, and enforcement actions. Information about enforcement actions OFCCP may publicize would include the filing of administrative complaints, the signing of conciliation agreements, the entry of consent decrees, orders of debarment, or other news that may be appropriate for public dissemination as determined by OFCCP's National Headquarters.

OFCCP treats information received from federal contractors during a compliance evaluation as confidential, to the maximum extent allowable under the Freedom of Information Act (FOIA). It is OFCCP practice not to release data where the contractor is still in business and where the contractor asserts, and a Department of Labor review process determines, that the data are confidential and that disclosure would subject the contractor to commercial harm. The Department's FOIA regulations at 29 C.F.R. 70.26 require OFCCP to notify affected contractors on a case-by-case basis whenever a FOIA request is made. This notification gives contractors the opportunity to object to the disclosure of any data they consider confidential.

The subcommittee also asked about the most recent analysis of the VETS-100 Report and associated results. OFCCP does not analyze the VETS-100 or 100A Reports. During a compliance evaluation, OFCCP verifies that the required VETS-100 or 100A Reports have been submitted to VETS.

VEVRAA also requires that Government contractors track and annually report the number of employees in their workforces who are veterans covered under the law. The reporting requirements under VEVRAA are administered by VETS. The VETS-100 Report is filed by contractors who entered into covered contracts prior to December 1, 2003. The VETS-100A Report is filed by contractors who entered into covered contracts on or after that date. Those with covered contracts entered both before and after December 1, 2003 file both reports. The reports differ in terms of the contract coverage threshold for filing the report as well as the categories of protected veterans included in each report.

Federal contractors and subcontractors awarded a federal contract of $25,000 or more prior to December 1, 2003 are required to report annually to the Secretary of Labor the number of employees and recent hires who are:

  • Special disabled veterans;
  • Vietnam Era veterans;
  • Recently separated veterans (within 12 months of discharge from active duty); and
  • Veterans who served on active duty in the U.S. military during a war or campaign or expedition for which a campaign badge is awarded.

The regulations in 41 C.F.R. Part 61-250 require contractors to use the Federal Contractor Veterans' Employment Report VETS-100 ("VETS-100 Report") form to provide the information on the covered veterans in their workforces. In FY 2008, 22,159 federal contractors and subcontractors filed a VETS-100 Report, and reported the employment of 341,000 Vietnam Era veterans and 62,000 Special Disabled veterans. Of these figures, 32,000 Vietnam Era veterans and nearly 15,500 Special Disabled veterans were newly hired during the 2008 reporting period.

The Jobs for Veterans Act (JVA) amended the VEVRRA reporting requirements for those contractors and subcontractors with federal contracts of $100,000 or more awarded or modified on or after December 1, 2003. The JVA requires reporting on the following categories of veterans:

  • Disabled veterans;
  • Veterans who served on active duty in the U.S. military during a war or campaign or expedition for which a campaign badge is awarded;
  • Veterans who, while serving on active duty in the Armed Forces, participated in a United States military operation for which an Armed Forces service medal was awarded pursuant to Executive Order 12985; and
  • Recently separated veterans (with 36 months from discharge from active duty).

The regulations that implement the JVA amendments are found in 41 C.F.R. Part 61-300, and require filing of a VETS-100A Report. The VETS-100A reporting requirements apply to reports submitted for 2009 and future years. Covered federal contractors and subcontractors are required to submit their first VETS-100A between August 1, 2009, and September 30, 2009.

There are some contractors that will be required to submit both the VETS-100 and the VETS-100A Reports in 2009 and subsequent years. Contractors that hold "unmodified" active contracts valued at $25,000 or more that were awarded before December 1, 2003, who also enter into or modify one or more contracts valued at $100,000 or more on or after December 1, 2003, will be required to submit both the VETS-100 and VETS-100A Reports. The VETS 2010 Annual Report to Congress will include information on the number of federal contractors and subcontractors that were required to submit both a VETS-100 and a VETS-100A Report in 2009.

Federal Contracting Officers are prohibited from awarding or modifying federal contracts unless the latest VETS-100 or VETS-100A Report has been submitted (31 U.S.C. 1354). The Secretary of Labor makes a database available to Federal Contracting Officers listing the VETS-100 and VETS-100A Reports received from federal contractors and subcontractors.

We know that there is still work to be done to increase the employment of covered veterans. In response to the subcommittee question regarding incentives that OFCCP uses to increase compliance by federal contractors, in 2008 OFCCP established the "Good-Faith Initiative for Veterans Employment (G-FIVE) ," which is an incentive program that recognizes the efforts of contractors in the area of veterans' employment. G-FIVE reaffirms OFCCP's commitment to ensure compliance with the requirements of VEVRAA; recognizes companies' "best practices" for the employment and advancement of veterans; creates an incentive for federal contractors and subcontractors to increase their employment of, and affirmative action for, covered veterans; and strengthens VEVRAA partnerships between OFCCP, other federal agencies and veterans advocacy groups.

The following factors are considered when evaluating federal contractor and subcontractor establishments for G-FIVE recognition:

  • Evidence of covered veterans in the contractor's labor force;
  • During the AAP year, evidence of an increase in the number of covered veterans in the contractor's labor force;
  • The number of partnerships with local veterans' service organizations to employ or advance covered veterans;
  • Established liaison with the state workforce agency job bank or the local employment service delivery system representative to facilitate the posting of their job listings;
  • Whether appropriate job openings were sent to the state and/or local employment service delivery system;
  • Number of veterans hired by the contractor during the AAP year;
  • Recruitment efforts at educational institutions to reach students who are covered veterans;
  • The number of job advertisements in the local community targeting veterans;
  • Targeted recruitment of qualified covered veterans during company career days and/or related activities in contractor communities;
  • For prime contractors, evidence that demonstrates a commitment to encourage their subcontractors to seek qualified covered veterans for employment opportunities;
  • Affirmative action steps taken to attract qualified special disabled or disabled veterans through the nearest Veterans Administration job placement program; and
  • The number of on-the-job training opportunities provided to covered veterans.

G-FIVE rated contractors and subcontractors are eligible to receive certificates and are recognized on the OFCCP web site. Additionally, the establishments of contractors or subcontractors which received a G-FIVE rating are excluded from an OFCCP compliance evaluation for three years following the receipt of the rating, unless: 1) a complaint suggests equal employment opportunity issues that warrant a compliance evaluation; 2) an EEOC or State fair employment practices agency investigation reveals significant equal employment opportunity issues; or 3) the OFCCP Deputy Assistant Secretary, acting upon a credible report of a violation of a law enforced by OFCCP, determines that a compliance evaluation is warranted. Since calendar year 2008, OFCCP has recognized five federal contractors for their exemplary efforts in hiring covered veterans.

Another initiative sponsored in part by OFCCP is Operation Stand Down, an annual event held in Nashville, Tennessee to assist homeless veterans. Operation Stand Down provides services to honorably discharged veterans, including employment services, transitional housing, and referrals to other support services agencies.

In summary, although we have made progress in addressing equal employment opportunity for veterans among federal contractors and subcontractors, we have an opportunity at this point in time to build on our efforts to further full economic opportunity for veterans throughout America's workforce. OFCCP looks forward to working with our new Deputy Assistant Secretary, once that person is announced and on board, and Members of this Committee in order to improve employment opportunities for veterans.

This concludes my statement, and I would be happy to respond to any questions.

The Veterans Employment Opportunities Act of 1998, the Veterans Benefits and Health Care Improvement Act of 2000, and the Jobs for Veterans Act enacted in 2002.

41 C.F.R. 60-300.5(a)(2)

North American Industry Classification System (NAICS): The NAICS is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy.

OFCCP's Good-Faith Initiative for Veterans Employment (G-FIVE) web page, http://www.dol.gov/esa/ofccp/g_five.htm.