I would like to outline DirectEmployers’ approach to OFCCP compliance for its member companies. This is not intended to be a legal opinion — just clarification as to our approach and to answer many questions we have had related to OFCCP compliance. “Thank you” to David Morman for providing background information for this post.

Failure of OFCCP to issue final rules implementing the Jobs for Veterans Act of 2002 has created some confusion about how employers with federal contracts are to comply with the “mandatory listing” requirements of 38 USC 4212 and its predecessors. The issue arises particularly for those who are using America’s Job Bank as a compliance vehicle something permitted by current regulations (41CFR60-250.5 Paragraph 2) but which will become unavailable beginning June 29th when the Labor Department terminates AJB.

The lack of final rules has resulted in significant speculation about how compliance can be achieved in the post America’s Job Bank world. The answer to that question is not simple and depends on two primary facts – 1) whether the contractor has any pre-December 1, 2003 contracts still in effect, and 2) whether OFCCP has issued final rules. There is a significant “hope” in the market that simply listing jobs with State Job Banks will be sufficient. As we explore the regulatory landscape, we believe that hope could be revealed as wishful thinking more than anything else.

Post AJB Compliance with the Mandatory Listing Requirements

It would be difficult to read the entirety of the current and proposed rules and come away with a reading that says listing with a State Job Bank would be sufficient to guarantee compliance. Perhaps OFCCP will issue such regulations but they have not yet and a look at the statute itself would make that option unlikely.

There will be two sets of rules at play. The first set which applies now to any company with a contract for more than $25,000 that was signed before December 1, 2003 will be in effect as long as those contracts are active (which could be several years). Those rules apply not just to jobs covered by the contract but to all jobs in the company (which a few exceptions for top executives and very short term jobs). See 41CFR60-250.5, Paragraph 2.

Those rules require that the listing be done “at an appropriate local employment service office of the state employment security agency wherein the opening occurs.” They allow for the AJB listing as compliance; however, when AJB ends on June 29th the only compliance method under the current rules will be listing with a local office.

A company which has no pre 12/1/03 contracts will not be covered by this rule, provided that OFCCP actually issues final rules for the Jobs for Veterans Act. If OFCCP does not issue the JVA rules by June 29th, AJB’s last day, all companies will need to comply with the current rules and the only compliance method will be listing at “at an appropriate local employment service office of the state employment security agency wherein the opening occurs.” Companies with pre-12/01/03 contracts will be covered by the old rules as long as those contracts are in place. The plain language of 41CFR60-250.5 Paragraph 2 covers all that company’s jobs. OFCCP in its notice of proposed rule making stated: “Contractors with contracts entered into both before, and on or after December 1, 2003, will be subject to both the requirements found in part 60-250 and the requirements proposed for part 60-300.” (Page 3353 of the Federal Register for January 20, 2006).

The proposed rules contain the potentially unclear phase “appropriate employment service delivery system.” The words themselves may be unclear; but in the context of Title 38 they have a fairly established meaning. Section 4104 of Title 38 which establishes the LVER (Local Veteran Employment Representative) program states in paragraph (d) “Each local veterans’ employment representative shall be administratively responsible to the manager of the employment service delivery system and shall provide reports, not less frequently than quarterly, to the manager of such office and to the Director for Veterans’ Employment and Training for the State regarding compliance with Federal law and regulations with respect to special services and priorities for eligible veterans and eligible persons.”

The movement of Wagner Peyser services into One-Stop Career Centers in many States created the shift in language (from employment service office to employment service delivery system) but the listing is now and always has been to facilitate the employment of veterans by having the local office and the DVOP/LVER “work” the job order on behalf of their veteran customers. That rationale is also contained in the current and the proposed regulations in 60-250.84 and 60-300.84.

The Jobs for Veterans Act itself speaks to that rationale in its own statutory language. 38 USC 4212 Section (a)(2)(A) requires the mandatory listing by federal contractors. Section (a)(2)(B) requires the employment service delivery system to provide priority referral of qualified veterans to those jobs. The mandatory listing is not so that the general public can see the job but so that qualified veterans can get priority referrals to those jobs. That priority referral process has been and continues to be a “local” process which involves staff, either general purpose or DVOP/LVER, that “work” the job orders on behalf of the qualified veterans.

Perhaps most troubling for the “hope” that listings with State Job Banks alone will satisfy is Section (a)(2)(C) of 38 USC 4212 which requires the “employment service delivery system” that has received that listing to “provide a list of such employment openings to States, political subdivisions of States, or any private entities or organizations under contract to carry out employment, training, and placement services under chapter 41 of this title.” If Congress had intended that a compliant listing could be made at the State Job Bank level, there would be little reason for the addition of States to the list of entities with whom the job listing should be shared.

It is also useful to note that requirements of the Jobs for Veterans Act are not self-implementing. The introductory paragraph in 38 USC 4212 (a)(2) states “the Secretary of Labor shall prescribe regulations requiring” which is followed by the particular statements in paragraphs A, B and C. OFCCP itself recognizes need for the new rules before the JVA requirements become effective. It states in answer to the question “Does listing a job with America’s Job Bank (AJB) satisfy mandatory listing for veterans?”

Currently all covered contractors may list their job openings with either America’s Job Bank or with an appropriate local employment service office. After OFCCP promulgates a new VEVRAA regulation implementing the Jobs for Veterans Act (JVA), covered contractors with contracts entered on or after December 1, 2003, will be required to post their jobs at an appropriate employment service delivery system. The Department of Labor is working on a new option to allow contractors to meet both the current and the revised mandatory job-listing requirement. A new web portal, the Veterans’ Job Clearinghouse, will automatically post listed employment openings with the appropriate employment service delivery system while also giving contractors the option of continuing to list job openings on America’s Job Bank. But until the final regulations implementing JVA amendments go into effect, contractors may continue to fulfill their job listing requirements by using either America’s Job Bank or their local employment service office. (See http://www.dol.gov/vets/contractor/main.htm#A-4)

The Veterans’ Job Clearinghouse (VJC) mentioned above was designed to deliver the job openings, then posted on America’s Job Bank, to DVOP/LVER staff at the local offices not to the State Job Banks. The Labor Department abandoned the VJC effort, in part because it was dependent on AJB; however, DirectEmployers Association is using the Veterans’ Job Clearinghouse approach of local office delivery in its VETCentral compliance tool and has engaged the vendor for the VJC to build VetCentral.

The DirectEmployers Association Approach

DirectEmployers Association, through JobCentral National Labor Exchange and VetCentral, will approach compliance as requiring delivery of the job listing to the local office which delivers Wagner-Peyser labor exchange services that is nearest the hiring location. That approach is based on DirectEmployers’ understanding of the current and proposed rules and the belief that it is the best interest of its member companies to provide compliance that is conservative rather than speculative.

Some companies may hope that listing with a State job bank, which does not generate compliance with the current rules, would now generate compliance with the proposed rules. But that hope does not seem to have much basis in the statute, the regulations themselves, or the practice of the employment service.

Things to consider –

1) The proposed rules for post 12/01/03 contracts are not final and OFCCP has not stated when they will issue the final rules.

2) The current rules are in effect for all federal contractors until the new rules are issued and will cover any federal contactor with a pre-12/01/03 contract. Those rules are not at all unclear — on June 30th the only acceptable compliance method will be listing with a “local employment service office.”

3) AJB does not now deliver job listings to all States. Less than half of the States take the current AJB download of jobs. That number is not likely to improve when AJB ends. A good example is Alabama where major defense contractors have large facilities does not take the AJB feed now. It will be difficult for anyone other than DirectEmployers to provide compliance under even the “hopeful” reading of the proposed rules given that reality.

4) We know of no other approach that provides compliance for companies that must also comply with the current rules in 41CFR60-250.

DirectEmployers Association is taking the conservative approach to compliance (usually the way most company lawyers approach the issue) and making sure member companies are covered whatever the eventual ruling and interpretation of the rules might be. While on June 30th, DirectEmployers will be downloading jobs to more States than currently take the AJB feed; it will not have 100% coverage of all States. DirectEmployers will provide compliance by delivering its member company jobs to the local offices in all the States.

DirectEmployers Association member companies will not be surprised. Companies depending on “hopeful” interpretations of the law and regulations may be.