As OFCCP tries to find new ways to attack the “pay gap,” the Agency is focused increasingly on novel and creative methods to uncover alleged pay discrimination. These “outside the box” investigations look beyond simply pay decisions (starting salary and pay adjustments) and instead examine employee selection processes – such as hiring decisions – and the impact of these processes on pay. In that vein, OFCCP recently has greatly increased its focus on “steering” – a theory of discrimination alleging that an employer assigns newly hired employees into different (typically) entry-level positions with different pay rates based on race and/or gender. A classic example is when new male employees disproportionately are hired for the heavier lifting production entry-level jobs in the warehouse while female entry-levels are hired into the warehouse “clean up” positions (which pay less).
These increasingly common steering investigations often are extremely time-consuming and burdensome on employers. Moreover, OFCCP is starting to get big results with this innovative approach. Most notably, in late 2013, G&K Services Co. agreed to settle claims of pay discrimination with OFCCP for more than $265,000. OFCCP alleged the Company steered female applicants into lower paying “light duty” jobs upon hire.
Contractors should use their affirmative action plan data to identify whether the hallmarks of steering exist in their workforce. Specifically, contractors should examine jobs that are on the same or similar level (such as entry-level production jobs) with differing pay rates for concentrations by race and/or gender. If identified, closely examine how those concentrations came about – whether self-selection by applicants (good) or decisions made by recruiters or managers (potentially bad). If the latter, determine whether there are job-related reasons for the decision-makers disproportionately selecting applicants of a specific race/gender for particular positions.
This is a rapidly developing area of OFCCP enforcement and Jackson Lewis is defending many steering investigations around the country. We will present a session at the ILG national conference next week in DC on how best to avoid and (when necessary) effectively respond to OFCCP steering investigations. If you plan to attend the conference, please join my colleagues Matt Camardella and Michelle Duncan as they present on this increasingly important issue.