On the last morning of the 2014 SWARM Regional Conference, attendees were treated to a special session with OFCCP officials and practitioners discussing OFCCP’s approach to pay enforcement. On the panel from OFCCP were SWARM Regional Director Melissa Speer and Deputy Director of Operations, Marika Litras who graciously and skillfully filled in for an ill Pam Coukos.
In the context of OFCCP’s release of Directive 307 last year, the women shared insights into the Agency’s current approach to investigating compensation during OFCCP compliance reviews.
Takeaways for contractors from the discussion include:
- OFCCP expects contractors to do a very detailed, comprehensive comp self-audit on an annual basis, including regression analyses where practical
- The annual self-audits need to include accessing and reviewing data and documents reflecting relevant pay factors. For example, do you have relatively easy access to records the document starting pay or prior related experience?
- OFCCP looks first at a macro level of your compensation practices to inform how they will construct the groups to analyze your pay – looking first to “function” to guide the structure of the groups
- At least in the SWARM region, OFCCP takes a “team approach” to compensation reviews and triages cases to focus on those cases with the biggest issues
- Consistent with Directive 307, the scope of an OFCCP pay investigation will touch on a breadth of contractor employment practices (e.g. hiring, promotions)
One of the liveliest portions of the conversation surrounded the issue of OFCCP’s current “trigger” test for compensation analyses. Melissa reiterated to the group that “there is no trigger.” However, Marika listed a number of factors OFCCP takes into consideration when triaging cases to identify the “strongest cases” to pursue and acknowledged OFCCP categorizes employers into groups based on likelihood of compensation issues the Agency should pursue. Marika made it a point to convey that OFCCP’s “test” is constantly evolving and thus suggested “its not valuable to share because its constantly changing.”
A panel on pay could not be complete without an attempt to gain insight into OFCCP’s work to develop a pay data collection tool in response to President Obama’s preseidential memoradum. Not unexpectedly, Marika could provide little detail into OFCCP’s efforts but confirmed the Agency is on schedule to release its proposal by the end of the Summer.
In parting thoughts, Melissa shared what, in her mind, makes a “good” pay system:
- Proper record keeping
As the conference comes to a close it is more apparent than ever the importance of conducting annual self-critical analyses on your compensation systems and that these analyses are conducted under attorney-client privilege so as to avoid being the “low hanging fruit” in OFCCP’s pay enforcement harvest.