2012 ILG National Conference Recap
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2012 ILG National Conference Recap



Presentation by Deb Dennin and David Goldstein at the November meeting of the MN AA Compliance Council

Presentation by Deb Dennin and David Goldstein at the November meeting of the MN AA Compliance Council



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  • According to the Policy and Programs Office, they are changing the way the CSALs will be administered. That’s about it!
  • The overwhelming theme was that given the pending elections, everything is in a holding pattern. The OFCCP put out a number of proposed regulations, mostly in 2011, that seem to have gone nowhere given here we are over a year later and nothing has changed. We have sort of timelined the various proposals out there to demonstrate that, starting with the proposedvets regs in April 2011 to the proposed disability regs put out in December 2011. We even heard last year at the National ILG that the Federal Contract Compliance Manual was basically complete in July 2011, but still haven’t seen anything yet.
  • Thus, several presenters speculated on what was going to occur with these proposed changes. Most agreed nothing would happen before the election, in which they were right. Some thought that the veterans regulations may be released prior to the November presidential election, which we did not see, or that they may get out the door in December, which we should find out here within the next month, although John Fox heard the vets regs were on Debra Carr’s desk, who is the Director of the Division of Policy, Planning and Program Development at the OFCCP, so that they couldn’t get published that quickly. (Not sure what the process is) There was some feeling among the presenters that some initiatives will not move forward at all. I’ve captured some of the thoughts of two of the presenters directly with respect to their predictions based upon the election results. From Fox’s presentation If President Obama wins in November, the big question will be whether the Republicans take the Senate in addition to the House. OFCCP will face hostile Congress and will be moribund. If President Obama wins in November, but Democrats keep the Senate, OFCCP’s regulatory program will slowly get done, but with numerous compromises and changes. If Mr. Romney wins in November, OFCCP’s regulatory program will come to a hard stop, although Pat Shiu will likely try to get at least her Veteran’s regulations out the door in early December. OFCCP’s audit processes will become more standardized, predictable and transparent. OFCCP’s burdensome adventure with compensation audits will end.
  • We/They mentality - OFCCP was absent from the conference. Patricia Shiu delivered a pre-recorded address that was lackluster and didn’t reaaly share anything or given contractors a sense of what to expect. They have more COs, but are not getting a monetary return on that investment, but rather are burying themselves in paperwork. We’ll talk about some of those results. Sandy Ziegler, former Midwest Regional Director, - Felt proposed regs don’t necessarily serve purpose EEO/AA is trying to accomplish. They basically make it simple to cite contractors because there is no way to easily do what is being asked of contractors. Also a major setback in the comp area, which we’ll discuss a little bit more, so let’s dive into some of these a bit more deeply.
  • The overall feeling was that since Obama took office, the OFCCP has not been as effective and the financial recoveries show that. Even though the majority of audits under the Bush administration resulted in no findings (85%-93%), Charles James has the best record of monetary recoveries and he did it with fewer compliance officers. Under the Obama administration, nearly 25% of the audits close with a notice of violation, but they are technical violations so the OFCCP is simply burying themselves in paperwork. There is a difference across the regions with respect to the notice of violation ratio. There is a slide in the appendix that shows all of the regions, but this shows the highest, lowest and where the Midwest falls.
  • Just another interesting note or difference between the two administrations is that the type of violations has flip flopped between recordkeeping and Outreach. I think contractors are really feeling that in their audits with a heavy focus on veterans and individuals with disabilties.
  • The bottom line is that these technical violations aren’t producing any monetary recoveries. The bread and butter of monetary recoveries is disparate treatment in entry level hiring as 95% of financial recoveries come from this, but the OFCCP seems to have been focusing its efforts on compensation, veterans and individuals with disabilities, which simply have not produced significant financial recoveries or benefits. As you can see, of the 22,000 complaints against vets and individuals with disabilities, only 3 were valid. Bottom line is Section 503 and VEVRAA don’t produce backpay
  • As for all of the compensation reviews where we have been subjected to submitting our line item data, this hasn’t recovered many dollars either. The thought was that OFCCP was desperate for a comp settlement and may be on the hunt for a big one to make up for what they have lacked so far.
  • There was some news however around the whole compensation review piece hitting a major roadblock and the news was just “released” prior to the conference.
  • Simply my notes from the session on things I found interesting. Found it interesting that many countries have hiring quotas around individuals with disabilities. As contractors, we know something of this sort m may be looming in our future, so perhaps there is something we can learn from these countries and how they do it. I think the last bullet really goes without saying as we all know in the work that we do if we find issues, whether that be adverse impact in promotions or disparity in pay, we need to do something once we uncover an issue, we can’t just ignore it.
  • Presidential outcome may drive the implementation date.
  • For example – if you are a medical institution you will want to break out RN from Nurse anesthetists and Nurse Practitioner

2012 ILG National Conference Recap Presentation Transcript

  • 1. 2012 National ILG RecapThemes & Presentation Summaries
  • 2. Themes1. Not much is new2. OFCCP is in a holding pattern3. OFCCP is “Screwed up”Presentations Summaries1. Nita Beecher, Mercer – Workforce Metrics in the Global Environment: Best Practices for Employer2. Beth Ronnenburg, Berkshire Associates Inc.- New Census Data and AA Compliance-Understanding the Impact3. David Goldstein, Littler – OFCCP’s New Scheduling Letter: Anticipating the New Desk Audit Submission4. John Fox – Recent Significant Developments at OFCCP
  • 3. Theme #1 - What is new?• Changes to the Corporate Scheduling Announcement Letter (CSAL) ▫ Rather than a letter, in 2013 the OFCCP will provide a list on the internet.  Eliminates their need to follow up with contractors, as 80% of the time those who requested letter didn’t receive one.• Possibly could issue CSAL this year, but would be via the normal process.
  • 4. Theme #2 - OFCCP in holding pattern• April 2011 - Proposed revisions to the veterans regulations• August 2011 – Advanced notice of proposed rulemaking released regarding possible changes to OFCCPs guidance regarding compensation• September 2011 - Proposed Scheduling Letter changes and the itemized listing that accompanies the scheduling letter• December 2011 - Proposed revisions to the regulations regarding persons with disabilities• The proposed changes to the federal contract compliance manual that have been in the works for several years (and that were reportedly complete as of the July 2011 NILG conference in New Orleans)• Changes to the regulations regarding construction contractors (no formal OFCCP proposal yet)• Changes to OFCCPs regulations on sex discrimination (no formal OFCCP proposal yet)
  • 5. Predictions• Most agreed that no initiatives are likely to move forward until after the election.• Veterans regulations may be released prior to the November presidential election or get out the door in December • John Fox heard Veterans regulations were on Debra Carr’s desk (not even at OMB) so they can’t get published.• Some initiatives will not move forward at all.• John Fox predictions • If Romney wins, all regulations stop, except the vets may be out the door in December. Burdensome comp requests will end and you will see more transparency. • If Obama elected and Republicans take Senate, the OFCCP will be moribund (in a dying state) • If Obama elected and Democrats keep the Senate, programs will slowly get done, but with numerous compromises and changes.• David Cohen predictions if Obama wins… • Some pay cases will be deferred to Dept of Justice • Increased focus on pay • OFCCP will ask companies if they did a proactive comp analysis • Pooled regression analysis is going to happen with SSEG as a variable
  • 6. Theme #3 - OFCCP is Screwed up• We/They mentality more than ever• Not getting the return on their investment of time or resources ▫ More compliance officers - increased from 585 to 798 FTEs – but fewer monetary returns ▫ Proposing regulations that don’t necessarily advance Equal Opportunity, but rather give reason for recordkeeping violations – burying themselves in paperwork• Compensation review incurred major setback
  • 7. OFCCP Statistics by Administration• Bush Administration (2004-2008) 85-93% of audits were closed without notice of violation – Charles James (from Bush administration) had best record in monetary recoveries doing fewer audits and having fewer compliance officers.• Obama Administration (2009-2011) 72-82% of audits were closed without notice of violation • Essentially 1 in 4 ends in a conciliation agreement, resulting in a negative correlation between CAs and financial remedies relative to the Bush administration. – Differences in enforcement amongst regions (See Appendix): • SWARM – 5% CAs • Northeast and Mid-Atlantic– 34% CAs • Midwest – 31% CAs
  • 8. OFCCP Statistics by Administration• The type of conciliation agreements/consent decree has flip-flopped between administrations: ▫ 2008 CAs – 60% recordkeeping, 26% outreach ▫ 2011 CAs – 26% recordkeeping, 58% outreach
  • 9. Show me the money – ROI?• Bread and butter of monetary recoveries is disparate treatment in entry level hiring (95% of findings).• Section 4212/503 Enforcement – Between 2007 – 2011, there were 22,000 complaints of discrimination against vets and individuals with disabilities, of which only 3 claims were found to be valid. Don’t produce backpay.
  • 10. Show me the money – ROI?• OFCCP is desperate for a comp settlement – they have spent a lot of money on increased review, but haven’t recovered the money. • Approximately 1/3 of all CAs last year involved compensation • No pattern of industry or job type • 27 comp cases in 2011 • 1 was Astra Zeneca for $250,000 • 26 of 27 cases were cohort analysis payouts – Most settlements were between 1-3 victims – 2 appeared to collect remedies for men (contrary to the government’s goal of closing the gender pay gap) – 1 did not list a protected class, but just said person x made less than others. – Cohorts are an audit nuisance. If the OFCCP says you should make an adjustment, you can say “No. Show us the intent to discriminate.” Never seen a cohort case go to the solicitor’s office
  • 11. Compensation Review Setback• The NAS National Research Center was asked to review OFCCP’s method for measuring and collecting compensation data.• The National Academy of Sciences National Research Council (NRC) is suggesting OFCCP (and other federal agencies) should limit their collection of compensation data until the government knows how this data will be kept safe and how it will be effectively used.• Forget paragraph 12 of new scheduling letter. This NRC report may act as a significant barrier to the implementation of any new compensation-related initiative. MAJOR SETBACK of estimated 4-6 years!!!• Basic findings of the NAS NRC is that the OFCCP needs to pull back, develop better plan, pilot the plan, test it using an independent contractor, find ways to better protect confidentiality of data and develop legislation to increase the ability of the agency to protect confidential data.
  • 12. Suggested action• Federal contractors should get more involved in helping with the regulations
  • 13. ILG Presentation ReviewsNita Beecher, Mercer•Workforce Metrics in the Global Environment: Best Practices for EmployersBeth Ronnenburg, Berkshire Associates Inc.•New Census Data and AA Compliance-Understanding the ImpactDavid Goldstein, Littler•OFCCP’s New Scheduling Letter: Anticipating the New Desk Audit SubmissionJohn Fox•Recent Significant Developments at OFCCP
  • 14. WORKFORCE METRICS IN THE GLOBALENVIRONMENT:Best Practices for Employers Nita Beecher and Liz MacGillivray Thursday, August 30, 2012 2012 ILG National Conference Waikoloa, Hawaii
  • 15. Global Workforce Metrics Notes• Global companies typically prepare a Global Cultural view (e.g. respecting differences), not necessarily requiring the same EEO policy. ▫ In Asia, diversity is a new concept, not always culturally understood.• Tracking women is the #1 item tracked globally. Next would be disability• In many countries (Brazil, Turkey, Vietnam, Cambodia, Malaysia, Ethiopia, Spain, Jordan, Thailand), you have to hire a certain % of individuals with disabilities based on the number of employees you have or you can be fined.• Bullying (aka: being a jerk) can violate law in other countries (e.g. Belgium, France, Brazil)• If you are going to measure diversity, be prepared to do something if you find an issue
  • 16. New Census Data and AA Compliance Understanding the Impact Beth A. Ronnenburg, SPHR August 30, 2012
  • 17. EEO 2006-2010 ACS Tabulation• Formerly known as the EEO Special File• Provides ethnicity, race and sex civilian workforce data mapped to occupational data• Used to create external availability statistics for affirmative action planning
  • 18. EEO 2006-2010 ACS Tabulation• Includes data based on geography, industry, age, educational attainment, median earnings and citizenship• Sponsored by OFCCP, EEOC, DOJ & OPM• Data will be disseminated through American FactFinder ▫ Most contractors will rely on their AAP vendor to format the data for them
  • 19. Current Status• Scheduled to be released end of Nov or beginning of Dec, 2012• OFCCP will then issue a directive indicating when contractors will need to begin using the data – The 2000 EEO Special File was released in December 2003 & OFCCP required contractors to use the data for plans on or after January 1, 2005
  • 20. Census Occupation Codes • Similar to 2000 • 488 codes in the latest file (6/18/12) • Four digits versus three in 2000 data ▫ In most cases the only change is that a zero is added to the end of the code  012 Financial Managers is now 0120 Financial Managers • Approximately 80% are an exact match to 2000 ▫ Other 20% are new codes, codes that were split and codes that were combined
  • 21. What can you do to prepare? • Contractors who store the census code in their HRIS should ensure that field size can accommodate the change • Review the crosswalk, but don’t rely solely on the document ▫ There are 28 2010 census codes that are NOT directly mapped to a 2000 Census code.
  • 22. Disability • Originally told it could not be included because: ▫ Same questions were not asked each time ▫ Research was not conducted on 6 questions that might be used to identify those who had a “disability” • Information on “disability” will be available from a series of tables created by DOL (ODEP & OFCCP) and will be released at the same time
  • 23. 2010 Census• Population increased 9.7% (27.3M) ▫ More than ½ of the growth was due to increase in Hispanic population (15.2M)• Regional growth varied ▫ South/14.3% ▫ West/13.8% ▫ Midwest/3.9% ▫ Northeast/3.2%
  • 24. Population – Gender (ages 20-69)
  • 25. 2010 Population - Race
  • 26. 2010 Population - Race • Minority population grew 28.8% while White alone, Not Hispanic grew only 1.2% • Hispanic and Asian population have the highest growth rates (~ 43%) • The Black population experienced the 2nd smallest growth rate (12%)
  • 27. Regional Minority Population
  • 28. Regional Minority Population • Texas joined California, DC, Hawaii and New Mexico in having a “majority-minority” population • Minority population grew in all 50 states ▫ Nevada increased the most (78%) • 348 counties (11%) now have a majority- minority population
  • 29. OFCCP’s New Scheduling Letter:Anticipating the New Desk AuditSubmission
  • 30. 30Recommendation #1 - Summaries• For the annual AAP, continue to prepare summaries of applicant, hire, promotion and termination data by minority/nonminority groups.• The regulations prescribing the required contents of written AAPs have not changed in Part 60-2, and they speak only in terms of females and all minorities.• Section 60-2.17: “must perform in-depth analyses of its total employment process” and “must evaluate . . . Selection, recruitment, referral and other procedures to determine whether they result in disparities in the employment or advancement of minorities or women.”• Itemized Listing, footnote 6: “The term ‘race/ethnicity’ as used throughout the Itemized Listing includes these racial and ethnic groups: African-American/Black, Asian/Pacific Islander, Hispanic, American Indian/Alaskan Native, and White.”
  • 31. 31Recommendation #2 - IRAs• Under the protection of attorney-client privilege, prepare job group impact ratio analyses: ▫ Minority versus White (the way the summaries appear in the AAP) ▫ Each race versus White ▫ Each race versus its non-race (but excluding 2 or more races)  Hispanics versus non-Hispanics (including Whites)  Blacks versus non-Blacks (including Whites), etc.  Will tell you which is the most-favored race ▫ Every other race versus most favored race• Prepare impact ratio analyses by title ▫ If a job title has fewer than 5 selections, not critical to run title by title analyses
  • 32. 32Recommendation #2 (cont’d)• Under the protection of attorney-client privilege, if a job group or job title shows a statistically significant impact, look for simplest explanations first ▫ control for job requisition or job opening ▫ don’t lose sight of statistical significance—the 1/20 or 5% threshold  may be a function mostly of running so many analyses  the more you run, the more likely one or more will “pop”  difference between 2 standard deviations and 3+ standard deviations
  • 33. 33Recommendation #3 –Promos and Terms (cont’d)• Pools ▫ Promotions  only competitive (applied for) promotions will have specific pools  possible default pool for noncompetitive promotions, beginning of the year population in the job group or job title, with or without hires (?) ▫ Terminations  RIFs often will have specific pools  other involuntary (for cause) termination likely will not  default pool could be beginning of AAP year snapshot of job group/title, with or without hires (?)
  • 34. 34Recommendation #4 –Retrievability• Do you currently track this data for contractors, per- diems, day-laborers, and temporary employees? If not, do so now.• Ensure that HRIS, payroll, performance records, executive compensation, stock awards, bonuses, incentives – all the various tracking systems can “talk to each other” so you can pull the “other” compensation data• Implement the means to capture 12 months of the non- base salary data going back to February 1 of the prior year
  • 35. 35Recommendation #5 –Comp Data and Policies• Assess what other data you maintain reliably, consistently, and how retrievable it is ▫ Education ▫ Prior work history ▫ Company work history ▫ Company compensation history ▫ Performance ratings ▫ Merit Increases ▫ Initial Starting Salary• Whose pay is set pursuant to collective bargaining?• Assess what policies and compensation documentation exists ▫ Up to date? Accurate? ▫ Reflective of current practices?
  • 36. 36Recommendation #6 –Comp Analyses• For non-audits (routine AAPs), continue to run these simply because despite all the activity by OFCCP on comp, most compensation audits wind up focusing on specific job titles and the company’s ability to explain pay variations within the job title• Under the protection of attorney-client privilege (and if you have the budget) ▫ Self-evaluate the variables in a regression analysis• How should you submit data at the desk audit?• What data should you submit at the desk audit?
  • 37. 37Recommendation #7 - CBAs• Ensure that company labor relations officers know about your need to produce this information in OFCCP audits• Develop a mechanism to keep track of all “policy statements, employee notices or handbooks” that “implement, explain or elaborate” on the CBA.
  • 38. 38Recommendation #8 – Leave Policies• Identify relevant leave policies• Who “owns” the handbook and its updates? Ensure that the “owner” of the process and/or the updates on your company intranet know about your need for this information in an OFCCP audit• If you maintain your policies on your company Intranet, how easy or hard would it be to pdf the relevant pages as part of an audit? If time consuming, make a pdf of them, now.• Are they current?• Are they accurate?• Keep in mind that because AAPs go one year back (and in an audit OFCCP is entitled to 2 years back), you need to keep track of policies that were in effect at the time of the data capture and personnel actions
  • 39. 39Recommendation #9 - VETS ReportsVETS forms for the last two years:Copies / Viewing of Filings2011 Filing Cycle 2010 Filing Cycle or Earlier • Contractors will have the ability to • Copies of previously submitted reports view the reports that they submitted for the 2010 filing cycle or earlier are and will not be able to view those of not available in the VETS100 online other contractors. Copies may be reporting application. They can only printed using the VETS100 online be obtained through a Freedom of reporting application by the end user Information Act (FOIA) request. only. Please go to the US DOLs FOIA • Hard copies for contractors other than homepage for instructions on how to the submitting contractor can be do this at: www.dol.gov/dol/foia/. obtained only through a Freedom of • Submit your FOIA requests, now. Information Act (FOIA) request. Please go to the US DOLs FOIA homepage for instructions on how to do this at: www.dol.gov/dol/foia/.
  • 40. 40Recommendation #10 –Track Accommodations• Who “owns” the accommodation process, now?• Limited to ADA accommodations, or broader?• Note: Itemized Listing 13 asks only for accommodations granted; it does not ask for all accommodations requested• Ensure that the accommodation process owners know that “records of accommodations granted” will be needed for a desk audit submission
  • 41. Recent Significant Developmentsat OFCCP August 30, 2012 John C. Fox, Esq. Fox, Wang & Morgan P.C. 160 W Santa Clara Street Suite 700 San Jose, CA 95113
  • 42. Battle Front 1: THE BIG PICTURE 421. It remains all (and almost ONLY) about failure to hire Entry-level, unskilled Production Labor (95% of OFCCP’s historic back pay collections)2. Compensation audits are very expensive to defend these days, but are not producing much back pay.3. OFCCP’s Construction Program has found no unlawful discrimination in 20 years. Program is in shambles, and suddenly becoming unnecessarily very burdensome in audits.4. OFCCP’s Section 503 program has found very little unlawful discrimination in the 20 years since the ADA became law. (OFCCP’s 503 program used to be robust, but is now in shambles. EEOC is now annually collecting hundreds of millions of back-pay $ in ADA settlements/judgments/verdicts. Should OFCCP’s controversial proposed regulations go to final, compliance costs will increase by hundreds of thousands of dollars/yr for most federal contractors.)
  • 43. Battle Front 1: THE BIG PICTURE (Cont.)5. OFCCP’s VEVRAA program lacks unlawful discrimination authority, has produced very little back- pay over the decades as a result, or jobs for veterans, and is in disarray despite the strong desire of contractors to hire veterans.6. Most of us are slogging through terribly lengthy audits which don’t matter much, but are increasingly expensive and frustrating to defend.7. Vendor profits are up; contractor satisfaction is down; the high pace of OFCCP turnover of its personnel and the cost-benefit ratio of OFCCP continue to be lively subjects of discussion.
  • 44. Battle Front 3: Regulatory Revisions: Full StopApril 2012 Review Of OFCCP’s July 2011 “To-Do” List1.Publish Advance Notice of Proposed Rulemaking (ANPRM) re“Compensation Data Collection Tool”: by July 2011 (Done: August 10,2011)2.Publish a Notice of Proposed Rulemaking (NPRM) re Section 503: byAugust 2011 (Done: December 9, 2011) ● This proposal “ripped the fabric” of trust, in my observation, between OFCCP and the contractor community which perceived this proposal to cover-up hundreds of millions of dollars of costs and thus tore at OFCCP’s integrity and sense of partnership. ● Note: Applied Economics Strategies, LLC, founded by a former Bush Administration appointee, issued a report on July 19, 2012 estimating OFCCP’s Section 503 regulation would cost in fact, $5.9 Billion with an annual recurring cost of $2.68 Billion per year.
  • 45. 45Battle Front 4: Litigation
  • 46. 46Battle Front 4: Litigation (Cont.)
  • 47. 47Battle Front 5: AuditsI. OFCCP has issued several new audit instructions (Cont.) B. Substance changes (Cont.) 9. Contractor outreach to the Disabled and Protected Veterans communities which satisfied Clinton/Bush Administrations suddenly no longer compliant  So, what is required this month? ▫ OFCCP is not enforcing proposed regulations ▫ Subjective, how deep is your relationship with your newbie Compliance Officer?
  • 48. 48Battle Front 5: Audits (Cont.)III. New Audit Protocols In Chicago (Cont.) ▫ MWRO now finishing the 830 audits (in FY 2012) MWRO had scheduled on June 3, 2011 (in FY 2011) and which OFCCP National Office formally pulled back on June 17, 2011  This action conflicts with OFCCP’s announced intent to retire each year’s audit list at end of each Fiscal Year  Why?  This is not a legal problem, in my judgment.
  • 49. The Fox OFCCP Report 49• For my monthly “Fox OFCCP Report”, you may ask the Local Job Network to put you on a free subscriber’s list: http://www.localjobnetwork.com/articles or• Simply type “Fox Wang” in your Internet browser and go to our Law Firm’s Blog Spot.• For Today’s Power Points: 1. Put “Fox Wang” in your browser (www.foxwangmorgan.com/) 2. Select: “Publications” on landing page 3. Select: 2012 NILG (John C. Fox) Power Points • USERNAME: = fwm1one • PASSWORD = fwm2two
  • 50. Appendix