Everyone is talking about pay discrimination these days. Even the Presidential candidates (and their running mates) are focused on the persistent pay gap and their plans for addressing pay in the workplace over the next four years. Regardless of which party wins the election, it is clear compensation will remain in the spot light.
It also remains clear that investigating pay discrimination will continue to be a top enforcement objective for OFCCP for the foreseeable future . . . regardless of who’s sitting in the White House. During compliance reviews, we are seeing OFCCP turn to issues related to compensation faster and with more vigor than ever before.
Not only are federal contractors required (under the auspices of Executive Order 11246) to review their compensation systems on an annual basis, but EEOC’s (and private plaintiffs’) current focus on identifying pay discrimination means all employers nationwide should be taking a constructive look at their pay practices.
Pay analyses can take on several forms ranging from “eyeball” cohort reviews for small groups to multiple regression analyses for larger groups of employees. Regardless of the manner in which pay is analyzed, the process should be designed to identify and compare “similarly situated” individuals, or those who are doing comparable work, at a similar level, with similar skills.
The law requires fair pay not equal pay. So, if pay differences are identified, it is critical to investigate whether there are legitimate, business related reasons for the differences in pay. And importantly, regardless of the form of the review, it should be conducted by, or at the direction of, counsel – to cloak the analyses in privilege. The goal is to protect your analysis so that a government agency . . . or savvy private plaintiff . . . will be unable to obtain it.
OFCCP’s methods for investigating pay are ever changing, but the end result remains the same – identifying unexplained differences in pay between similarly situated males and females, minorities and non-minorities. Given this, it is imperative that employers take a look at employee compensation before the government does it for them.