Ofccp enforcement trends 03 21_13_webinar deck

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Ofccp enforcement trends 03 21_13_webinar deck

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  2. 2. The information in this PowerPoint and related presentationis for general informational purposes only. These materials and the presentation are not intended to provide legal advice and do not establish an attorney-client relationship where none currently exists. This material may not be copied, reproduced, or used without permission of the author.
  3. 3. Represents management exclusively in every aspect ofemployment, benefits, labor, and immigration law andrelated litigationOver 700 attorneys in 51 locations nationwideCurrent caseload of over 5,000 litigations andapproximately 300 class actionsFounding member of L&E Global 3
  4. 4. Using specially designed proprietary software, our diversepractice group of 40 lawyers and paraprofessionalsprepares over 2,200 affirmative action plans (“AAPs”)annually for our federal contactor clients. We defendagainst the imposition of citations and allegations ofdiscrimination in connection with audits by the Office ofFederal Contract Compliance Programs (“OFCCP”) andoffer liability avoidance services, including vulnerabilityaudits and statistical analyses employing the methodologyused by the OFCCP to identify potential discrimination. 4
  5. 5. New Compensation Directive 307Criminal Background ChecksGood Faith Efforts to Recruit Veterans andIndividuals with DisabilitiesHiring Cases: The Agency’s Bread and ButterSteps To Take Now To Proactively Prepare
  6. 6. Pay equity initiatives at OFCCP are notnew…remember these . . . ? Glass Ceiling Initiative The DuBray Analysis Compensation Standards and Voluntary Guidelines 6
  7. 7. President Obama’s Equal Pay Task Forceo The Obama Administration’s National Equal Pay Enforcement Task Force includes the DOL (OFCCP), EEOC, the Department of Justice and the Office of Personnel Management designed to address issues of pay inequityLilly Ledbetter Fair Pay ActPaycheck Fairness Act (proposed)OFCCP recently announced the hiring of a laboreconomist!In short, your pay processes are under a microscope! 7
  8. 8. The Persistent “Wage Gap” Between Men andWomeno Top-down direction to enforcement agencies to find new tools in the “tool box” to correct this “wage gap” 8
  9. 9. Settlements for alleged discriminatory pay are on therise. . .o FY 2008 – 0 pay settlementso FY 2009 – 2 pay settlementso FY 2010 – 10 pay settlementso FY 2011 – 27 pay settlementso FY 2012 – 32 pay settlementsMostly from individual or small group findings 9
  10. 10. OFCCP rescinds 2006 Standards and Voluntary Guidelines… Issues “Game-Changing” Compensation Directive 10
  11. 11. Highly Coordinated Roll-outo Rescission of 2006 Standards and Issuance of Directive 307o Webpage: www.dol.gov/ofccp/regs/compliance/CompGuidance/o FAQs and Fact Sheeto Press release and blog by OFCCP Directoro Immediate Field Training 11
  12. 12. Directive 307 is not a regulation. See United SpaceAlliance, LLC v. Solis (D.D.C. 2011). o It is not law. It is considered “persuasive authority” in court…meaning courts are not bound to follow it o Directives are not subject to the Paperwork Reduction Act, so there is no notice and comment period, nor is there review or approval by the U.S. Office of Management & Budget (“OMB”) 12
  13. 13. Effective as of February 28, 2013, the date of publicationo 2006 Standards govern “issuance of systemic discrimination NOVs” in reviews scheduled, open or pending on 2/28/2013o Directive 307 applies to (1) all reviews scheduled on or after 2/28/2013 and (2) all pending reviews to the “extent not inconsistent with the Standards” 13
  14. 14. OFCCP will use a variety of statistical and non-statistical tools on a case by case basis o Multiple regression o Fisher’s Exact o Cohort analysis o Anecdotal with statistics o Anecdotal without statistics o Statistics without anecdotalOFCCP wants to investigate total compensation o Incentive Pay, Commissions, Overtime, Shift Differentials, Vacation and Holiday Pay, and BenefitsOFCCP wants to look at issues that impact pay o Promotions, Performance Review Process, Training, Job Steering, Glass Ceiling 14
  15. 15. 1. Conduct Preliminary Analysis of Summary Data (if necessary or appropriate)2. Conduct an Analysis of Individual Employee-Level Data3. Determine Approach from a Range of Investigative and Analytical Tools4. Consider All Employment Practices that May Lead to Compensation Disparities5. Develop Pay Analysis Groups6. Investigate Systemic, Small Group and Individual Discrimination7. Review and Test Factors before Accepting the Factors for Analysis8. Conduct Onsite Investigation, Offsite Analysis, and Refinement of Model 15
  16. 16. Step 1 - Preliminary Analysis of Item 11 Datao Must submit by job group or salary grade/band or OFCCP will request individual datao Snapshot for compensation must be date of organizational profileo Triggers used by OFCCP are currently unknown, appears to be pass/failo Qualitative Factorso Quantitative Factors • Size of overall average pay differences • Largest pay difference • Number of employees affected by average pay difference • Number of job groups or grades where average pay differences exceeds certain threshold 16
  17. 17. Step 2 – Request Individual Compensation Datao Requests will be similar to current 12-factor requestso Most likely for entire workforce at establishmento Must submit data electronicallyo Information regarding factors impacting pay and pay policieso Examination of practices affecting compensation • Work assignments • Training • Job classifications • Promotions • Preferred shift or overtime work 17
  18. 18. Step 3 – Group individual data into groupings of OFCCP’s choosing o Case by case approach to analyses - seeking to identify “measurable differences” in pay on the basis of protected traits between employees who are “comparable” under the contractor’s pay system o No more SSEGs – group into “pay analysis groups” – Groupings at discretion of CO – BEWARE - May cross job title, group, grade, band or level – Will control for dissimilarity in jobs in statistical analysis rather than in groupings o No need for anecdotal evidence 18
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  20. 20. Step 4 - Review and test factors impacting payo Factors used in analysis will be determined by OFCCPo May remove factors if: • not represented by accurate and complete data • not identified as a factor impacting pay in written policies • not fairly implemented • not consistently applied • not statistically correlated with pay • have adverse impacto If factor has adverse impact, OFCCP will determine whether the issue is one of disparate treatment or impacto If disparate impact, OFCCP will seek data regarding (1) validity and (2) consideration of alternatives with less impact 20
  21. 21. Step 5 – Refinement of modelo Onsite investigations and interviewso Offsite data analysisKey Questions1. Will the agency keep looking until it can explain all measurable pay disparities for comparable positions?2. When the will agency stop? 21
  22. 22. Inconsistent results among locations of same contractorAggressive pursuit of much broader audits ofcompensation practicesMultiple refinements of dataSignificant increase in costs to defend auditsSignificantly reduced ability to predict compliance 22
  23. 23. Do your homeworkShare your homework with legal and compensation teamsReview currently-approved scheduling letter and OFCCP initial requestscarefullyReview written pay policiesReview and strategically revise current AAP job group structure o Are you using EEO-1 categories? o How big are your job groups? o Are you grouping employees who are similar or dissimilar in terms of pay? 23
  24. 24. Validate processes that impact payImprove your recordkeeping about pay factorsConduct self-analyses of pay under privilege o Use model that makes sense for your pay system o Consider reviewing total compensation o Decide when and if you will share your self-analyses with the OFCCP o Anticipate but do not match OFCCP’s approach 24
  25. 25. Adopts EEOC’s new guidance on criminal background checkso Individualized assessment of job-relatedness of conviction to the job for which the candidate appliedo Where disparate impact occurs, employers must validate their criminal background check policiesWhat to Doo Ensure use of criminal history is job-related and consistent with business necessityo Tailor criminal history screens to the situationo Periodically conduct adverse impact analyses of criminal history screens - if adverse impact occurs, consider validation or changes to the company’s approach to criminal conduct exclusionso Train staff on how to use and interpret criminal history informationo Review applications for “ban the box” implications 25
  26. 26. OFCCP is now aggressively scrutinizing employer’s good faithoutreach efforts to the female, minority, veteran, and disabledcommunitiesEmployers must be able to demonstrate a commitment to outreach.Employers who appear to have just gone through the motions willface greater scrutinyOFCCP now regularly demands detailed information on how manyapplicants were referred by diversity recruitment sources and ofthese, how many were interviewed, hired, etc.If OFCCP finds the contractor was deficient in recordkeeping and/oroutreach, the Agency will issue technical violations 26
  27. 27. In the past, the OFCCP focused on goals and good faithefforts to address areas of underutilization.Then, the agency began to focus more on adverseimpact trends (especially applicant-to-hire adverseimpact)o Traditionally, analyzed how minorities and females fared in the employer’s hiring process as compared to Whites and malesNow, the agency is following the numberso “Reverse” adverse impacto Sub-minority adverse impact 27
  28. 28. 4 Traditional Analyses 8 “All Other” Analyses 20 “Sub-Minority” AnalysesThat’s 32 ways to trigger in each job group! Take a moment to think about how many job groups you have… If you have ___ job groups, the OFCCP will run: o 5 job groups: 160 analyses o 10 job groups: 320 analyses o 15 job groups: 480 analyses o 20 job groups: 640 analyses!! 28
  29. 29. Affirmative Action is really “Proactive EEO”o AAPs should be strategic tools to identify and address “hidden barriers” to EEOo Don’t wait for audits; that’s too latePrivileged pay equity analysesConduct mock auditsPerform sub-minority analyses 29
  30. 30. Use strategic disposition codes that identify the step and reasoneach candidate “fell out” of your hiring processReevaluate use of pre-employment screensEnsure that you are posting jobs with stateDocument and audit all good faith efforts and develop relationshipswith referral organizationsAudit reasonable accommodation procedures o Online accessibility o Leave and accommodation examplesPrepare AAP packet to send to OFCCP that includes items youknow they want to see 30
  31. 31. Thanks for attending! Lynn A. Clements Jackson Lewis LLP Lynn.Clements@jacksonlewis.com (410) 415-2009 MAXIMUS Inquiries:businessandtaxcredit@maximus.com Kitty Leggieri: (410) 949-7377 31
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