Federal Court Rules for OFCCP in Fight Against Hospitals - Is Your Hiring System Ready for an Audit?

The OFCCP's Position.  The Labor Department's Office of Federal Contract Compliance Programs (OFCCP) has long argued that it has jurisdiction over hospitals.  Jurisdiction means hospitals must comply with all of the agency's rules regarding workplace discrimination and are subejct to audits and penalties for failure to comply.  Hospitals have been arguing (and litigating) against OFCCP oversight, but the OFCCP argues that hospitals are covered as Federal contractors or sub-contractors.

  • Previously, a Small Victory for Hospitals.  In December 2010, the OFCCP took the position that hospitals were subject to their jurisdiction as a result of contracts to provide care under TRICARE, the federal government's healthcare program for active duty and retired military and their families.  Congress and the President stepped in to provide some relief.  President Obama signed the National Defense Authorization Act for Fiscal Year 2012.  Section 715 of the bill states that network providers and providers of medical service are not subcontractors that are subject to OFCCP jurisdiction based solely on TRICARE participation.  The law did not affect other bases for coverage, such as contracts with the Veterans Administration, the Department of Defense, or other federal agencies.

  • Recent Victory for the OFCCP.  Now the U.S. District Court for the District of Columbia has ruled that the agency has jurisdiction over hospitals that supply medical services to a health maintenance organization (HMO), which contracts with the federal government to provide medical care for federal employees.  This is yet another blow to hospitals in this fight.  Litigation in this case, and others, is likely to continue, but it is not looking promising for hospitals hoping to avoid OFCCP scrutiny of their selection practices.

Are You Ready for an OFCCP Audit?  As of now and for the foreseeable future, OFCCP auditors are free to delve into your hiring decisions.  They will be looking for evidence of adverse impact, of adequate documentation of hiring and promotion decisions, and whether your selection practices give even the appearance of being unfair to protected groups.  The best way to avoid OFCCP sanctions is to ensure that your hiring and selection system is fair, consistent, properly documented, and uniformly applied.  This includes:

  • a standardized interviewing program
  • using job-related questions
  • tracking all placement decisions (and non-decisions)
  • thorough training of all hiring managers in administering an effective and legal interview

We also recommend conducting a thorough job analysis and using behavioral assessments, designed specifically for selection, that are grounded in the OFCCP's Uniform Guidelines.

Learn more about healthcare focused assessments.
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