Pre-Enforcement Notice and Conciliation Procedures

CourtFederal Contract Compliance Programs Office
Citation87 FR 16138
Record Number2022-05696
Published date22 March 2022
Federal Register, Volume 87 Issue 55 (Tuesday, March 22, 2022)
[Federal Register Volume 87, Number 55 (Tuesday, March 22, 2022)]
                [Proposed Rules]
                [Pages 16138-16155]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2022-05696]
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                DEPARTMENT OF LABOR
                Office of Federal Contract Compliance Programs
                41 CFR Parts 60-1, 60-2, 60-4, 60-20, 60-30, 60-40, 60-50, 60-300,
                and 60-741
                RIN 1250-AA14
                Pre-Enforcement Notice and Conciliation Procedures
                AGENCY: Office of Federal Contract Compliance Programs, Labor.
                ACTION: Notice of proposed rulemaking; request for comments.
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                SUMMARY: To promote the efficient and effective enforcement of laws and
                regulations applicable to Federal contractors and subcontractors, the
                Office of Federal Contract Compliance Programs (OFCCP) proposes to
                modify regulations that delineate procedures and standards the agency
                follows when issuing pre-enforcement notices and securing compliance
                through conciliation. This proposal would support OFCCP in fulfilling
                its mission to ensure equal employment opportunity.
                DATES: To be assured of consideration, comments must be received on or
                before April 21, 2022.
                ADDRESSES: You may submit comments, identified by Regulation Identifier
                Number (RIN) 1250-AA14, by any of the following methods:
                 Federal eRulemaking Portal: http://www.regulations.gov.
                Follow the instructions for submitting comments.
                 Fax: (202) 693-1304 (for comments of six pages or less).
                 Mail: Tina T. Williams, Director, Division of Policy and
                Program Development, OFCCP, Room C-3325, 200 Constitution Avenue NW,
                Washington, DC 20210.
                 Instructions: Please submit only one copy of your comments by only
                one method. Commenters submitting file attachments on http://www.regulations.gov are advised that uploading text-recognized
                documents, i.e., documents in a native file format or documents that
                have undergone optical character recognition (OCR), enable staff at the
                Department to more easily search and retrieve specific content included
                in your comment for consideration. Please be advised that comments
                received will become a matter of public record and will be posted
                without change to http://www.regulations.gov, including any personal
                information provided. Commenters submitting comments by mail should
                transmit comments early to ensure timely receipt prior to the close of
                the comment period, as the Department continues to experience delays in
                the receipt of mail.
                 Docket: For access to the docket to read background documents or
                comments, go to the Federal eRulemaking Portal at http://www.regulations.gov. Copies of this notice of proposed rulemaking will
                be made available, upon request, in the following formats: Large print,
                Braille, audiotape, and disc. To obtain this notice of proposed
                rulemaking in an alternate format, contact OFCCP at the telephone
                numbers or address listed below.
                FOR FURTHER INFORMATION CONTACT: Tina T. Williams, Director, Division
                of Policy and Program Development, OFCCP, 200 Constitution Avenue NW,
                Room C-3325, Washington, DC 20210. Telephone: (202) 693-0103.
                SUPPLEMENTARY INFORMATION:
                [[Page 16139]]
                Overview
                 OFCCP administers and enforces Executive Order 11246, as amended
                (E.O. 11246); Section 503 of the Rehabilitation Act of 1973, as
                amended, 29 U.S.C. 793 (Section 503); and the Vietnam Era Veterans'
                Readjustment Assistance Act of 1974, as amended, 38 U.S.C. 4212
                (VEVRAA); and their implementing regulations, 41 CFR chapter 60.
                Collectively, these laws require Federal contractors and subcontractors
                \1\ to take affirmative action to ensure equal employment opportunity,
                and not discriminate on the basis of race, color, religion, sex, sexual
                orientation, gender identity, national origin, disability, or status as
                a protected veteran. Additionally, E.O. 11246 prohibits a contractor
                from discharging or otherwise discriminating against applicants or
                employees who inquire about, discuss, or disclose their compensation or
                that of others, subject to certain limitations.
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                 \1\ Hereinafter, the term ``contractor'' is used to refer
                collectively to Federal contractors and subcontractors that fall
                under OFCCP's authority, unless otherwise expressly stated. This
                approach is consistent with OFCCP's regulations, which define
                ``contract'' to include subcontracts and ``contractor'' to include
                subcontractors.
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                 In November 2020, OFCCP published a final rule, ``Nondiscrimination
                Obligations of Federal Contractors and Subcontractors: Procedures to
                Resolve Potential Employment Discrimination'' (the ``2020 rule''),\2\
                amending its regulations to codify the required use of two notification
                procedures, the Predetermination Notice and the Notice of Violation.
                The 2020 rule requires OFCCP to issue a Predetermination Notice that
                provides contractors with an initial written notice of preliminary
                indicators of discrimination and requests that contractors respond. If
                after providing contractors an opportunity to respond, OFCCP finds a
                violation of an equal opportunity clause,\3\ OFCCP will issue a Notice
                of Violation to the contractor requiring corrective action and inviting
                conciliation through a written agreement. The contractor then has an
                additional opportunity to respond and resolve the matter. Where OFCCP
                and the contractor have been unable to resolve these findings, and
                OFCCP has reasonable cause to believe that a contractor has violated an
                equal opportunity clause, the Director may issue a Show Cause Notice
                requiring the contractor to show cause for why monitoring, enforcement
                proceedings, or other appropriate action to ensure compliance should
                not be instituted. The 2020 rule also provided for an early
                conciliation option for contractors that wish to bypass these notice
                procedures and resolve preliminary indicators of discrimination
                directly through a conciliation agreement.
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                 \2\ Nondiscrimination Obligations of Federal Contractors and
                Subcontractors: Procedures to Resolve Potential Employment
                Discrimination, 85 FR 71553 (Nov. 10, 2020). The final rule, which
                took effect on December 10, 2020, was published after OFCCP
                considered comments it received on a notice of proposed rulemaking,
                Nondiscrimination Obligations of Federal Contractors and
                Subcontractors: Procedures To Resolve Potential Employment
                Discrimination, 84 FR 71875 (Dec. 30, 2019).
                 \3\ See 41 CFR 60-1.4, 60-4.3, 60-300.5, 60-741.5.
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                 In addition to requiring the use of the Predetermination Notice and
                Notice of Violation, the 2020 rule established enforcement standards
                that, as explained in the preamble to the final rule, were not
                ``compelled. . . by [Title VII of the Civil Rights Act of 1964] and
                OFCCP case law'' but rather were promulgated ``as an exercise of
                [OFCCP's] enforcement discretion to focus OFCCP's resources on those
                cases with the strongest evidence,'' ``increase the number of
                contractors the agency evaluates,'' and to provide ``guardrails on the
                agency's issuance of pre-enforcement notices.'' \4\
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                 \4\ 85 FR 71553, 71554.
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                 Upon further review and assessment of the impact of the 2020 rule
                on OFCCP enforcement, OFCCP believes that the 2020 rule's inflexible
                evidentiary requirements mandate overly particularized and confusing
                evidentiary definitions that impede OFCCP's ability to tailor the pre-
                enforcement process to the specific facts and circumstances of each
                case, delay information exchange with contractors, and create obstacles
                to remedying discrimination. The 2020 rule's rigid requirements for
                issuing a Predetermination Notice and Notice of Violation in some
                instances exceed what courts have required for proof at trial and run
                counter to the general principle that the evidentiary standard pursuant
                to Title VII of the Civil Rights Act of 1964 (``Title VII'') is a
                flexible one dependent on the unique facts at issue. These heightened
                and overly formulaic evidentiary standards are particularly unsuitable
                at the Predetermination Notice stage of a compliance evaluation, where
                OFCCP provides contractors with preliminary notice of indicators of
                discrimination so that contractors may provide a response to clarify
                and resolve areas of dispute.
                 In addition, mandating the same heightened and inflexible
                evidentiary requirements for both the Predetermination Notice and the
                Notice of Violation creates inefficient and duplicative processes,
                which hinders OFCCP's ability to provide contractors with early
                notification of indicators of discrimination found by the agency.
                Moreover, the 2020 rule attempted to codify complex evidentiary issues,
                many of which are inherently open to debate, thus encouraging
                contractors to raise collateral challenges to OFCCP's pre-enforcement
                notice procedures, rather than providing a substantive response to the
                indicators and findings of discrimination.
                 Further, the 2020 rule requires that OFCCP disclose to the
                contractor at the pre-enforcement stage the quantitative and
                qualitative evidence relied upon by OFCCP to support indicators or
                findings of discriminatory intent ``in sufficient detail to allow
                contractors to investigate allegations and meaningfully respond.'' \5\
                While the 2020 rule provided that OFCCP may withhold personally
                identifiable information in certain circumstances, the disclosure of
                qualitative evidence creates a risk that an employer will uncover
                identities of those who experience or report discrimination at this
                investigatory stage of the proceeding, which may have a chilling effect
                on the willingness of victims and witnesses to participate in OFCCP's
                investigation and also potentially lead to retaliation against those
                who report discrimination. Upon careful consideration, OFCCP believes
                that the 2020 regulations negatively impact America's workers by
                delaying the resolution of discrimination findings and constraining
                OFCCP's ability to effectively enforce the full scope of the
                protections that the President and Congress have entrusted to the
                agency.
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                 \5\ The 2020 rule also requires OFCCP to demonstrate that the
                unexplained disparity is practically significant and, for disparate
                impact cases, OFCCP must identify the specific policy or practice of
                the contractor causing the adverse impact, unless OFCCP can
                demonstrate that the elements of the contractor's selection
                procedures are incapable of separation for analysis. See 41 CFR 60-
                1.33.
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                 In this rulemaking, OFCCP proposes to modify the 2020 rule to
                rescind the rigid evidentiary standards and definitions, while
                retaining and refining the required pre-enforcement procedures for
                issuing the Predetermination Notice and the Notice of Violation.
                OFCCP's regulations have included use of the Show Cause Notice since
                the agency's inception.\6\ This proposal will clarify OFCCP's use of
                the Predetermination Notice and the Notice of Violation as pre-
                enforcement procedures, similar to the Show Cause Notice regulation,
                which has never
                [[Page 16140]]
                included the specific type of evidentiary standards the 2020 rule
                introduced. The proposed modifications would allow OFCCP to tailor the
                pre-enforcement process to the specific facts and circumstances of each
                case, consistent with judicial interpretations of the applicable legal
                authorities, which will in turn allow OFCCP to more effectively redress
                unlawful discrimination.
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                 \6\ 41 CFR 60-1.28; see also Compliance Responsibility for Equal
                Employment Opportunity, 43 FR 49240, 49247 (Oct. 20, 1978); Revision
                of Chapter, 33 FR 7804, 7810 (May 28, 1968).
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                 In addition, to promote greater efficiency in resolving cases,
                OFCCP proposes to modify the 2020 rule's provision that required a
                contractor to provide a response within 30 calendar days of receiving a
                Predetermination Notice.\7\ The proposal returns the Predetermination
                Notice response period to the 15 calendar day period in effect prior to
                the 2020 rule (which OFCCP may extend for good cause).\8\ In the
                proposal, OFCCP also clarifies this provision to state that any
                response must be received by OFCCP within 15 calendar days (absent a
                deadline extension).
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                 \7\ 85 FR 71553, 71571-71574, codified at 41 CFR 60-1.33(a)(5),
                60-300.62(a)(5), 60-741.62(a)(5).
                 \8\ See Directive 2018-01, Use of Predetermination Notices (Feb.
                27, 2018), available at https://www.dol.gov/agencies/ofccp/directives/2018-01 (last accessed Dec. 5, 2021).
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                 OFCCP also proposes to retain the regulatory language regarding
                early resolution, which provides that contractors may waive these
                notice procedures if they enter directly into a conciliation agreement.
                Finally, the proposal would delete the severability clause that applied
                just to certain sections of OFCCP's regulations and replace it with
                severability clauses covering the entirety of each part of OFCCP's
                regulatory scheme.
                 The 2020 final rule was the first time OFCCP sought to codify the
                specific forms of evidence that the agency must rely upon during its
                pre-enforcement process. Through this proposal, OFCCP would promote
                consistency by codifying the required use of the Predetermination
                Notice and Notice of Violation when the agency identifies preliminary
                indicators or findings of discrimination, while allowing the agency the
                flexibility to issue appropriate guidance to field staff on the use of
                the procedures. OFCCP would continue to ensure transparency by sharing
                this guidance with the public.
                 This proposed rulemaking aims to create a streamlined, efficient,
                and flexible pre-enforcement and conciliation process to ensure OFCCP
                utilizes its resources strategically to advance the agency's mission
                through effective enforcement. OFCCP remains committed to providing
                contractors notice when the agency sees preliminary indicators of
                discrimination during a compliance evaluation, as such notice is
                mutually beneficial for OFCCP and the contractor under review because
                it provides the contractor an opportunity to respond and work to
                resolve the issues.
                Purpose of the 2020 Rule
                 In its 2020 final rule, OFCCP stated an intent to increase clarity
                and transparency for Federal contractors, establish clear parameters
                for OFCCP enforcement proceedings, and enhance the efficient
                enforcement of the law. The 2020 rule identified two primary
                objectives: (1) Increase the number of contractors the agency evaluates
                and (2) focus on resolving stronger cases through the strategic
                allocation of limited agency resources.\9\ As detailed further below in
                this proposed rulemaking, OFCCP reconsidered the 2020 rule and assessed
                its impact on OFCCP enforcement processes and has found that the 2020
                rule's formulaic and inflexible evidentiary standards for pre-
                enforcement notices neither assist the agency in strategically
                allocating its limited resources nor enable the agency to evaluate more
                contractors. Instead, the 2020 rule's evidentiary mandates diminish
                OFCCP's ability to provide contractors with early notification of
                indicators of discrimination and unnecessarily divert agency and
                contractor resources away from addressing discrimination by spawning
                time-consuming collateral disputes about the implementation of these
                heightened evidentiary standards. This decreases rather than increases
                the number of contractors that OFCCP can evaluate for compliance with
                equal opportunity laws. OFCCP thus proposes to modify the 2020 rule to
                ensure that OFCCP utilizes its resources strategically to provide
                contractors with an early opportunity to understand and resolve
                indicators or findings of discrimination and to enable the agency to
                protect America's workers by enforcing the full scope of the equal
                opportunity authorities with which it has been entrusted.
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                 \9\ 85 FR 71553, 71554.
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                Pre-Enforcement Notices
                 Historically, OFCCP has issued pre-enforcement notices in
                compliance evaluations (i.e., the Predetermination Notice, Notice of
                Violation, and Show Cause Notice) when the agency is seeking to remedy
                findings of discrimination.\10\ Prior to 2018, the use of the
                Predetermination Notice varied by region and by the type of case. In
                2018, OFCCP issued a directive, requiring the consistent issuance of
                Predetermination Notices for preliminary discrimination findings
                identified during the course of compliance evaluations.\11\
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                 \10\ The notices are used at different pre-enforcement stages.
                See FCCM, Chapter 8, Resolution of Noncompliance (last updated Jan.
                7, 2021), available at https://www.dol.gov/agencies/ofccp/manual/fccm/chapter-8-resolution-noncompliance (last accessed Dec. 3,
                2021). OFCCP also uses the Notice of Violation and Show Cause Notice
                to identify other types of potential violations of law, such as
                denial of access or other types of nondiscrimination violations like
                recordkeeping deficiencies.
                 \11\ See Directive 2018-01, Use of Predetermination Notices
                (Feb. 27, 2018), available at https://www.dol.gov/agencies/ofccp/directives/2018-01 (last accessed Dec. 5, 2021).
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                 A stated goal of the 2020 rule was to provide contractors with
                greater certainty by codifying the historical, then-existing procedures
                for issuing the Predetermination Notice and the Notice of
                Violation.\12\ The preamble to the 2020 rule stated that the
                Predetermination Notice is intended to encourage communication with
                contractors and provide them an opportunity to respond to preliminary
                indicators of discrimination prior to OFCCP deciding to issue a Notice
                of Violation. As set forth in the 2020 rule, if the contractor did not
                respond to the Predetermination Notice or sufficiently rebut the
                preliminary indicators in the Predetermination Notice, OFCCP would
                issue the Notice of Violation to inform the contractor that the agency
                found violations of one or more of the laws it enforces. The Notice of
                Violation also informed the contractor that corrective action would be
                required and invited conciliation through a written agreement.\13\
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                 \12\ See 84 FR 71875. Show Cause Notices were already codified
                in OFCCP's regulations prior to the 2020 rule, at 41 CFR 60-1.28,
                60-300.64, 60-741.64.
                 \13\ Conciliation agreements were also already codified in
                OFCCP's regulations prior to the 2020 rule, at 41 CFR 60-1.33, 60-
                300.62, and 60-741.62--the same sections that the 2020 rule amended
                to include the Predetermination Notice, the Notice of Violation, the
                early conciliation option, and a severability clause specific only
                to that section.
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                 Rather than simply codify OFCCP's then-existing procedures for
                issuing the Predetermination Notice and Notice of Violation, the 2020
                rule instead exercised the agency's enforcement discretion to adopt
                rigid standards that the agency had not historically followed for
                issuing these two notices, necessitating that OFCCP alter the content
                of the Predetermination Notice and Notice of Violation from what had
                previously been included in the notices. As detailed further below,
                this rulemaking proposes to retain the
                [[Page 16141]]
                agency's consistent use of the two pre-enforcement notices while
                rescinding the 2020 rule's rigid evidentiary mandates.
                 Prior to the issuance of the 2020 final rule, OFCCP had issued
                subregulatory guidance and internal procedures on the use of the
                Predetermination Notice, as well as the Notice of Violation, through
                the Federal Contract Compliance Manual (FCCM) and agency directives.
                The agency has utilized this guidance to promote transparency and
                consistency, while ensuring the agency has the flexibility to update
                these guidance documents to improve procedures and align with OFCCP's
                strategic enforcement measures. The 2020 rule also codified a new pre-
                enforcement procedure available for OFCCP and contractors to expedite
                conciliation by bypassing the Predetermination Notice and Notice of
                Violation procedures and entering directly into a conciliation
                agreement. In this rulemaking, OFCCP retains this expedited
                conciliation process and only proposes changes to that subsection of
                the 2020 rule to clarify the agency's role in pursuing the expedited
                conciliation option.
                Evidentiary Standards
                 The 2020 rule codified evidentiary standards that OFCCP must meet
                in order to issue a Predetermination Notice and a Notice of Violation.
                Under the 2020 rule, OFCCP's authority to issue a Predetermination
                Notice or Notice of Violation for discrimination cases is limited to
                those situations where OFCCP demonstrates that it has specific forms of
                evidence conforming to the regulatory thresholds requiring quantitative
                (i.e., statistical or other numerical) evidence, practical
                significance, and qualitative evidence of discrimination.\14\ The 2020
                rule differentiates the procedures followed for disparate treatment and
                disparate impact theories of discrimination and provides the
                evidentiary standards OFCCP must meet to issue pre-enforcement notices
                under each legal theory.\15\ The 2020 rule mandates that, upon the
                contractor's request, OFCCP must provide the model and variables used
                in the agency's statistical analysis and an explanation for any
                variable that was excluded from the statistical analysis. The 2020 rule
                also requires OFCCP to explain in detail the basis for its findings in
                pre-enforcement notices.\16\ For the reasons discussed below, this
                rulemaking proposes to rescind these formal evidentiary standards and
                disclosure requirements in the 2020 rule.
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                 \14\ 85 FR 71553, 71562-71565.
                 \15\ For all cases proceeding under a disparate treatment
                theory, subject to certain enumerated exceptions, the 2020 rule
                establishes that OFCCP is required to provide qualitative evidence
                supporting a finding of discriminatory intent. For all cases
                proceeding under a disparate impact theory, the 2020 rule requires
                OFCCP to identify the policy or practice of the contractor causing
                the adverse impact with factual support demonstrating why such
                policy or practice has a discriminatory effect. 85 FR 71553, 71562-
                71565.
                 \16\ 85 FR 71553, 71562.
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                Definitions
                 Finally, the 2020 rule added definitions for ``quantitative
                evidence'' and ``qualitative evidence'' to OFCCP's regulations
                purporting to add greater clarity and certainty as to the types of
                evidence the agency uses to support the issuance of pre-enforcement
                notices.\17\ The term ``qualitative evidence'' is defined to include
                the various types of documents, testimony, and interview statements
                that OFCCP collects during its compliance evaluations relevant to a
                finding of discrimination, and clarified the purposes for which it will
                be used. The term ``quantitative evidence'' establishes the support
                needed for OFCCP to determine that there is a statistically significant
                disparity in a contractor's employment selection or compensation
                outcomes affecting a group protected under OFCCP's laws. The definition
                sets a standard for what OFCCP considers statistically significant.\18\
                The definition also includes quantitative analyses, such as cohort
                analyses, which are comparisons of similarly situated individuals or
                small groups of applicants or employees that are numerical in nature
                but do not use hypothesis testing techniques. Pursuant to the 2020
                rule, the term ``qualitative evidence'' gives an affirmative,
                descriptive label to the types of evidence that fall into that category
                while the term ``quantitative evidence'' better encapsulates OFCCP's
                analytical evidence given the agency's use of descriptive statistics
                and non-parametric and cohort analyses, in addition to a variety of
                statistical tests based on hypothesis testing.\19\ OFCCP declined to
                add a specific definition for practical significance in the 2020 rule
                because it concluded there is not a settled definition in relevant
                academic literature and a variety of measures may be appropriate to use
                in any given case, instead describing the common types of practical
                significance measures and explaining the metrics the agency would
                customarily use.\20\ In this proposed rulemaking, OFCCP proposes to
                eliminate the definitions for the reasons discussed below.
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                 \17\ 85 FR 71553, 71555. The definitions are now codified at 41
                CFR 60-1.3, 60-300.2(t)-(u), and 60-741.2(s)-(t).
                 \18\ The definition of quantitative evidence includes this
                standard for statistical significance: ``. . . a disparity in
                employment selection rates or rates of compensation is statistically
                significant by reference to any one of these statements: (1) The
                disparity is two or more times larger than its standard error (i.e.,
                a standard deviation of two or more); (2) The Z statistic has a
                value greater than two; or (3) The probability value is less than
                0.05. It also includes numerical analysis of similarly situated
                individuals, small groups, or other characteristics, demographics or
                outcomes where hypothesis-testing techniques are not used.'' 41 CFR
                60-1.3, 60-300.2(t)-(u), 60-741.2(s)-(t); see also 85 FR 71553,
                71571-71574.
                 \19\ 85 FR 71553, 71556.
                 \20\ Id. at 71559-71560.
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                Modifications To Promote Effective Enforcement
                Rescinding Evidentiary Standards Codified by the 2020 Rule
                 The 2020 rule codifies specific evidentiary standards that OFCCP
                must meet in order to issue a Predetermination Notice and a Notice of
                Violation. The preamble to the 2020 rule concedes, however, that these
                standards, applicable to both the Predetermination Notice and the
                Notice of Violation, are not compelled by Title VII or OFCCP case law.
                Indeed, as discussed below, the 2020 rule places certain obligations on
                OFCCP that go beyond what is required by E.O. 11246 to state or prove a
                claim of discrimination or by Title VII for proof of discrimination
                after the completion of the discovery process upon a full evidentiary
                record in litigation.
                 The pre-enforcement notice process is intended to place the
                employer on notice of OFCCP's concerns of discrimination. The
                information available to OFCCP during the pre-enforcement notice stage
                of a compliance evaluation is necessarily limited compared to a full
                evidentiary record available to support proof of a violation at trial.
                Thus, imposing proof standards for the agency's initial pre-enforcement
                proceedings that essentially require the agency to be trial ready--and,
                as discussed in more detail below, are even more onerous than are
                required in court to prove a violation under Title VII--is incompatible
                with the investigatory stage of a compliance evaluation.\21\ As set
                forth in OFCCP's
                [[Page 16142]]
                longstanding regulations in effect since OFCCP's inception, the agency
                will issue a Show Cause Notice to proceed with an enforcement action
                where it has reasonable cause to believe discrimination occurred based
                on the information available through its investigation.\22\ This means
                that, based upon the evidence obtained in the investigation, the agency
                believes discrimination did occur.\23\ This does not require developing
                a full evidentiary record to support proof at trial, but rather
                providing notice of the agency's findings supporting its belief that
                violations occurred and giving the contractor the opportunity to show
                why agency action to ensure compliance should not be instituted.\24\
                Thus, even this final stage in the pre-enforcement process does not
                impose specific evidentiary regulations or trial-level proof prior to
                the institution of an enforcement action.
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                 \21\ See OFCCP v. Oracle, 2017-OFC-00006, 19 (Order Denying
                Cross Motions for Summary Judgment Granting in Part Defendant's
                Alternative Motion for Partial Summary Judgment & Order for
                Additional Briefing on Show Cause Notice & Conciliation, Nov. 25,
                2019) (```Reasonable cause' is something that the [Director of
                OFCCP] is given the discretion to determine[.]''); see also OFCCP v.
                Oracle, 2017-OFC-00006, 8 (Order Granting OFCCP Summary Judgment as
                to Oracle's Affirmative Defenses Related to the Show Cause Notice &
                Conciliation, Dec. 3, 2019) (denying Oracle's argument that if OFCCP
                did not meet the reasonable cause standard for issuing the show
                cause notice, then all of the evidence gathered was gathered in
                violation of the Fourth Amendment stating ``[this argument] presumes
                that the Show Cause Notice has a much more important place than can
                be fairly read into the regulatory scheme'').
                 \22\ 41 CFR 60-1.28, 60-300.64, 60-741.64.
                 \23\ See, e.g., 42 U.S.C. 2000e-5(b); cf. OFCCP v. Honeywell,
                77-OFC-3, 8-9 (Sec'y of Labor Dec. & Order on Mediation, June 2,
                1993) (comparing the show cause procedure to the reasonable cause
                determination made by the Equal Employment Opportunity Commission
                (EEOC), the ALJ found that the government letter explaining the
                deficiencies found and recommended remedial actions was comparable
                to a reasonable cause determination); U.S. Equal Employment
                Opportunity Commission, ``Definition of Terms,'' available at
                https://www.eeoc.gov/statistics/definitions-terms (last visited Nov.
                8, 2021).
                 \24\ 41 CFR 60-1.28, 60-300.64, 60-741.64; cf EEOC v. Keco
                Indus., Inc., 748 F.2d 1097, 1100 (6th Cir. 1984) (EEOC's cause
                determination ``does not adjudicate rights and liabilities; it
                merely places the defendant on notice of the charges'') (citing EEOC
                v. E.I. Dupont de Nemours & Co., 373 F. Supp. 1321, 1338 (D. Del.
                1974)).
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                 The Predetermination Notice is the initial written notice in a
                multi-stage notification and information exchange process provided to
                contractors to promote a mutual understanding of the issues and
                facilitate voluntary resolution. Prior to the 2020 regulation, the
                Predetermination Notice served to foster communication with contractors
                about preliminary indicators of discrimination, providing the
                contractor with an early opportunity to understand and respond to
                OFCCP's preliminary findings. This process enables the sharing of
                additional information that may assist OFCCP in resolving the
                preliminary findings or conducting a more refined analysis of the data
                before determining whether to issue a Notice of Violation.
                 In order to issue a Predetermination Notice under the 2020 rule,
                OFCCP must meet the same evidentiary standards as required to issue a
                Notice of Violation. As a result, the 2020 rule has created
                inefficiencies and delay in OFCCP's pre-enforcement process. In
                addition, the 2020 rule has in certain respects created higher
                evidentiary requirements for E.O. 11246 matters than Title VII matters,
                which unduly circumscribes OFCCP's ability to prosecute discriminatory
                practices and is contrary to the approach generally followed by OFCCP
                and recognized in relevant case law.\25\
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                 \25\ Cf. OFCCP v. Greenwood Mills, Inc., Nos. 00-044, 01-089,
                2002 WL 31932547, at *4 (ARB Final Decision & Order Dec. 20, 2002)
                (``The legal standards developed under Title VII of the Civil Rights
                Act of 1964 apply to cases brought under [E.O. 11246].'').
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                 While the 2020 rule purported to ``focus OFCCP's resources on those
                cases with the strongest evidence,'' \26\ upon further reconsideration
                OFCCP believes the rule hindered the agency's ability to focus on those
                cases with the strongest evidence by adopting a formulaic approach to
                evidentiary standards rather than viewing the strength of the evidence
                in light of the particular facts and circumstances at issue in each
                case. OFCCP has concluded that rigid evidentiary standards are
                unnecessary and unduly constrain the agency's broad enforcement
                discretion as to the cases it decides to litigate and those it does
                not.\27\ OFCCP has been diligent in managing its limited resources for
                decades to focus on the strongest cases without the need for blanket
                evidentiary standards. To promote more effective enforcement, OFCCP
                proposes to return to its long-standing practice of focusing agency
                resources without imposing blanket evidentiary standards, pursuing
                those cases supported by strong evidence tailored to the facts of each
                case. Further, OFCCP believes that the 2020 rule has failed to meet its
                objectives of providing clarity and promoting efficiency. As described
                in more detail below, these strict evidentiary standards have instead
                led to delays in resolutions by increasing disagreements between OFCCP
                and contractors about the requirements for Predetermination Notices.
                ---------------------------------------------------------------------------
                 \26\ 85 FR 71553, 7155.
                 \27\ See generally Heckler v. Chaney, 470 U.S. 821 (1985);
                Andrews v. Consolidated Rail Corporation, 831 F.2d 678, 684 (3rd
                Cir. 1987) (applying Chaney to OFCCP decision to decline enforcement
                under Section 503); Clementson v. Brock, 806 F.2d 1402, 1404 (9th
                Cir. 1986) (applying Chaney to OFCCP decision to decline enforcement
                under VEVRAA).
                ---------------------------------------------------------------------------
                 With this proposal, OFCCP would apply Title VII standards to the
                facts and circumstances of each compliance evaluation to provide
                contractors with notice of the nature of OFCCP's concerns.\28\ OFCCP
                proposes to adopt this approach to advance a policy of promoting
                consistency between Title VII and E.O. 11246 and to remove unnecessary
                constraints on the agency's ability to pursue meritorious cases. Taking
                this approach will help OFCCP advance the overriding policy goal of
                promoting nondiscrimination by strengthening the enforcement of federal
                protections under E.O. 11246. OFCCP also would promote transparency and
                consistency by continuing to codify the required use of the
                Predetermination Notice when the agency identifies preliminary
                indicators of discrimination.
                ---------------------------------------------------------------------------
                 \28\ Similarly, for claims related to disability discrimination,
                OFCCP would continue to apply the nondiscrimination standards of the
                Americans with Disabilities Act of 1990 (ADA), as amended, to
                compliance evaluations pertaining to Section 503. See, e.g., 41 CFR
                60-741.1(c)(1), 60-742.4.
                ---------------------------------------------------------------------------
                1. ``Quantitative'' and ``Qualitative'' Evidence
                 The 2020 rule requires that OFCCP, with only narrow exceptions,
                provide both ``quantitative'' and ``qualitative'' evidence before
                issuing a Predetermination Notice or a Notice of Violation, and
                provides definitions for what constitutes ``quantitative'' and
                ``qualitative'' evidence.\29\ These provisions of the 2020 rule depart
                from traditional Title VII standards in two respects. First, Title VII
                does not prescribe the different and specific forms of evidence
                described in the 2020 rule in order to establish a prima facie case of
                discrimination, much less investigatory findings of violation.\30\
                Interpretive Title VII case law demonstrates that there are multiple
                ways to establish a prima facie case of discrimination, including
                through statistical evidence alone, as long as the
                [[Page 16143]]
                plaintiff ultimately satisfies its burden of proof.\31\
                ---------------------------------------------------------------------------
                 \29\ The 2020 rule definitions are codified at 41 CFR 60-1.3,
                60-300.2(t)-(u), 60-741.2(s)-(t).
                 \30\ See Int'l Bhd. of Teamsters v. United States, 431 U.S. 324,
                358 (1977) (``[T]he facts necessarily will vary in Title VII cases,
                and the specification . . . of the prima facie proof required from
                (a plaintiff) is not necessarily applicable in every respect to
                differing factual situations.'' (alterations omitted) (quoting
                McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 n. 13(1973));
                Adams v. Ameritech Servs., Inc., 231 F.3d 414, 425 (7th Cir. 2000)
                (``No one piece of evidence has to prove every element of the
                plaintiff's case[.]'') (internal citations omitted); Anderson v.
                Douglas & Lomason Co., Inc., 26 F.3d 1277, 1285 (5th Cir. 1994)
                (``If statistical evidence is insufficient to establish
                discriminatory intent, the plaintiffs may bolster their case by
                introducing historical, individual, or circumstantial evidence.'')
                (citing Bernard v. Gulf Oil Corp., 841 F.2d 547, 568 (5th Cir.
                1988)).
                 \31\ See Bazemore v. Friday, 478 U.S. 385, 400 (1986) (``Whether
                . . . [statistics] . . . carry the plaintiffs' ultimate burden will
                depend in a given case on the factual context of each case in light
                of all the evidence presented by both the plaintiff and the
                defendant.''); Int'l Bhd. of Teamsters, 431 U.S. at 339 (finding
                that statistics may be used to establish a prima facie case, but
                cautioning that the ``usefulness [of statistics] depends on all of
                the surrounding facts and circumstances'') (internal citations
                omitted); see also Isabel v. City of Memphis, 404 F.3d 404, 412 (6th
                Cir. 2005) (``[W]hen the Supreme Court stated that a plaintiff may
                rely solely on statistical evidence to establish a prima facie case
                of disparate impact . . . it did not say what kind of statistical
                evidence should be relied on. Neither the Supreme Court nor this
                Court has ever limited a plaintiff's choices in Title VII cases
                involving statistical analysis in any way.'') (citing Wards Cove
                Packing Co. v. Atonio, 490 U.S. 642, 656-57 (1989)).
                ---------------------------------------------------------------------------
                 As the U.S. Supreme Court and lower courts have long recognized,
                Title VII requires a case-by-case evaluation of the facts and
                circumstances.\32\ There is no one-size-fits-all blanket formula for
                establishing discrimination. Yet, the 2020 rule circumscribes OFCCP's
                authority to pursue only those cases that meet bright line statistical
                thresholds or rely on specific types of evidence. To be sure, OFCCP
                recognizes the utility of anecdotal evidence in support of
                discrimination cases generally and will continue to make efforts to
                gather such evidence during its compliance evaluations.\33\ However, to
                require as a baseline rule that the agency proffer evidence falling
                within multiple and different categories regardless of the factual
                circumstances of a case--especially at the investigative stage--goes
                beyond well-established Title VII principles. In addition, a number of
                the regulatory requirements impose a standard that is inherently fact
                specific, open to dispute, and ultimately unnecessary to adjudicate at
                this initial stage of the proceeding, including the requirement that
                OFCCP provide ``qualitative evidence supporting a finding of
                discriminatory intent for all cases proceeding under a disparate
                treatment theory'' (emphasis added), subject to certain enumerated
                exceptions. Such disputes created protracted delays in remedying
                violations of the law. Moreover, the 2020 rule requires that OFCCP
                disclose to the contractor at this preliminary stage the quantitative
                and qualitative evidence relied upon by OFCCP to support findings of
                discriminatory intent ``in sufficient detail to allow contractors to
                investigate allegations and meaningfully respond.'' \34\ Mandating the
                disclosure of anecdotal evidence at this pre-determination stage may
                have a chilling effect on the willingness of victims and witnesses to
                participate in OFCCP's investigation due to concerns that an employer
                may uncover their identities, which could lead to retaliation. The
                preamble to the 2020 rule acknowledges that OFCCP may withhold
                ``personal identifying information from the description of the
                qualitative evidence if the information is protected from disclosure
                under recognized governmental privileges, or if providing that
                information would otherwise violate confidentiality or privacy
                protections afforded by law;'' yet, even in those circumstances where
                OFCCP may withhold an individual's identity, witnesses may remain
                concerned about the employer's ability to ascertain their identity from
                the anecdotal information provided at this pre-determination stage.
                ---------------------------------------------------------------------------
                 \32\ See Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 995
                n.3 (1988) (noting that the Supreme Court has ``not suggested that
                any particular number of `standard deviations' can determine whether
                a plaintiff has made out a prima facie case in the complex area of
                employment discrimination''); Gay v. Waiters' & Dairy Lunchmen's
                Union, Local No. 30, 694 F.2d 531, 551 (9th Cir. 1982) (``It would
                be improper to posit a quantitative threshold above which
                statistical evidence of disparate racial impact is sufficient as a
                matter of law to infer discriminatory intent, and below which it is
                insufficient as a matter of law.'').
                 \33\ See FCCM, Chapter 2E00, Types of Evidence, available at
                https://www.dol.gov/agencies/ofccp/manual/fccm/2e-collecting-information-analysis/2e00-types-evidence (last accessed Dec. 3,
                2021) (explaining that during its compliance evaluations, OFCCP
                seeks a variety of other types of nonstatistical evidence, including
                anecdotal evidence).
                 \34\ 85 FR 71564.
                ---------------------------------------------------------------------------
                 As such, OFCCP proposes to rescind the 2020 rule requirement to
                provide both ``quantitative'' and ``qualitative'' evidence before
                issuing a Predetermination Notice or Notice of Violation. As described
                above, disputes over this requirement resulted in protracted delays for
                remedying violations. Eliminating this unnecessary, rigid requirement
                allows the agency more flexibility, better ensures prompt resolutions,
                and strengthens its ability to protect workers and enforce the law.
                Eliminating this requirement also allows OFCCP to better align its
                enforcement with Title VII evidentiary standards.
                 Because OFCCP is proposing to rescind this requirement, the
                definitions of ``quantitative evidence'' and ``qualitative evidence''
                included in the 2020 rule to support the evidentiary scheme would no
                longer be necessary. Even when evaluated outside of the 2020 rule's
                evidentiary framework, upon further consideration, OFCCP now believes
                these definitions, and particularly the definition for ``qualitative
                evidence,'' to be confusing, overly particularized, and inconsistent
                with the general principle that the Title VII evidentiary standard is a
                flexible one dependent on the unique facts at issue.\35\ First, the
                2020 rule's definition of ``qualitative evidence'' begins with a series
                of lengthy, highly specific examples that may not be present in many
                systemic discrimination cases. Although the 2020 rule stated that
                qualitative evidence ``includes but is not limited to'' these examples,
                some contractors now assert that OFCCP must present evidence of these
                highly specific examples in its cases, creating delays to OFCCP's pre-
                enforcement conciliation procedures. However, the 2020 rule's first
                example--``biased statements, remarks, attitudes, or acts based upon
                membership in a protected class, particularly when made by a decision
                maker involved in the action under investigation''--includes the sort
                of direct, ``smoking gun'' evidence that, while certainly probative of
                discrimination, is ``rarely found in today's sophisticated employment
                world.'' \36\ The next example--evidence about ``misleading or
                contradictory information'' given by an employer to an employee or
                applicant ``in circumstances suggesting discriminatory treatment''--
                also describes narrow factual scenarios that may not be present in many
                cases, substantially limiting the utility of the definition. The
                ``qualitative evidence'' definition is also overly focused on evidence
                of discriminatory intent in disparate treatment cases. Even though it
                includes one example related to disparate impact cases--evidence
                related to ``the business necessity (or lack thereof) of a challenged
                policy or practice''--that example is problematic because it is: (1) A
                category of evidence that is the employer's burden to demonstrate,
                after the agency establishes a prima facie case; \37\ and (2) not the
                only sort of ``qualitative'' evidence that plaintiffs typically
                introduce or rely upon in the course of a disparate impact case.\38\
                [[Page 16144]]
                Finally, the definition includes ``whether the contractor has otherwise
                complied with its non-discrimination obligations'' as a type of
                permissible qualitative evidence. Upon reconsideration, OFCCP has
                concerns that this provision could easily be misinterpreted to mean
                that when a contractor complies with some of its nondiscrimination
                obligations, it somehow lessens the weight of evidence of noncompliance
                with other nondiscrimination obligations. Accordingly, OFCCP proposes
                to remove the two definitions added in the 2020 rule. OFCCP will
                continue to evaluate its cases in line with well-established Title VII
                evidentiary standards and will continue to provide compliance
                assistance and other guidance materials on these standards as
                appropriate.\39\
                ---------------------------------------------------------------------------
                 \35\ Int'l Bhd. of Teamsters, 431 U.S. at 358.
                 \36\ Thomas v. Eastman Kodak Co., 183 F. 3d 38, 58 n.12 (1st
                Cir. 1999) (citing Hodgens v. Gen. Dynamics Corp., 144 F.3d 151, 171
                n. 13 (1st Cir. 1998)).
                 \37\ 42 U.S.C. 2000e-2(k)(1)(A)(i); see also Ricci v. DeStefano,
                557 U.S. 557, 578 (2009) (``An employer may defend against liability
                [for disparate impact discrimination] by demonstrating that the
                practice is `job-related for the position in question and consistent
                with business necessity.' ''); Wards Cove Packing Co., 490 U.S. at
                659 (``[T]he employer carries the burden of producing evidence of a
                business justification for his employment practice.'').
                 \38\ By way of example, because a plaintiff in disparate impact
                cases must, where possible, identify the particular employment
                practice that is causing the adverse impact, see 42 U.S.C. 2000e-
                2(k)(1)(B)(i), it is commonplace for a plaintiff to introduce
                testimony or interview statements from expert witnesses or company
                officials regarding its selection or compensation system that would
                provide necessary context and help to identify the particular
                employment practice at issue. Similarly, evidence regarding less
                discriminatory alternative employment practices is a common feature
                in disparate impact cases. 42 U.S.C. 2000e-2(k)(1)(A)(ii).
                 \39\ OFCCP applies ADA standards to compliance evaluations
                pertaining to Section 503. See supra at n. 28.
                ---------------------------------------------------------------------------
                2. Practical Significance
                 Practical significance refers to whether an observed disparity in
                employment opportunities or outcomes reflects meaningful harm to the
                disfavored group, focusing on the contextual impact or importance of
                the disparity rather than its likelihood of occurring by chance.\40\
                For allegations included in a Predetermination Notice and Notice of
                Violation, the 2020 rule requires that OFCCP demonstrate practical
                significance, and the preamble includes quantitative ranges for various
                measures indicating whether it is ``likely'' or ``unlikely'' that
                practical significance is present.\41\
                ---------------------------------------------------------------------------
                 \40\ Practical Significance in EEO Analysis Frequently Asked
                Questions, Question #1 (last updated Jan. 15, 2021), available at
                www.dol.gov/agencies/ofccp/faqs/practicalsignificance (last accessed
                Dec. 5. 2021). See also 85 FR 71553, 71559.
                 \41\ 85 FR 71556.
                ---------------------------------------------------------------------------
                 Whether Title VII specifically requires a finding of practical
                significance is an unsettled question. The text of Title VII contains
                no specific requirement that practical significance must be
                demonstrated.\42\ Of the circuit courts that have expressly addressed
                the issue, three have concluded that Title VII does not require a
                showing of practical significance.\43\ For example, in Jones v. City of
                Boston, the First Circuit explicitly held that a plaintiff's failure to
                demonstrate practical significance could not preclude that plaintiff
                from relying on evidence of statistical significance to establish a
                prima facie case of disparate impact.\44\ In doing so, the Court noted
                that the requirements a plaintiff must otherwise meet under Title VII
                ``secure most of the advantages that might be gained'' from a test of
                practical significance.\45\ First, the ``need to show statistical
                significance will eliminate small impacts as fodder for litigation . .
                . because proving that a small impact is statistically significant
                generally requires large samples sizes, which are often unavailable.''
                \46\ Second, the subsequent steps required for a plaintiff to
                successfully recover under Title VII provide an additional safeguard in
                that the employer may rebut the prima facie case.\47\ Similarly, in
                Stagi v. National Railroad Passenger Corp., the Third Circuit
                explicitly declined to require a showing of practical significance, and
                instead required only that the plaintiffs meet the well-established
                thresholds for statistical significance in order to meet their prima
                facie case.\48\
                ---------------------------------------------------------------------------
                 \42\ See Elliot Ko, Big Enough to Matter: Whether Statistical
                Significance or Practical Significance Should Be the Test for Title
                VII Disparate Impact Claims, 101 Minn. L.R. 869, 889 (2016) (``Title
                VII does not require plaintiffs to prove that an employment practice
                had a `large' impact on a protected class. Title VII just requires
                plaintiffs to prove that `a particular employment practice' had a
                disparate impact on a protected class.... Title VII only requires
                proof of a `disparate impact,' not proof of a `very' disparate
                impact that is large enough to warrant societal or moral
                condemnation.'').
                 \43\ Jones v. City of Boston, 752 F.3d 38 (1st Cir. 2014);
                Apsley v. Boeing Co., 691 F.3d 1184 (10th Cir. 2012); Stagi v. Nat'l
                R.R. Passenger Corp., 2010 WL 3273173 (3d Cir. Aug. 16, 2010).
                 \44\ Jones, 752 F.3d at 53.
                 \45\ Id.
                 \46\ Id. (internal citations omitted).
                 \47\ Id. (internal citations omitted).
                 \48\ Stagi, 2010 WL 3273173 at *5 (citing Castaneda v. Partida,
                430 U.S. 482, 496 n.17 (1977)); see also Meditz v. City of Newark,
                658 F.3d 364, 372 (3d Cir. 2011) (using only a measure of
                statistical significance to determine whether plaintiff established
                a prima facie case of disparate impact).
                ---------------------------------------------------------------------------
                 Other circuit courts have considered measures of practical
                significance in determining whether a plaintiff in a disparate impact
                case has satisfied a prima facie case.\49\ These cases have generally
                adopted a holistic approach to the evidence required in a given case
                depending on the facts at issue.\50\ However, unlike with statistical
                significance, courts have not similarly coalesced around uniform
                quantitative measures for what constitutes sufficient practical
                significance. Consequently, the 2020 rule did not specify which measure
                of many available options OFCCP should utilize as a threshold for
                practical significance during its compliance evaluations of selection
                and compensation procedures. As OFCCP has stated in its Frequently
                Asked Questions published even prior to the 2020 rule, the agency
                utilizes a variety of measures for evaluating practical significance as
                appropriate to the employment issue under review and the specific facts
                of each case.\51\
                ---------------------------------------------------------------------------
                 \49\ Brown v. Nucor Corp., 785 F.3d 895, 908, 935 (4th Cir.
                2015); Isabel v. City of Memphis, 404 F.3d 404, 412, 418 (6th Cir.
                2005); Ensley Branch of NAACP v. Seibels, 31 F.3d 1548, 1555 (11th
                Cir. 1994); Waisome v. Port Auth. of N.Y. & N.J., 948 F.2d 1370,
                1376 (2d Cir. 1991); Clady v. County of Los Angeles, 770 F.2d 1421,
                1428-29 (9th Cir. 1985); Fisher v. Procter & Gamble Mfg. Co., 613
                F.2d 527, 545 (5th Cir. 1980).
                 \50\ Ko, supra n. 42, at 881-84.
                 \51\ See Practical Significance in EEO Analysis Frequently Asked
                Questions (last updated Jan. 15, 2021), at https://www.dol.gov/agencies/ofccp/faqs/practical-significance (last accessed Dec. 5,
                2021).
                ---------------------------------------------------------------------------
                 As part of its enforcement discretion, OFCCP has historically
                utilized practical significance measures where appropriate in
                compliance evaluations based on the specific facts of the case without
                the need for regulations. In addition, the particular ranges that were
                discussed in the preamble of the 2020 rule may not be appropriate in
                all cases depending on the other evidence that exists. It also remains
                unsettled whether Title VII requires a finding of practical
                significance, and, if so, what level of practical significance is
                sufficient and appropriate to the process under review. Accordingly,
                OFCCP believes it is not advisable to attempt to regulate the standards
                for practical significance, and proposes to remove the requirement to
                demonstrate practical significance before issuing a Predetermination
                Notice or Notice of Violation. Moving forward, however, OFCCP would
                still consider practical significance measures where appropriate as
                part of a holistic evaluation of the cases it investigates along with
                statistical significance and all other evidence gathered in the course
                of the investigation.
                Addressing Barriers to Enforcement Created by the 2020 Rule
                 OFCCP believes that rescinding the inflexible evidentiary standards
                would also advance OFCCP's policy goal of alleviating duplicative and
                inefficient processes created by the 2020 rule that undermine effective
                enforcement of equal employment opportunity laws. For instance, the
                Predetermination Notice originally served to foster communication with
                contractors about preliminary indicators of discrimination. However, at
                the preliminary stage, these rigid evidentiary standards also invite
                [[Page 16145]]
                additional delay by engendering disputes about the scope of evidence
                contractors must provide and whether OFCCP has satisfied the rule's
                heightened requirements. The 2020 rule's regulatory standards thus
                serve to prevent OFCCP from providing early communication of
                preliminary indicators of discrimination and delays the prompt
                resolution of these preliminary indicators and the exchange of more
                information to perform additional analysis. Pursuant to the 2020 rule,
                to issue the Predetermination Notice, OFCCP must meet the same
                evidentiary standards that the agency must meet to issue a Notice of
                Violation. As a result, the 2020 rule conflates a notice that is
                intended to convey preliminary indicators of discrimination (the
                Predetermination Notice) with a notice intended to inform the
                contractor that corrective action is required and to invite
                conciliation through a written agreement (the Notice of Violation).
                OFCCP believes that conflating these two notices by requiring
                duplicative evidentiary standards unnecessarily consumes resources and
                delays OFCCP's ability to timely raise preliminary indicators of
                discrimination. As the two notices were originally meant to serve
                separate, unique purposes, this rulemaking proposes to restore the
                function of the Predetermination Notice to convey preliminary
                indicators of discrimination and foster the exchange of information and
                communication toward efficient resolution.
                 To retain the Predetermination Notice and distinguish it from the
                Notice of Violation, OFCCP proposes to modify the 2020 rule to enable
                the agency to streamline the compliance evaluation process and issue
                the Predetermination Notice earlier where appropriate. OFCCP will issue
                a Predetermination Notice describing the preliminary indicators of
                discrimination and any other potential violations OFCCP has identified,
                asking the contractor to respond. In some circumstances, this may be
                after the agency has completed the desk audit and prior to the on-site
                review,\52\ while in other cases, depending on the facts and
                circumstances, the agency will issue the Predetermination Notice after
                OFCCP has begun an on-site review and obtained the information
                necessary to identify preliminary indicators of discrimination.
                ---------------------------------------------------------------------------
                 \52\ OFCCP compliance reviews proceed in three stages: Desk
                audit, on-site review, and off-site analysis. See 41 CFR 60-
                1.20(a)(1), 60-300.60(a), 60-741.60(a).
                ---------------------------------------------------------------------------
                 To promote greater efficiency in resolving cases, OFCCP proposes to
                modify the 2020 rule's provision which required a contractor to provide
                a response within 30 calendar days of receiving a Predetermination
                Notice. The proposal will return the Predetermination Notice response
                period to the 15-calendar-day period in effect prior to the 2020 rule
                (which OFCCP may extend for good cause).\53\ In the proposal, OFCCP
                also clarifies this provision to state that any response must be
                received by OFCCP within 15 calendar days (absent a deadline
                extension).
                ---------------------------------------------------------------------------
                 \53\ See Directive 2018-01, Use of Predetermination Notices
                (Feb. 27, 2018), available at https://www.dol.gov/agencies/ofccp/directives/2018-01 (last accessed Dec. 5, 2021).
                ---------------------------------------------------------------------------
                 After OFCCP issues a Predetermination Notice, where the contractor
                does not sufficiently rebut the preliminary indicators of
                discrimination, and OFCCP finds a violation of one or more of its equal
                opportunity clauses,\54\ OFCCP will issue a Notice of Violation to the
                contractor identifying the violations, describing the recommended
                corrective actions, and inviting conciliation through a written
                agreement. OFCCP proposes changes to the Notice of Violation regulation
                similar to the changes proposed for the Predetermination Notice, to
                remove barriers to resolution. For the Notice of Violation regulatory
                provision, the proposed changes make clear that OFCCP can include
                additional violations in a subsequent Show Cause Notice without
                amendment to the Notice of Violation to prevent enforcement delays. The
                proposed changes to the Notice of Violation regulation also clearly
                state that OFCCP will provide contractors an opportunity to conciliate
                additional violations identified in the Show Cause Notice. The proposal
                contains similar changes in the Predetermination Notice provision,
                allowing OFCCP to add additional violations in a subsequent Notice of
                Violation or Show Cause Notice without amending the Predetermination
                Notice. The proposed changes provide that OFCCP may issue a Show Cause
                Notice where OFCCP has reasonable cause to believe that a contractor
                has violated the equal opportunity clause. The proposed changes also
                clarify that the agency may issue a Show Cause Notice without first
                issuing a Predetermination Notice or Notice of Violation when the
                contractor has failed to provide access to its premises for an on-site
                review, or refuses to provide access to witnesses, records, or other
                information.
                ---------------------------------------------------------------------------
                 \54\ 41 CFR 60-1.4, 60-4.3, 60-300.5, 60-741.5.
                ---------------------------------------------------------------------------
                 These proposed changes stem from OFCCP's experience implementing
                the 2020 rule as well as its policy judgment on how OFCCP can
                strengthen enforcement of its requirements and promote consistency with
                Title VII. The 2020 rule stated that key objectives included promoting
                more effective enforcement, increasing the number of contractors that
                the agency evaluates, and increasing fairness for contractors by
                providing more transparency and certainty on the agency's resolution
                procedures.\55\ However, the 2020 rule has not met these objectives.
                The 2020 rule instead resulted in time-consuming disputes with
                contractors over the application of the new requirements. For example,
                upon receipt of the Predetermination Notice, contractors have disputed
                the application of the 2020 rule's evidentiary requirements, causing
                additional delay that diverts resources from the central issue of
                resolving indicators and findings of discrimination. Additionally,
                several contractors have argued that the anecdotal evidence that OFCCP
                shared to support its case failed to meet the ``qualitative evidence''
                definition included in the 2020 rule. Other contractors have argued
                that the qualitative evidence that OFCCP provided was insufficient
                because the agency failed to disclose the identity of the interviewees
                who provided relevant statements at the Predetermination Notice stage.
                Contractors have also disputed whether OFCCP met the required threshold
                for practical significance under the 2020 rule, arguing that the agency
                has failed to meet the threshold or even disagreeing with the 2020
                rule's standard altogether. In each of these cases, the disputes raised
                by contractors have delayed OFCCP's completion of compliance
                evaluations. These delays would not have occurred but for the 2020 rule
                and its rigid evidentiary requirements for a Predetermination Notice
                that are prone to dispute and in some respects go beyond what is
                required for proof of discrimination under Title VII. OFCCP proposes
                modifications to these pre-enforcement notice and conciliation
                procedures to streamline the issuance of these notices by removing
                inefficiency and delay caused by the 2020 rule.
                ---------------------------------------------------------------------------
                 \55\ 85 FR 71553, 71554-71569.
                ---------------------------------------------------------------------------
                Restoring Flexibility to OFCCP's Procedures
                 This proposed rulemaking also seeks to restore flexibility to
                OFCCP's pre-enforcement notice and conciliation
                [[Page 16146]]
                procedures. OFCCP needs flexibility in its investigatory and
                conciliation procedures to effectively resolve employment
                discrimination. In January of 2021, the Equal Employment Opportunity
                Commission (EEOC) published a final rule concerning its conciliation
                procedures.\56\ The U.S. Congress subsequently passed a law \57\ to
                disapprove and annul the EEOC rule, based on concerns similar to those
                underlying this proposed rulemaking, such as the increase in employer
                litigation about the process, the delay of resolution of discrimination
                claims, and mandated disclosures unfairly weighting the process in
                favor of employers and subjecting workers to heightened risk of
                retaliation, as reflected in the Congressional Record.\58\ The
                Congressional Record also includes a statement from President Biden's
                administration \59\ and a letter submitted by the Leadership Conference
                on Civil and Human Rights signed by 24 civil rights organizations.\60\
                The supportive statements and letter all cited to a unanimous decision
                by the Supreme Court in Mach Mining, LLC v. EEOC that described the
                wide latitude that Title VII gives EEOC to conciliate in pursuit of
                voluntary compliance with the law.\61\ EEOC's experience with the
                conciliation process is instructive. Before the Court's decision in
                Mach Mining, employers routinely raised time-consuming challenges to
                whether EEOC satisfied its discretionary conciliation requirements. For
                example, the workers in Mach Mining--women alleged to have been
                excluded from coal mining jobs on the basis of sex--were forced to wait
                nine years after the first charge was filed for relief after years of
                litigation over procedural challenges to the conciliation process.
                EEOC's now-rescinded January 2021 conciliation rulemaking sought to
                codify rigid standards that would enable employers to shift the focus
                away from the core issue of whether discrimination occurred and instead
                attempt to avoid liability by pursuing resource intensive satellite
                proceedings over whether discretionary conciliation processes had been
                satisfied. As stated by Representative Scott in support of overturning
                this EEOC rule, EEOC ``must have discretion to use whatever informal
                means of settlement are appropriate'' instead of applying a rigid
                conciliation process ``across the board, one-size-fits-all, in every
                case of workplace discrimination.'' \62\ This authority to have
                administrative discretion in conciliation was directly granted to EEOC
                by Congress,\63\ confirmed by a unanimous opinion from the U.S. Supreme
                Court,\64\ re-affirmed by Congress through the annulment of EEOC's
                conciliation procedures rule,\65\ and recognized by the current
                President of the United States.\66\
                ---------------------------------------------------------------------------
                 \56\ Update of Commission's Conciliation Procedures, 86 FR 2974
                (Jan. 14, 2021), annulled. Before it was annulled, the rule amended
                the EEOC's procedures governing its conciliation process for charges
                alleging violations of Title VII, the ADA, the Genetic Information
                Nondiscrimination Act, and/or the Age Discrimination in Employment
                Act. The EEOC rule implemented requirements regarding the
                information EEOC must provide in preparation for and during
                conciliation about the factual and legal bases for the Commission's
                position and findings for charges where it has found reasonable
                cause.
                 \57\ President Biden signed the joint resolution of Congress
                into law on June 30, 2021. See Commission's Conciliation Procedures,
                Public Law 117-22, June 30, 2021, 135 Stat 294.
                 \58\ See 167 Cong. Rec. H3110-H3111 (daily ed. June 24, 2021).
                (``[T]he rule incentivizes employers to focus litigation on whether
                the EEOC failed to satisfy the rule's new requirements instead of
                whether the employer engaged in unlawful discrimination'' (statement
                of Rep. Scott); also, the ``. . . [EEOC rule] threatens to delay or
                potentially deny justice for individuals who face workplace
                discrimination'' (statement of Rep. Bonamici).
                 \59\ 167 Cong. Rec. H3110, 3111 (daily ed. June 24, 2021)
                (noting that repealing the conciliation rule would, inter alia,
                remove ``onerous and rigid new procedures;'' nullify ``unnecessary
                and burdensome standards that would likely result in increased
                charge backlogs, and lengthier charge investigation, resolution and
                litigation times;'' give EEOC ``the flexibility to tailor
                settlements to the facts and circumstances of each case;'' and
                ``ensure that justice for workers subject to discrimination is not
                delayed, or potentially denied, due to costly and time-consuming
                collateral litigation'') (Statement of Administration Policy).
                 \60\ 167 Cong. Rec. H3110, 3112 (daily ed. June 24, 2021)
                (``Instead of ensuring that discrimination charges are resolved
                fairly, the EEOC's final rule imposes several new obligations and
                disclosures that: significantly weight the conciliation process in
                favor of employers; delay justice and increase the likelihood of
                harm to working people; divert scarce EEOC staff time and resources
                away from investigating discrimination; and contravene controlling
                U.S. Supreme Court precedent.'') (Letter from the Leadership
                Conference on Civil and Human Rights).
                 \61\ Mach Mining, LLC v. EEOC, 575 U.S. 480, 492 (2015) (``Every
                aspect of Title VII's conciliation provision smacks of flexibility.
                To begin with, the EEOC need only `endeavor' to conciliate a claim,
                without having to devote a set amount of time or resources to that
                project. [42 U.S.C.] Sec. 2000e-5(b). Further, the attempt need not
                involve any specific steps or measures; rather, the Commission may
                use in each case whatever `informal' means of `conference,
                conciliation, and persuasion' it deems appropriate.'').
                 \62\ See 167 Cong. Rec. H3110-H3111 (daily ed. June 24, 2021)
                (statement of Rep. Scott).
                 \63\ 42 U.S.C. 2000e-5(b) (``If the Commission determines after
                such investigation that there is reasonable cause to believe that
                the charge is true, the Commission shall endeavor to eliminate any
                such alleged unlawful employment practice by informal methods of
                conference, conciliation, and persuasion.'').
                 \64\ Mach Mining, LLC, 575 U.S. at 480.
                 \65\ Joint Resolution Providing for congressional disapproval
                under chapter 8 of title 5, United States Code, of the rule
                submitted by the Equal Employment Opportunity Commission relating to
                ``Update of Commission's Conciliation Procedures''. COMMISSION'S
                CONCILIATION PROCEDURES, PL 117-22, June 30, 2021, 135 Stat 294.
                 \66\ 167 Cong. Rec. H3110, 3111 (daily ed. June 24, 2021)
                (Statement of Administration Policy).
                ---------------------------------------------------------------------------
                 OFCCP has similar discretion to conciliate compliance under E.O.
                11246, Section 503, and VEVRAA \67\--to right the wrong of employment
                discrimination. When OFCCP determines that a Federal contractor is
                deficient in its compliance with E.O. 11246, Section 503, or VEVRAA,
                OFCCP must make ``reasonable efforts'' to secure compliance through
                conciliation and persuasion,\68\ under the procedures set forth in
                Chapter 60 of the U.S. Code of Federal Regulations,\69\ the FCCM,\70\
                and subregulatory guidance.\71\ OFCCP views the Title VII flexibility
                principle cited by Congress as similarly vital to OFCCP's work in
                securing compliance with E.O. 11246, Section 503, and VEVRAA. As such,
                OFCCP proposes to clarify that the ``reasonable efforts'' standard it
                must satisfy when attempting to secure compliance with its laws should
                be interpreted consistently with the Title VII language requiring EEOC
                to ``endeavor to eliminate any such alleged unlawful employment
                practice by informal methods of conference, conciliation, and
                persuasion,'' to ensure OFCCP has the same flexibility in the
                administration of its laws as that recognized under Title VII by
                Congress and the U.S. Supreme Court for EEOC.
                ---------------------------------------------------------------------------
                 \67\ 41 CFR 60-1.20(b) (noting that if ``deficiencies are found
                to exist, OFCCP shall make reasonable efforts to secure compliance
                through conciliation and persuasion''). OFCCP has identical
                discretion under VEVRAA and Section 503. See 41 CFR 60-300.60(b),
                60-741.60(b).
                 \68\ See 41 CFR 60-1.20(b), 60-300.60(b), 60-741.60(b).
                 \69\ 41 CFR 60-1.33, 60-300.62, 60-741.62.
                 \70\ See FCCM, Chapter 8, Resolution of Noncompliance, available
                at https://www.dol.gov/agencies/ofccp/manual/fccm/chapter-8-resolution-noncompliance (last accessed Dec. 3, 2021).
                 \71\ See, e.g., Directive 2018-01, Use of Predetermination
                Notices, (Feb. 27, 2018), available at https://www.dol.gov/agencies/ofccp/directives/2018-01 (last accessed Dec. 5, 2021); ``Practical
                Significance in EEO Analysis Frequently Asked Questions'' (last
                updated Jan. 15, 2021), available at https://www.dol.gov/agencies/ofccp/faqs/practical-significance (last accessed Dec. 5, 2021).
                ---------------------------------------------------------------------------
                 The 2020 rule's codification of OFCCP's resolution procedures \72\
                imposes hurdles to the effective exercise of OFCCP's enforcement
                discretion. With this proposed rule, OFCCP seeks to restore the
                flexibility it had prior to December 10, 2020, applying Title VII
                standards to the facts and circumstances of each compliance evaluation,
                while preserving certainty and transparency for Federal contractors by
                requiring the
                [[Page 16147]]
                use of a Predetermination Notice and Notice of Violation.\73\
                ---------------------------------------------------------------------------
                 \72\ 41 CFR 60-1.33, 60-300.62, 60-741.62.
                 \73\ As noted previously, supra at n. 28, OFCCP would continue
                to apply ADA standards to compliance evaluations pertaining to
                Section 503.
                ---------------------------------------------------------------------------
                Statement of Legal Authority
                 Issued in 1965, and amended several times in the intervening years,
                E.O. 11246 has two principal purposes. First, it prohibits covered
                Federal contractors and subcontractors from discriminating against
                employees and applicants because of race, color, religion, sex, sexual
                orientation, gender identity, national origin, or because they inquire
                about, discuss, or disclose their compensation or that of others,
                subject to certain limitations. Second, it requires covered Federal
                contractors and subcontractors to take affirmative action to ensure
                equal employment opportunity.
                 The requirements in E.O. 11246 generally apply to any business or
                organization that (1) holds a single Federal contract, subcontract, or
                federally assisted construction contract in excess of $10,000; (2) has
                Federal contracts or subcontracts that combined total in excess of
                $10,000 in any 12-month period; or (3) holds Government bills of
                lading, serves as a depository of Federal funds, or is an issuing and
                paying agency for U.S. savings bonds and notes in any amount. Supply
                and service contractors with 50 or more employees and a single Federal
                contract or subcontract of $50,000 or more also must develop and
                maintain an affirmative action program that complies with 41 CFR part
                60-2. Construction contractors have different affirmative action
                requirements under E.O. 11246 at 41 CFR part 60-4.
                 Enacted in 1973, and amended since, the purpose of Section 503 of
                the Rehabilitation Act of 1973 is twofold. First, Section 503 prohibits
                employment discrimination on the basis of disability by Federal
                contractors. Second, it requires each covered Federal contractor to
                take affirmative action to employ and advance in employment qualified
                individuals with disabilities. The requirements in Section 503
                generally apply to any business or organization that holds a single
                Federal contract or subcontract in excess of $15,000.\74\ Contractors
                with 50 or more employees and a single Federal contract or subcontract
                of $50,000 or more also must develop and maintain an affirmative action
                program that complies with 41 CFR part 60-741, subpart C.
                ---------------------------------------------------------------------------
                 \74\ Effective October 1, 2010, the coverage threshold under
                Section 503 increased from $10,000 to $15,000, in accordance with
                the inflationary adjustment requirements in 41 U.S.C. 1908. See
                Federal Acquisition Regulation; Inflation Adjustment of Acquisition-
                Related Thresholds, 75 FR 53129 (Aug. 30, 2010).
                ---------------------------------------------------------------------------
                 Enacted in 1974 and amended in the intervening years, VEVRAA
                prohibits Federal contractors and subcontractors from discriminating
                against employees and applicants because of status as a protected
                veteran (defined by the statute to include disabled veterans, recently
                separated veterans, Armed Forces Service Medal Veterans, and active
                duty wartime or campaign badge veterans). It also requires each covered
                Federal contractor and subcontractor to take affirmative action to
                employ and advance in employment these veterans. The requirements in
                VEVRAA generally apply to any business or organization that holds a
                single Federal contract or subcontract in excess of $150,000.\75\
                Contractors with 50 or more employees and a single Federal contract or
                subcontract of $150,000 or more also must develop and maintain an
                affirmative action program that complies with 41 CFR part 60-300,
                subpart C.
                ---------------------------------------------------------------------------
                 \75\ Effective October 1, 2015, the coverage threshold under
                VEVRAA increased from $100,000 to $150,000, in accordance with the
                inflationary adjustment requirements in 41 U.S.C. 1908. See Federal
                Acquisition Regulation; Inflation Adjustment of Acquisition-Related
                Thresholds, 80 FR 38293 (July 2, 2015).
                ---------------------------------------------------------------------------
                 Pursuant to these laws, receiving a Federal contract comes with a
                number of responsibilities. Contractors are required to comply with all
                provisions of these laws as well as the rules, regulations, and
                relevant orders of the Secretary of Labor. Where OFCCP finds
                noncompliance under any of the three laws or their implementing
                regulations, it utilizes established procedures to either facilitate
                resolution or proceed to administrative enforcement as necessary to
                secure compliance. A contractor found in violation who fails to correct
                violations of OFCCP's regulations may, after the opportunity for a
                hearing, have its contracts canceled, terminated, or suspended and/or
                may be subject to debarment.
                Proposed Revisions
                 This rulemaking proposes to amend 41 CFR parts 60-1, 60-300, and
                60-741 by removing unnecessary and confusing evidentiary standards and
                definitions that the 2020 rule requires, while retaining and refining
                the pre-enforcement procedures for issuing the Predetermination Notice
                and the Notice of Violation. The proposed revisions would enable OFCCP
                to apply Title VII standards to the facts and circumstances of each
                compliance evaluation and clarify that OFCCP's conciliation standards
                align with the flexibility and enforcement discretion afforded under
                Title VII for endeavoring to secure compliance through conciliation.
                The rulemaking would also amend each part's regulatory provision on
                Show Cause Notices, relocating the provision to the same section as the
                other codified pre-enforcement notices and codifying when OFCCP will
                amend the Show Cause Notice consistent with current practice.
                 The rulemaking further proposes to amend 41 CFR parts 60-1, 60-2,
                60-4, 60-20, 60-30, 60-40, 60-50, 60-300, and 60-741. The 2020 rule
                added the first severability clause to OFCCP's regulations, but it only
                applies to the resolution procedures sections for each of OFCCP's legal
                authorities (i.e., 41 CFR 60-1.33, 60-300.62, and 60-741.42).\76\ OFCCP
                has determined that, if there is a severability clause in any part of
                its regulations, it should apply to all of its regulations, rather than
                just certain specific sections. Thus, OFCCP proposes to include a
                severability clause in each part of its regulations, such that if a
                court of competent jurisdiction found any provision(s) of the part to
                be invalid, it would not affect any other provision of the part or
                chapter. The severability clauses currently only applicable to 41 CFR
                60-1.33, 60-300.62, and 60-741.42 would be removed.
                ---------------------------------------------------------------------------
                 \76\ In addition, OFCCP's 2020 final rule relating to the E.O.
                11246 religious exemption included a severability clause that
                applied only to provisions within 41 CFR 60-1.5. Implementing Legal
                Requirements Regarding the Equal Opportunity Clause's Religious
                Exemption, 85 FR 79324, 79372 (Dec. 9, 2020), codified at 41 CFR 60-
                1.5(f). OFCCP has proposed to rescind that rule, including the
                severability clause. 86 FR 62115 (Nov. 9, 2021).
                ---------------------------------------------------------------------------
                Revised Sections
                41 CFR PART 60-1--OBLIGATIONS OF CONTRACTORS AND SUBCONTRACTORS
                Subpart A--Preliminary Matters; Equal Opportunity Clause; Compliance
                Reports
                Section 60-1.3 Definitions
                 The NPRM proposes to amend Sec. 60-1.3 by removing the definitions
                for ``Qualitative evidence'' and ``Quantitative evidence.'' These
                definitions operate in tandem with the evidentiary standards that are
                currently creating hurdles to the effective enforcement of OFCCP laws
                and would be rendered unnecessary by other proposed changes to this
                part.
                [[Page 16148]]
                Subpart B--General Enforcement; Compliance Review and Complaint
                Procedure
                Section 1.20 Compliance Evaluations
                 The NPRM proposes to clarify the ``reasonable efforts'' standard in
                Sec. 60-1.20(b) that OFCCP must satisfy when attempting to secure
                compliance through conciliation, to make clear that OFCCP's
                conciliation standards align with Title VII.
                Section 1.28 Show Cause Notices
                 The NPRM proposes to remove and reserve Sec. 60-1.28, to relocate
                ``Show cause notices'' to Sec. 60-1.33 with the other pre-enforcement
                notices in this part.
                Section 60-1.33 Resolution Procedures
                 The NPRM proposes to revise Sec. 60-1.33 by changing the title to
                ``Pre-enforcement notice and conciliation procedures''; removing
                unnecessary regulatory standards impeding OFCCP's ability to resolve
                preliminary indicators and findings of discrimination; incorporating a
                relocated subsection on Show Cause Notices to improve regulatory
                organization; clarifying OFCCP's use of the Show Cause Notice including
                when a contractor denies access to its premises, to witnesses, or to
                records; making general clarifying edits to improve procedural efficacy
                including OFCCP's role in the early conciliation option; and removing
                the severability clause specific to this section.
                Subpart C--Ancillary Matters
                Section 60-1.48 Severability
                 The NPRM proposes to add Sec. 60-1.48, a severability clause.
                41 CFR PART 60-2--AFFIRMATIVE ACTION PROGRAMS
                Subpart C--Miscellaneous
                Section 60-2.36 Severability
                 The NPRM proposes to add Sec. 60-2.36, a severability clause.
                41 CFR PART 60-4--CONSTRUCTION CONTRACTORS--AFFIRMATIVE ACTION
                REQUIREMENTS
                Section 60-4.10 Severability
                 The NPRM proposes to add Sec. 60-4.10, a severability clause.
                41 CFR PART 60-20--DISCRIMINATION ON THE BASIS OF SEX
                Section 60-20.9 Severability
                 The NPRM proposes to add Sec. 60-20.9, a severability clause.
                41 CFR PART 60-30--RULES OF PRACTICE FOR ADMINISTRATIVE PROCEEDINGS TO
                ENFORCE EQUAL OPPORTUNITY UNDER EXECUTIVE ORDER 11246
                GENERAL PROVISIONS
                Section 60-30.38 Severability
                 The NPRM proposes to add Sec. 60-30.38, a severability clause.
                41 CFR PART 60-40--EXAMINATION AND COPYING OF OFCCP DOCUMENTS
                Subpart A--General
                Section 60-40.9 Severability
                 The NPRM proposes to add Sec. 60-40.9, a severability clause.
                41 CFR PART 60-50--GUIDELINES ON DISCRIMINATION BECAUSE OF RELIGION OR
                NATIONAL ORIGIN
                Section 60-50.6 Severability
                 The NPRM proposes to add Sec. 60-50.6, a severability clause.
                41 CFR PART 60-300--AFFIRMATIVE ACTION AND NONDISCRIMINATION
                OBLIGATIONS OF FEDERAL CONTRACTORS AND SUBCONTRACTORS REGARDING
                DISABLED VETERANS, RECENTLY SEPARATED VETERANS, ACTIVE DUTY WARTIME OR
                CAMPAIGN BADGE VETERANS, AND ARMED FORCES SERVICE MEDAL VETERANS
                Subpart A--Preliminary Matters; Equal Opportunity Clause
                Section 60-300.2 Definitions
                 The NPRM proposes to amend Sec. 60-300.2 by removing the
                definitions for ``Qualitative evidence'' and ``Quantitative evidence.''
                These definitions would be rendered unnecessary by other proposed
                changes to this part.
                Subpart D--General Enforcement and Complaint Procedures
                Section 60-300.60 Compliance Evaluations
                 The NPRM proposes to clarify the ``reasonable efforts'' standard in
                Sec. 60-300.60 (b) that OFCCP must satisfy when attempting to secure
                compliance through conciliation, to make clear that OFCCP's
                conciliation standards align with Title VII.
                Section 60-300.62 Resolution Procedures
                 The NPRM proposes to revise Sec. 60-300.62 by changing the title
                to ``Pre-enforcement notice and conciliation procedures''; removing
                unnecessary regulatory standards impeding OFCCP's ability to resolve
                preliminary indicators and findings of discrimination; incorporating a
                relocated subsection on Show Cause Notices to improve regulatory
                organization; clarifying OFCCP's use of the Show Cause Notice including
                when a contractor denies access to its premises, to witnesses, or to
                records; making general clarifying edits to improve procedural efficacy
                including OFCCP's role in the early conciliation option; and removing
                the severability clause specific to this section.
                Section 60-300.64 Show Cause Notices
                 The NPRM proposes to remove and reserve Sec. 60-300.64, to
                relocate ``Show cause notices'' to Sec. 60-300.62 with the other pre-
                enforcement notices in this part.
                Subpart E--Ancillary Matters
                Section 60-300.85 Severability
                 The NPRM proposes to add Sec. 60-300.85, a severability clause.
                41 CFR PART 60-741--AFFIRMATIVE ACTION AND NONDISCRIMINATION
                OBLIGATIONS OF FEDERAL CONTRACTORS AND SUBCONTRACTORS REGARDING
                INDIVIDUALS WITH DISABILITIES
                Subpart A--Preliminary Matters; Equal Opportunity Clause
                Section 60-741.2 Definitions
                 The NPRM proposes to amend Sec. 60-741.2 by removing the
                definitions for ``Qualitative evidence'' and ``Quantitative evidence.''
                These definitions would be rendered unnecessary by other proposed
                changes to this part.
                Subpart D--General Enforcement and Complaint Procedures
                Section 60-741.60 Compliance Evaluations
                 The NPRM proposes to clarify the ``reasonable efforts'' standard in
                Sec. 60-741.60 (b) that OFCCP must satisfy when attempting to secure
                compliance through conciliation, to make clear that OFCCP's
                conciliation standards align with Title VII.
                Section 60-741.62 Resolution Procedures
                 The NPRM proposes to revise Sec. 60-741.62 by changing the title
                to ``Pre-enforcement notice and conciliation procedures''; removing
                unnecessary regulatory standards impeding OFCCP's ability to resolve
                preliminary indicators and findings of discrimination; incorporating a
                relocated subsection on
                [[Page 16149]]
                Show Cause Notices to improve regulatory organization; clarifying
                OFCCP's use of the Show Cause Notice including when a contractor denies
                access to its premises, to witnesses, or to records; making general
                clarifying edits to improve procedural efficacy including OFCCP's role
                in the early conciliation option; and removing the severability clause
                specific to this section.
                Section 60-741.64 Show Cause Notices
                 The NPRM proposes to remove and reserve Sec. 60-741.64, to
                relocate ``Show cause notices'' to Sec. 60-741.62 with the other pre-
                enforcement notices in this part.
                Subpart E--Ancillary Matters
                Section 60-741.84 Severability
                 The NPRM proposes to add Sec. 60-741.84, a severability clause.
                Regulatory Procedures
                Executive Order 12866 (Regulatory Planning and Review) and Executive
                Order 13563 (Improving Regulation and Regulatory Review)
                 Under Executive Order 12866 (E.O. 12866), the Office of Management
                and Budget's (OMB) Office of Information and Regulatory Affairs (OIRA)
                determines whether a regulatory action is significant and, therefore,
                subject to the requirements of E.O. 12866 and OMB review. Section 3(f)
                of E.O. 12866 defines a ``significant regulatory action'' as an action
                that is likely to result in a rule that: (1) Has an annual effect on
                the economy of $100 million or more, or adversely affects in a material
                way a sector of the economy, productivity, competition, jobs, the
                environment, public health or safety, or State, local, or tribal
                governments or communities (also referred to as economically
                significant); (2) creates serious inconsistency or otherwise interferes
                with an action taken or planned by another agency; (3) materially
                alters the budgetary impacts of entitlement grants, user fees, or loan
                programs, or the rights and obligations of recipients thereof; or (4)
                raises novel legal or policy issues arising out of legal mandates, the
                President's priorities, or the principles set forth in E.O. 12866. This
                proposed rulemaking has been designated a ``significant regulatory
                action,'' although not economically significant, under section 3(f) of
                E.O. 12866. OMB has reviewed this proposal.
                 Executive Order 13563 (E.O. 13563) directs agencies to adopt a
                regulation only upon a reasoned determination that its benefits justify
                its costs; tailor the regulation to impose the least burden on society,
                consistent with obtaining the regulatory objectives; and in choosing
                among alternative regulatory approaches, select those approaches that
                maximize net benefits. E.O. 13563 recognizes that some benefits are
                difficult to quantify and provides that, where appropriate and
                permitted by law, agencies may consider and discuss qualitatively
                values that are difficult or impossible to quantify, including equity,
                human dignity, fairness, and distributive impacts.
                A. Need for Rulemaking
                 OFCCP believes that the 2020 rule created rigid constraints that
                are not required by Title VII and/or impede the agency's effective
                enforcement of E.O. 11246, Section 503, and VEVRAA. This has delayed
                information exchange with contractors and created obstacles to a timely
                resolution of preliminary indicators and findings of discrimination and
                greater compliance. The 2020 rule has also resulted in time-consuming
                collateral disputes over the implementation of the rule's regulatory
                standards--diverting limited agency and contractor resources away from
                resolving concerns of discrimination. This diversion of resources and
                delay in the pre-enforcement process will reduce rather than increase
                the number of contractors that OFCCP is able to evaluate for
                compliance.
                 This NPRM aims to create a streamlined, efficient, and flexible
                process to ensure OFCCP utilizes its limited resources as strategically
                as possible to advance the agency's mission. In a return to prior
                agency policy, OFCCP will apply Title VII standards to the facts and
                circumstances of each compliance evaluation, including during the pre-
                enforcement notice and conciliation stages. Doing so will remove
                unnecessary constraints that impede effective enforcement by limiting
                the agency's enforcement discretion, and prevent delays in case
                resolutions due to the 2020 rule. Removing the blanket regulatory
                requirements will also allow OFCCP to pursue enforcement in cases that,
                albeit actionable under Title VII, are more difficult to pursue under
                the 2020 rule. OFCCP remains committed to providing contractors early
                notice when the agency identifies preliminary indicators of systemic
                discrimination during a compliance evaluation. Such notice 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.
                Providing earlier notice to contractors can result in the prompt and
                mutually satisfactory resolution of cases, which minimizes unnecessary
                burdens on contractors and agency staff. Going forward, OFCCP would
                provide updated guidance to its compliance officers on the pre-
                enforcement procedures. This guidance would reflect current case law,
                provide OFCCP needed flexibility, and be available to the public to
                promote transparency.
                B. Discussion of Impacts
                 In this section, OFCCP presents a summary of the costs associated
                with the modifications in this proposed rulemaking. OFCCP utilizes the
                Employment Information Report (EEO-1) data, which identifies the number
                of supply and service contractors that could be scheduled for a
                compliance evaluation and thus impacted by the proposed modification.
                The EEO-1 Report must be filed by covered Federal contractors who: (1)
                Have 50 or more employees; (2) are prime contractors or first-tier
                subcontractors; and (3) have a contract, subcontract, or purchase order
                amounting to $50,000 or more. OFCCP schedules only contractors who meet
                those thresholds for compliance evaluations. The number of supply and
                service contractors possibly impacted by the proposed modification is
                24,251.\77\
                ---------------------------------------------------------------------------
                 \77\ OFCCP obtained the total number of supply and service
                contractors from the most recent EEO-1 Report data available, which
                is from fiscal year (FY) 2018.
                ---------------------------------------------------------------------------
                 OFCCP also utilizes USASpending data, which identifies the number
                of construction contractors that could be scheduled for a compliance
                evaluation and thus impacted by the proposed modification. The
                USASpending data accounts for all construction contractors with
                contracts greater than $10,000 who meet the thresholds for compliance
                evaluations. The number of construction contractors possibly impacted
                by the proposed modification is 12,362.\78\
                ---------------------------------------------------------------------------
                 \78\ OFCCP obtained the total number of construction
                establishments (12,609) from FY 2019 USASpending data, available at
                https://www.usaspending.gov/#/download_center/award_data_archive
                (last accessed Dec. 8, 2021). The agency then used the ratio of
                contractor establishments to contractor firms (1.02) from US Census
                Bureau data, available at https://www.census.gov/data/tables/2017/econ/economic-census/naics-sector-23.html (last accessed Dec. 8,
                2021). 12,609/1.02 = 12,362 construction contractors.
                ---------------------------------------------------------------------------
                 While OFCCP acknowledges that all Federal contractors may learn
                their EEO requirements in order to comply with the laws that OFCCP
                enforces, only those contractors scheduled for a compliance evaluation
                are directly impacted by the proposed modification.
                [[Page 16150]]
                Scheduled contractors are likely to have a need to know the pre-
                enforcement procedures because they may need to interact with OFCCP.
                The total number of contractors possibly impacted by the proposed
                modification is 36,613.\79\
                ---------------------------------------------------------------------------
                 \79\ 24,251 supply and service contractors + 12,362 construction
                contractors = 36,613 contractors.
                ---------------------------------------------------------------------------
                 OFCCP has determined that either a Human Resources Manager (SOC 11-
                3121) or a Lawyer (SOC 23-1011) would review the proposed modification.
                OFCCP estimates that 50 percent of the reviewers would be human
                resources managers and 50 percent would be in-house counsel. Thus, the
                mean hourly wage rate reflects a 50/50 split between human resources
                managers and lawyers. The mean hourly wage of a human resources manager
                is $64.70 and the mean hourly wage of a lawyer is $71.59.\80\
                Therefore, the average hourly wage rate is $68.15 (($64.70 + $71.59)/
                2). OFCCP adjusted this wage rate to reflect fringe benefits such as
                health insurance and retirement benefits, as well as overhead costs
                such as rent, utilities, and office equipment. OFCCP uses a fringe
                benefits rate of 46 percent \81\ and an overhead rate of 17
                percent,\82\ resulting in a fully loaded hourly compensation rate of
                $111.08 ($68.15 + ($68.15 x 46 percent) + ($68.15 x 17 percent)). The
                estimated labor cost to contractors is reflected in Table 1, below.
                ---------------------------------------------------------------------------
                 \80\ BLS, Occupational Employment Statistics, Occupational
                Employment and Wages, May 2020, available at www.bls.gov/oes/current/oes_nat.htm (last accessed Dec. 8, 2021).
                 \81\ BLS, Employer Costs for Employee Compensation, available at
                www.bls.gov/ncs/data.htm (last accessed Dec. 8, 2021). Wages and
                salaries averaged $26.53 per hour worked in December 2020, while
                benefit costs averaged $12.07, which is a benefits rate of 46
                percent.
                 \82\ Cody Rice, U.S. Environmental Protection Agency, ``Wage
                Rates for Economic Analyses of the Toxics Release Inventory
                Program,'' (June 10, 2002), available at www.regulations.gov/document?D=EPA-HQ-OPPT-2014-0650-0005 (last accessed Dec. 8, 2021).
                 Table 1--Labor Cost
                ----------------------------------------------------------------------------------------------------------------
                 Fully loaded
                 Major occupational groups Average hourly Fringe benefit Overhead rate hourly
                 wage rate rate compensation
                ----------------------------------------------------------------------------------------------------------------
                Human Resources Managers and Lawyers........ $68.15 46% 17% $111.08
                ----------------------------------------------------------------------------------------------------------------
                1. Cost of Rule Familiarization
                 OFCCP acknowledges that 5 CFR 1320.3(b)(1)(i) requires agencies to
                include in the burden analysis for a proposed rulemaking the estimated
                time it takes for contractors to review and understand the instructions
                for compliance. To minimize the burden, OFCCP will publish compliance
                assistance materials regarding the proposed rule, once final.
                 OFCCP believes that a human resources manager or lawyer will take a
                minimum of 30 minutes (\1/2\ hour) to read the proposed rule or read
                the compliance assistance materials provided by OFCCP. Consequently,
                the estimated burden for rule familiarization is 18,307 hours (36,613
                contractor firms x \1/2\ hour). OFCCP calculates the total estimated
                cost of rule familiarization as $2,033,542 (18,307 hours x $111.08/
                hour) in the first year, which amounts to a 10-year annualized cost of
                $231,450 at a discount rate of 3 percent (which is $6.32 per contractor
                firm) or $270,589 at a discount rate of 7 percent (which is $7.39 per
                contractor firm). Table 2, below, reflects the estimated regulatory
                familiarization costs for the proposed rule.
                 Table 2--Regulatory Familiarization Cost
                ------------------------------------------------------------------------
                
                ------------------------------------------------------------------------
                Total number of contractors............... 36,613.
                Time to review rule....................... 30 minutes.
                Human Resources Managers fully loaded $111.08.
                 hourly compensation.
                Regulatory familiarization cost in the $2,033,542.
                 first year.
                Annualized cost with 3 percent discounting $231,450.
                Annualized cost per contractor with 3 $6.32.
                 percent discounting.
                Annualized cost with 7 percent discounting $270,589.
                Annualized cost per contractor with 7 $7.39.
                 percent discounting.
                ------------------------------------------------------------------------
                2. Benefits
                 E.O. 13563 recognizes that some rules have benefits that are
                difficult to quantify or monetize but are nevertheless important and
                states that agencies may consider such benefits. This proposed rule has
                equity and fairness benefits, which are explicitly recognized in E.O.
                13563. The proposal is designed to achieve these benefits by:
                 Supporting more effective enforcement of OFCCP's equal
                opportunity laws by eliminating procedural inefficiencies and
                heightened evidentiary standards created by the 2020 rule;
                 Facilitating earlier and more efficient resolutions;
                 Ensuring greater certainty and consistency in case
                resolutions by maintaining adherence to Title VII and OFCCP case law
                standards;
                 Promoting transparency by codifying the required use of
                the Predetermination Notice when the agency identifies preliminary
                indicators of discrimination;
                 Allowing OFCCP to tailor the pre-enforcement process to
                the specific facts and circumstances of each case, consistent with
                judicial interpretations of the applicable legal authorities, which
                will in turn allow OFCCP to more effectively redress unlawful
                discrimination;
                 Advancing a policy of promoting consistency between Title
                VII and E.O. 11246 and removing unnecessary constraints on the agency's
                ability to pursue meritorious cases. This approach will help OFCCP
                advance the overriding policy goal of promoting nondiscrimination by
                strengthening the enforcement of federal protections under E.O. 11246;
                [[Page 16151]]
                 Reducing time-consuming disputes over unnecessary
                standards; and
                 Furthering the strategic allocation of agency resources.
                C. Alternatives
                 In addition to the approach proposed, OFCCP also considered
                alternative approaches. OFCCP considered modifying the 2020 rule to
                rescind the entirety of the rule except the correction to OFCCP's
                agency head title. OFCCP also considered modifying the 2020 rule by
                eliminating the Predetermination Notice entirely since it currently
                functions as a procedural redundancy. However, OFCCP determined that
                retaining both pre-enforcement notices in the regulatory text while
                rescinding the inflexible evidentiary requirements for the
                Predetermination Notice and Notice of Violation allows the contractor
                and OFCCP to engage in earlier discussions that can lead to more
                efficient resolutions.
                 OFCCP also considered maintaining the current regulations
                established in the 2020 rule. However, as discussed earlier in this
                preamble, OFCCP determined that creating a rigid regulatory process to
                govern its pre-enforcement compliance evaluation process is
                incompatible with the flexibility needed for effective enforcement.
                Moreover, the 2020 rule places certain obligations on OFCCP at this
                preliminary stage that go beyond the substantive legal requirements
                that E.O. 11246, Title VII, and interpretive case law require to state
                a claim and prove discrimination at a much later stage, upon a full
                evidentiary record. OFCCP has determined that imposing such rigid and
                heightened standards early in its pre-enforcement proceedings unduly
                constrains its ability to pursue claims of discrimination. The 2020
                rule also created an inefficient process where OFCCP's Predetermination
                Notice (intended to convey preliminary indicators of discrimination)
                and the Notice of Violation (intended to inform the contractor that
                corrective action is required and to invite conciliation through a
                written agreement) were largely duplicative. Further, the mandating of
                regulatory requirements for making inherently fact specific
                determinations, invites time-consuming disputes over the application of
                the rule's requirements. Modifying the 2020 regulations would help
                restore the enforcement discretion and flexibility OFCCP needs to
                facilitate compliance through conciliation by providing pre-enforcement
                notice of preliminary discrimination indicators and findings, and
                applying Title VII to the facts and circumstances of each compliance
                evaluation. OFCCP is proposing modification of the regulatory text to
                create a more streamlined and effective process for the agency to
                communicate preliminary indicators to contractors, provide contractors
                an opportunity to respond, notify contractors of violations, and
                ultimately facilitate greater understanding to obtain resolution
                through conciliation.
                Regulatory Flexibility Act and Executive Order 13272 (Consideration of
                Small Entities)
                 The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601 et seq.,
                establishes ``as a principle of regulatory issuance that agencies shall
                endeavor, consistent with the objectives of the rule and applicable
                statutes, to fit regulatory and informational requirements to the scale
                of the businesses, organizations, and governmental jurisdictions
                subject to regulation.'' Public Law 96-354, 2(b). The RFA requires
                agencies to consider the impact of a regulatory action on a wide range
                of small entities, including small businesses, nonprofit organizations,
                and small governmental jurisdictions.
                 Agencies must review whether a regulatory action would have a
                significant economic impact on a substantial number of small entities.
                See 5 U.S.C. 603. If the regulatory action would, then the agency must
                prepare a regulatory flexibility analysis as described in the RFA. See
                id. However, if the agency determines that the regulatory action would
                not be expected to have a significant economic impact on a substantial
                number of small entities, then the head of the agency may so certify
                and the RFA does not require a regulatory flexibility analysis. See 5
                U.S.C. 605. The certification must provide the factual basis for this
                determination.
                 The proposed rule will not have a significant economic impact on a
                substantial number of small entities. The first year cost for small
                entities at a discount rate of 7 percent for rule familiarization is
                $51.91 per entity which is far less than 1 percent of the annual
                revenue of the smallest of the small entities affected by the proposal.
                Accordingly, OFCCP certifies that the proposed modification will not
                have a significant economic impact on a substantial number of small
                entities.
                Paperwork Reduction Act
                 The Paperwork Reduction Act of 1995 requires that OFCCP consider
                the impact of paperwork and other information collection burdens
                imposed on the public. See 44 U.S.C. 3507(d). An agency may not collect
                or sponsor the collection of information or impose an information
                collection requirement unless the information collection instrument
                displays a currently valid OMB control number. See 5 CFR 1320.5(b)(1).
                 OFCCP has determined that there would be no new requirement for
                information collection associated with this proposed rulemaking. The
                information collections contained in the existing E.O. 11246, Section
                503, and VEVRAA regulations are currently approved under OMB Control
                Number 1250-0001 (Construction Recordkeeping and Reporting
                Requirements), OMB Control Number 1250-0003 (Recordkeeping and
                Reporting Requirements--Supply and Service), OMB Control Number 1250-
                0004 (Office of Federal Contract Compliance Programs Recordkeeping and
                Reporting Requirements Under the Vietnam Era Veterans' Readjustment
                Assistance Act of 1974, as Amended), and OMB Control Number 1250-0005
                (Office of Federal Contract Compliance Programs Recordkeeping and
                Reporting Requirements Under Rehabilitation Act of 1973, as Amended
                Section 503). Consequently, this proposal does not require review by
                OMB under the authority of the Paperwork Reduction Act.
                Unfunded Mandates Reform Act of 1995
                 For purposes of the Unfunded Mandates Reform Act of 1995, 2 U.S.C.
                1532, this proposed rule would not include any federal mandate that may
                result in excess of $100 million in expenditures by state, local, and
                tribal governments in the aggregate or by the private sector.
                Executive Order 13132 (Federalism)
                 OFCCP has reviewed this proposed rule in accordance with Executive
                Order 13132 regarding federalism and has determined that it would not
                have ``federalism implications.'' The proposed regulatory action would
                not ``have substantial direct effects on the States, on the
                relationship between the national government and the States, or on the
                distribution of power and responsibilities among the various levels of
                government.''
                Executive Order 13175 (Consultation and Coordination With Indian Tribal
                Governments)
                 This proposed rule would not have tribal implications under
                Executive Order 13175 that would require a tribal summary impact
                statement. The proposal would not ``have substantial direct effects on
                one or more Indian
                [[Page 16152]]
                tribes, on the relationship between the Federal Government and Indian
                tribes, or on the distribution of power and responsibilities between
                the Federal Government and Indian tribes.''
                List of Subjects
                41 CFR Part 60-1
                 Administrative practice and procedure, Civil rights, Employment,
                Equal employment opportunity, Government contracts, Government
                procurement, Investigations, Labor, Reporting and recordkeeping
                requirements.
                41 CFR Part 60-2
                 Equal employment opportunity, Government procurement, Reporting and
                recordkeeping requirements.
                41 CFR Part 60-4
                 Construction industry, Equal employment opportunity, Government
                procurement, Reporting and recordkeeping requirements.
                41 CFR Part 60-20
                 Civil rights, Equal employment opportunity, Government procurement,
                Labor, Sex discrimination, Women.
                41 CFR Part 60-30
                 Administrative practice and procedure, Civil rights, Equal
                employment opportunity, Government contracts, Government procurement,
                Government property management, Individuals with Disabilities,
                Reporting and recordkeeping requirements, Veterans.
                41 CFR Part 60-40
                 Freedom of information, Reporting and recordkeeping requirements.
                41 CFR Part 60-50
                 Equal employment opportunity, Government procurement, Religious
                discrimination, Reporting and recordkeeping requirements.
                41 CFR Parts 60-300 and 60-741
                 Administrative practice and procedure, Civil rights, Employment,
                Equal employment opportunity, Government contracts, Government
                procurement, Individuals with disabilities, Investigations, Labor,
                Reporting and recordkeeping requirements, Veterans.
                Jenny R. Yang,
                Director, Office of Federal Contract Compliance Programs.
                 For the reasons stated in the preamble, the OFCCP proposes to amend
                41 CFR parts 60-1, 60-2, 60-4, 60-20, 60-30, 60-40, 60-50, 60-300, and
                60-741 as follows:
                PART 60-1--OBLIGATIONS OF CONTRACTORS AND SUBCONTRACTORS
                0
                1. The authority citation for part 60-1 continues to read as follows:
                 Authority: Sec. 201, E.O. 11246, 30 FR 12319, 3 CFR, 1964-1965
                Comp., p. 339, as amended by E.O. 11375, 32 FR 14303, 3 CFR, 1966-
                1970 Comp., p. 684, E.O. 12086, 43 FR 46501, 3 CFR, 1978 Comp., p.
                230, E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258 and E.O.
                13672, 79 FR 42971.
                Sec. 60-1.3 [Amended]
                0
                2. Amend Sec. 60-1.3 by removing the definitions for ``Qualitative
                evidence'' and ``Quantitative evidence''.
                0
                3. Amend Sec. 60-1.20 by revising paragraph (b) to read as follows:
                Sec. 60-1.20 Compliance evaluations.
                * * * * *
                 (b) Where deficiencies are found to exist, OFCCP will make
                reasonable efforts to secure compliance through conciliation and
                persuasion, pursuant to Sec. 60-1.33. The ``reasonable efforts''
                standard shall be interpreted consistently with title VII of the Civil
                Rights Act of 1964 and its requirement that the Equal Employment
                Opportunity Commission ``endeavor to eliminate any such alleged
                unlawful employment practice by informal methods of conference,
                conciliation, and persuasion.'' Before the contractor can be found to
                be in compliance with the order, it must make a specific commitment, in
                writing, to correct any such deficiencies. The commitment must include
                the precise action to be taken and dates for completion. The time
                period allotted shall be no longer than the minimum period necessary to
                effect such changes. Upon approval of the commitment, the contractor
                may be considered in compliance, on condition that the commitments are
                faithfully kept. The contractor shall be notified that making such
                commitments does not preclude future determinations of noncompliance
                based on a finding that the commitments are not sufficient to achieve
                compliance.
                * * * * *
                Sec. 60-1.28 [Removed and Reserved]
                0
                4. Remove and reserve Sec. 60-1.28.
                0
                5. Revise Sec. 60-1.33 to read as follows:
                Sec. 60-1.33 Pre-enforcement notice and conciliation procedures.
                 (a) Predetermination Notice. If a compliance evaluation by OFCCP
                indicates preliminary indicators of discrimination, OFCCP will issue a
                Predetermination Notice describing the indicators and providing the
                contractor an opportunity to respond. The Predetermination Notice may
                also include other potential violations that OFCCP has identified at
                that stage of the review. After OFCCP issues the Predetermination
                Notice, the agency may identify additional violations and include them
                in a subsequent Notice of Violation or Show Cause Notice without
                amending the Predetermination Notice. OFCCP will provide the contractor
                an opportunity to conciliate additional violations identified in the
                Notice of Violation or Show Cause Notice. Any response to a
                Predetermination Notice must be received by OFCCP within 15 calendar
                days of receipt of the Notice, which deadline OFCCP may extend for good
                cause. If the contractor does not respond or OFCCP determines that the
                contractor's response did not resolve the indicators of discrimination
                in the Predetermination Notice, OFCCP will proceed with the review.
                 (b) Notice of Violation. If a compliance evaluation by OFCCP
                indicates a violation of the equal opportunity clause, OFCCP will issue
                a Notice of Violation to the contractor requiring corrective action and
                inviting conciliation through a written agreement. The Notice of
                Violation will identify the violations and describe the recommended
                corrective actions. After the Notice of Violation is issued, OFCCP may
                include additional violations in a subsequent Show Cause Notice without
                amendment to the Notice of Violation. OFCCP will provide the contractor
                an opportunity to conciliate additional violations identified in the
                Show Cause Notice.
                 (c) Conciliation agreement. If a compliance review, complaint
                investigation, or other review by OFCCP or its representative indicates
                a material violation of the equal opportunity clause, and:
                 (1) If the contractor, subcontractor, or bidder is willing to
                correct the violations and/or deficiencies; and
                 (2) If OFCCP or its representative determines that settlement
                (rather than referral for consideration of formal enforcement) is
                appropriate, a written conciliation agreement shall be required. The
                agreement shall provide for such remedial action as may be necessary to
                correct the violations and/or deficiencies identified, including, where
                appropriate (but not limited to), remedies such as back pay, salary
                adjustments, and retroactive seniority.
                 (d) Show cause notices. When the Director has reasonable cause to
                believe that a contractor has violated the equal opportunity clause the
                Director may
                [[Page 16153]]
                issue a notice requiring the contractor to show cause, within 30 days,
                why monitoring, enforcement proceedings, or other appropriate action to
                ensure compliance should not be instituted. OFCCP may issue a Show
                Cause Notice without first issuing a Predetermination Notice or Notice
                of Violation when the contractor has failed to provide access to its
                premises for an on-site review or refused to provide access to
                witnesses, records, or other information. The Show Cause Notice will
                include each violation that OFCCP has identified at the time of
                issuance. Where OFCCP identifies additional violations after issuing a
                Show Cause Notice, OFCCP will modify or amend the Show Cause Notice.
                 (e) Expedited conciliation option. OFCCP may agree to waive the
                procedures set forth in paragraphs (a) and/or (b) of this section to
                enter directly into a conciliation agreement with a contractor. OFCCP
                may offer the contractor this expedited conciliation option, but may
                not require or insist that the contractor avail itself of the expedited
                conciliation option.
                0
                6. Add Sec. 60-1.48 to read as follows:
                Sec. 60-1.48 Severability.
                 Should a court of competent jurisdiction hold any provision(s) of
                this part to be invalid, such action will not affect any other
                provision of this part.
                PART 60-2--AFFIRMATIVE ACTION PROGRAMS
                0
                7. The authority citation for part 60-2 continues to read as follows:
                 Authority: Sec. 201, E.O. 11246, 30 FR 12319, E.O. 11375, 32 FR
                14303, as amended by E.O. 12086, 43 FR 46501, and E.O. 13672, 79 FR
                42971.
                0
                8. Add Sec. 60-2.36 to read as follows:
                Sec. 60-2.36 Severability.
                 Should a court of competent jurisdiction hold any provision(s) of
                this part to be invalid, such action will not affect any other
                provision of this part.
                PART 60-4--CONSTRUCTION CONTRACTORS--AFFIRMATIVE ACTION
                REQUIREMENTS
                0
                9. The authority citation for part 60-4 continues to read as follows:
                 Authority: Secs. 201, 202, 205, 211, 301, 302, and 303 of E.O.
                11246, as amended, 30 FR 12319; 32 FR 14303, as amended by E.O.
                12086; and E.O. 13672, 79 FR 42971.
                0
                10. Add Sec. 60-4.10 to read as follows:
                Sec. 60-4.10 Severability.
                 Should a court of competent jurisdiction hold any provision(s) of
                this part to be invalid, such action will not affect any other
                provision of this part.
                PART 60-20--DISCRIMINATION ON THE BASIS OF SEX
                0
                11. The authority citation for part 60-20 continues to read as follows:
                 Authority: Sec. 201, E.O. 11246, 30 FR 12319, 3 CFR, 1964-1965
                Comp., p. 339 as amended by E.O. 11375, 32 FR 14303, 3 CFR 1966-1970
                Comp., p. 684; E.O. 12086, 43 FR 46501, 3 CFR 1978 Comp., p. 230;
                E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258; and E.O. 13672,
                79 FR 42971.
                0
                12. Add Sec. 60-20.9 to read as follows:
                Sec. 60-20.9 Severability.
                 Should a court of competent jurisdiction hold any provision(s) of
                this part to be invalid, such action will not affect any other
                provision of this part.
                PART 60-30--RULES OF PRACTICE FOR ADMINISTRATIVE PROCEEDINGS TO
                ENFORCE EQUAL OPPORTUNITY UNDER EXECUTIVE ORDER 11246
                0
                13. The authority citation for part 60-30 continues to read as follows:
                 Authority: Executive Order 11246, as amended, 30 FR 12319, 32
                FR 14303, as amended by E.O. 12086; 29 U.S.C. 793, as amended, and
                38 U.S.C. 4212, as amended.
                0
                14. Add Sec. 60-30.38 to read as follows:
                Sec. 60-30.38 Severability.
                 Should a court of competent jurisdiction hold any provision(s) of
                this part to be invalid, such action will not affect any other
                provision of this part.
                PART 60-40--EXAMINATION AND COPYING OF OFCCP DOCUMENTS
                0
                15. The authority citation for part 60-40 continues to read as follows:
                 Authority: E.O. 11246, as amended by E.O. 11375, and as amended
                by E.O. 12086; 5 U.S.C. 552.
                0
                16. Add Sec. 60-40.9 to read as follows:
                Sec. 60-40.9 Severability.
                 Should a court of competent jurisdiction hold any provision(s) of
                this part to be invalid, such action will not affect any other
                provision of this part or chapter.
                PART 60-50--GUIDELINES ON DISCRIMINATION BECAUSE OF RELIGION OR
                NATIONAL ORIGIN
                0
                17. The authority citation for part 60-50 continues to read as follows:
                 Authority: Sec. 201 of E.O. 11246, as amended, 30 FR 12319; 32
                FR 14303, as amended by E.O. 12086; and E.O. 13672, 79 FR 42971.
                0
                18. Add Sec. 60-50.6 to read as follows:
                Sec. 60-50.6 Severability.
                 Should a court of competent jurisdiction hold any provision(s) of
                this part to be invalid, such action will not affect any other
                provision of this part.
                PART 60-300--AFFIRMATIVE ACTION AND NONDISCRIMINATION OBLIGATIONS
                OF FEDERAL CONTRACTORS AND SUBCONTRACTORS REGARDING DISABLED
                VETERANS, RECENTLY SEPARATED VETERANS, ACTIVE DUTY WARTIME OR
                CAMPAIGN BADGE VETERANS, AND ARMED FORCES SERVICE MEDAL VETERANS
                0
                19. The authority citation for part 60-300 continues to read as
                follows:
                 Authority: 29 U.S.C. 793; 38 U.S.C. 4211 and 4212; E.O. 11758
                (3 CFR, 1971-1975 Comp., p. 841).
                Sec. 60-300.2 [Amended]
                0
                20. Amend Sec. 60-300.2 by removing the definitions for ``Qualitative
                evidence'' and ``Quantitative evidence.
                0
                21. Amend Sec. 60-300.60 by revising paragraph (b) to read as follows:
                Sec. 60-300.60 Compliance evaluations.
                * * * * *
                 (b) Where deficiencies are found to exist, OFCCP will make
                reasonable efforts to secure compliance through conciliation and
                persuasion, pursuant to Sec. 60-300.62. The ``reasonable efforts''
                standard shall be interpreted consistently with title VII of the Civil
                Rights Act of 1964 and its requirement that the Equal Employment
                Opportunity Commission ``endeavor to eliminate any such alleged
                unlawful employment practice by informal methods of conference,
                conciliation, and persuasion.''
                * * * * *
                0
                22. Revise Sec. 60-300.62 to read as follows:
                Sec. 60-300.6 2 Pre-enforcement notice and conciliation procedures.
                 (a) Predetermination Notice. If a compliance evaluation by OFCCP
                indicates preliminary indicators of discrimination, OFCCP will issue a
                Predetermination Notice describing the indicators and providing the
                contractor an opportunity to respond. The Predetermination Notice may
                also include other potential violations that OFCCP has identified at
                that stage of the review. After OFCCP issues the Predetermination
                Notice, the agency may identify additional violations and include them
                in a subsequent Notice of Violation or Show Cause Notice without
                amending the Predetermination Notice. OFCCP will provide the contractor
                an opportunity to conciliate additional violations identified in the
                Notice of Violation or Show Cause Notice. Any response to a
                Predetermination Notice
                [[Page 16154]]
                must be received by OFCCP within 15 calendar days of receipt of the
                Notice, which deadline OFCCP may extend for good cause. If the
                contractor does not respond or OFCCP determines that the contractor's
                response did not resolve the indicators of discrimination in the
                Predetermination Notice, OFCCP will proceed with the review.
                 (b) Notice of Violation. If a compliance evaluation by OFCCP
                indicates a violation of the equal opportunity clause, OFCCP will issue
                a Notice of Violation to the contractor requiring corrective action and
                inviting conciliation through a written agreement. The Notice of
                Violation will identify the violations and describe the recommended
                corrective actions. After the Notice of Violation is issued, OFCCP may
                include additional violations in a subsequent Show Cause Notice without
                amendment to the Notice of Violation. OFCCP will provide the contractor
                an opportunity to conciliate additional violations identified in the
                Show Cause Notice.
                 (c) Conciliation agreement. If a compliance review, complaint
                investigation, or other review by OFCCP or its representative indicates
                a material violation of the equal opportunity clause, and:
                 (1) If the contractor, subcontractor, or bidder is willing to
                correct the violations and/or deficiencies; and
                 (2) If OFCCP or its representative determines that settlement
                (rather than referral for consideration of formal enforcement) is
                appropriate, a written conciliation agreement shall be required. The
                agreement shall provide for such remedial action as may be necessary to
                correct the violations and/or deficiencies identified, including, where
                appropriate (but not limited to), remedies such as back pay, salary
                adjustments, and retroactive seniority.
                 (d) Show cause notices. When the Director has reasonable cause to
                believe that a contractor has violated the equal opportunity clause the
                Director may issue a notice requiring the contractor to show cause,
                within 30 days, why monitoring, enforcement proceedings, or other
                appropriate action to ensure compliance should not be instituted. OFCCP
                may issue a Show Cause Notice without first issuing a Predetermination
                Notice or Notice of Violation when the contractor has failed to provide
                access to its premises for an on-site review or refused to provide
                access to witnesses, records, or other information. The Show Cause
                Notice will include each violation that OFCCP has identified at the
                time of issuance. Where OFCCP identifies additional violations after
                issuing a Show Cause Notice, OFCCP will modify or amend the Show Cause
                Notice.
                 (e) Expedited conciliation option. OFCCP may agree to waive the
                procedures set forth in paragraphs (a) and/or (b) of this section to
                enter directly into a conciliation agreement with a contractor. OFCCP
                may offer the contractor this expedited conciliation option, but may
                not require or insist that the contractor avail itself of the expedited
                conciliation option.
                Sec. 60-300.64 [Removed and Reserved]
                0
                23. Remove and reserve Sec. 60-300.64.
                0
                24. Add Sec. 60-300.85 to read as follows:
                Sec. 60-300.85 Severability.
                 Should a court of competent jurisdiction hold any provision(s) of
                this part to be invalid, such action will not affect any other
                provision of this part.
                PART 60-741--AFFIRMATIVE ACTION AND NONDISCRIMINATION OBLIGATIONS
                OF FEDERAL CONTRACTORS AND SUBCONTRACTORS REGARDING INDIVIDUALS
                WITH DISABILITIES
                0
                25. The authority citation for part 60-741 continues to read as
                follows:
                 Authority: 29 U.S.C. 705 and 793; E.O. 11758 (3 CFR, 1971-1975
                Comp., p. 841).
                Sec. 60-741.2 April 20, 2022 [Amended]
                0
                26. Amend Sec. 60-741.2 by removing the definitions for ``Qualitative
                evidence'' and ``Quantitative evidence.''
                0
                27. Amend Sec. 60-741.60 by revising paragraph (b) to read as follows:
                Sec. 60-741.6 0 Compliance evaluations.
                * * * * *
                 (b) Where deficiencies are found to exist, OFCCP will make
                reasonable efforts to secure compliance through conciliation and
                persuasion, pursuant to Sec. 60-741.62. The ``reasonable efforts''
                standard shall be interpreted consistently with title VII of the Civil
                Rights Act of 1964 and its requirement that the Equal Employment
                Opportunity Commission ``endeavor to eliminate any such alleged
                unlawful employment practice by informal methods of conference,
                conciliation, and persuasion.''
                * * * * *
                0
                28. Revise Sec. 60-741.62 to read as follows:
                Sec. 60-741.62 Pre-enforcement notice and conciliation procedures.
                 (a) Predetermination Notice. If a compliance evaluation by OFCCP
                indicates preliminary indicators of discrimination, OFCCP will issue a
                Predetermination Notice describing the indicators and providing the
                contractor an opportunity to respond. The Predetermination Notice may
                also include other potential violations that OFCCP has identified at
                that stage of the review. After OFCCP issues the Predetermination
                Notice, the agency may identify additional violations and include them
                in a subsequent Notice of Violation or Show Cause Notice without
                amending the Predetermination Notice. OFCCP will provide the contractor
                an opportunity to conciliate additional violations identified in the
                Notice of Violation or Show Cause Notice. Any response to a
                Predetermination Notice must be received by OFCCP within 15 calendar
                days of receipt of the Notice, which deadline OFCCP may extend for good
                cause. If the contractor does not respond or OFCCP determines that the
                contractor's response did not resolve the indicators of discrimination
                in the Predetermination Notice, OFCCP will proceed with the review.
                 (b) Notice of Violation. If a compliance evaluation by OFCCP
                indicates a violation of the equal opportunity clause, OFCCP will issue
                a Notice of Violation to the contractor requiring corrective action and
                inviting conciliation through a written agreement. The Notice of
                Violation will identify the violations and describe the recommended
                corrective actions. After the Notice of Violation is issued, OFCCP may
                include additional violations in a subsequent Show Cause Notice without
                amendment to the Notice of Violation. OFCCP will provide the contractor
                an opportunity to conciliate additional violations identified in the
                Show Cause Notice.
                 (c) Conciliation agreement. If a compliance review, complaint
                investigation, or other review by OFCCP or its representative indicates
                a material violation of the equal opportunity clause, and:
                 (1) If the contractor, subcontractor, or bidder is willing to
                correct the violations and/or deficiencies; and
                 (2) If OFCCP or its representative determines that settlement
                (rather than referral for consideration of formal enforcement) is
                appropriate, a written conciliation agreement shall be required. The
                agreement shall provide for such remedial action as may be necessary to
                correct the violations and/or deficiencies identified, including, where
                appropriate (but not limited to), remedies such as back pay, salary
                adjustments, and retroactive seniority.
                 (d) Remedial benchmarks. The remedial action referenced in
                paragraph (c) of this section may include the establishment of
                benchmarks for the contractor's outreach, recruitment,
                [[Page 16155]]
                hiring, or other employment activities. The purpose of such benchmarks
                is to create a quantifiable method by which the contractor's progress
                in correcting identified violations and/or deficiencies can be
                measured.
                 (e) Show cause notices. When the Director has reasonable cause to
                believe that a contractor has violated the equal opportunity clause the
                Director may issue a notice requiring the contractor to show cause,
                within 30 days, why monitoring, enforcement proceedings, or other
                appropriate action to ensure compliance should not be instituted. OFCCP
                may issue a Show Cause Notice without first issuing a Predetermination
                Notice or Notice of Violation when the contractor has failed to provide
                access to its premises for an on-site review or refused to provide
                access to witnesses, records, or other information. The Show Cause
                Notice will include each violation that OFCCP has identified at the
                time of issuance. Where OFCCP identifies additional violations after
                issuing a Show Cause Notice, OFCCP will modify or amend the Show Cause
                Notice.
                 (f) Expedited conciliation option. OFCCP may agree to waive the
                procedures set forth in paragraphs (a) and/or (b) of this section to
                enter directly into a conciliation agreement with a contractor. OFCCP
                may offer the contractor this expedited conciliation option, but may
                not require or insist that the contractor avail itself of the expedited
                conciliation option.
                Sec. 60-741.64 [Removed and Reserved]
                0
                29. Remove and reserve Sec. 60-741.64.
                0
                30. Add Sec. 60-741.84 to read as follows:
                Sec. 60-741.84 Severability.
                 Should a court of competent jurisdiction hold any provision(s) of
                this part to be invalid, such action will not affect any other
                provision of this part.
                [FR Doc. 2022-05696 Filed 3-21-22; 8:45 am]
                BILLING CODE 4510-CM-P
                

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