For most employers dealings with OFCCP usually come in the context of responding to a scheduling letter initiating a compliance review.  There is, however, another way OFCCP can investigate an employer.  Two partners from our OFCCP and Affirmative Action practice group, Matt Camardella and Eric Felsberg recently provided employers with practical pointers and advice for responding to an OFCCP charge  of individual discrimination.

Up next on August 14th, Mickey Silberman and Joy Chin will release a webinar covering highlights and insights from the 2013 National ILG Conference held this year from July 30 – August 2 in Indianapolis, IN.

On Monday, June 10, 2013, the Equal Pay Act turned 50. President Obama commemorated this historic anniversary with public remarks at the White House in which he urged continuing pay equality efforts. Occupying a place of prominence, and an act no doubt intended to highlight the Agency’s efforts towards pay discrimination, Director Shiu stood behind the President during the ceremony.

Additional events marking the day included The National Equal Pay Task Force’s issuance of a report, Fifty Years After the Equal Pay Act: Assessing the Past, Taking Stock of the Future, that links the OFCCP’s enforcement of EO 11246 to EPA progress. The 45‑page Report references OFCCP more than 30 times, discusses at least 5 specific OFCCP settlements, and highlights the “strengthening collaboration” between the OFCCP and EEOC.

Director’s Shiu’s VIP status during the President’s remarks and the emphasis on OFCCP in the Task Force’s Report are interesting given the fact OFCCP does not enforce the EPA . . .

Not to be left out, the OFCCP also observed the EPA’s birthday with a blog post by OFCCP Senior Program Advisor Pamela Coukos titled 50 Down, 50 to Go? Myth Busting the Pay Gap Revisited. Ms. Coukos reinforces OFCCP’s belief that the pace of progress toward eliminating the wage gap is unsatisfactory and that the Agency does not plan to “just sit back and wait five more decades” for it to close entirely.

Ms. Coukos’ remarks do not come as a surprise given OFCCP’s recent rescission of the 2006 compensation guidelines and issuance of Directive 307 and the other events of the week serve to further emphasize OFCCP’s continued aggressive search for pay discrimination.

 

Answering additional questions following her American Association for Affirmative Action annual conference keynote address, Director Shiu took questions on OFCCP’s pending veteran and disabled individual revised regulations.  She explained the regulations are awaiting Office of Management and Budget (OMB) approval and acknowledged (as we suggested before) that they delay in approval could be due to the recent vacancy of the OMB Director position.

Director Shiu also acknowledged she has conveyed to “the powers that be” a desire she’s heard from the contractor community that the two revised regulations be issued simultaneously to avoid multiple system adjustments and upgrades.

Without being able to specify an exact timetable, Director Shiu did share her belief that OFCCP’s proposed VEVRAA and Section 503 revised regulations will be approved and issued sometime in 2013.

Responding to questions following her keynote address at the annual conference of the American Association for Affirmative Action, OFCCP Director Patricia Shiu informed conference participants that OFCCP plans to conduct additional webinars on Directive 307, the Agency’s new Procedures for Reviewing Contractor Compensation Systems and Practices.

Director Shiu explained that there appears to be a “lack of understanding” around what the Agency means when it refers to using “existing Title VII principles” to conduct compensation audits and OFCCP wants to “educate” the contractor community more on this topic.

Director Shiu expressed the Agency’s perspective that the compensation directive is an “ongoing dialogue” with employers, reiterating that compensation analyses are “not going to be the same in every case.”

Details as to when the additional webinars may be held are not yet available.

In an announcement found on OFCCP’s website, the Agency has identified January 1, 2014 as the date federal contractors will be required to start using the most recently released EEO tabulation data in development of their affirmative action plans.  In other words, all affirmative action plans updated in 2013 can be done so using the existing 2000 EEO file.

Late last year the Census Bureau released its new equal employment opportunity tabulations breaking down the U.S. labor force, by sex, race, and ethnicity, in searchable form by geographic location and occupation.  In addition to other purposes, these tables serve as the source of “availability” data for affirmative action plan utilization analyses and will replace the current tabulations in use by federal contractors since 2005.  Though it has been several months since the data was released for use by the public, OFCCP delayed setting a deadline for contractor use until it could survey employers on the practicality of implementing the new information.

This year, unlike years past, the Census Bureau created the tabulations from the Bureau’s annual American Community Survey (ACS) for 2006 through 2010.  The ACS surveys nearly 2 million U.S. households annually.  In years past the EEO tabulations were based on information submitted on the decennial census long form.

The Bureau announced utilizing the ACS data allows for a more detailed picture of the labor force and even allows for insight into unemployment and citizenship status.

Contractors have until the end of 2013 to update their data files with this new tabulation and begin assessing the impact of the new comparator population on the expected race and gender make-up of your workforce. . . and don’t be surprised if your AAP utilization analyses results look very different next year.

As we’ve heard for the past couple of years, OFCCP is developing a cloud-based system that will allow Agency offices across the country to access the same information about federal contractors.  In its 2014 budget justification document, OFCCP said it will implement a cloud-based system in FY 2014 enabling the agency to improve process standardization, reporting functionality, and overall productivity of employees.  OFCCP reports the new technology will allow the Agency to realize savings beginning in FY 2015 and 2016 in the amount of $39,000,000 over a period of 7 years.  This initiative will also theoretically allow OFCCP to pursue  enterprise-wide and systemic discrimination investigations by facilitating coordinated compliance efforts and identification of potential issues with company-wide policies and practices for contractors with multiple locations.

In addition to detailing it’s definition of a systemic discrimination case, OFCCP’s 2014 budget justification document also confirms the Agency’s intent to implement an enterprise-wide investigative process (as opposed to focusing on individual establishments). In its budget justification document OFCCP states that focusing on identifying issues across multiple facilities will ensure that corporate-wide changes in personnel practices are implemented, when necessary, throughout the contractor’s entire corporate structure, and not just within the facility that is the subject of the initial OFCCP investigation.  With this admitted shifted in focus, employers need to be mindful of their enterprise-wide practices (employment testing, compensation practices, use of criminal background checks) and the potential compliance pitfalls associated with these practices.

As we recently shared, OFCCP has issued its budget justification for fiscal year 2014.  As part of this document, OFCCP shared the details of how it will define a “systemic discrimination” case.

OFCCP defines systemic discrimination as a case meeting one of two criteria:

(a) the case addresses a measurable pattern of discrimination (either based on findings from a regression analysis or based on any other aggregate statistical measure such as mean differences) or

(b) the case addresses an identified practice applicable to multiple employees that results in pay discrimination (such as a practice of steering employees who are members of a protected class toward lower paying jobs at hire). There is no specific numeric threshold used to define a systemic case.

Reading the above in connection with Directive 307, the Agency’s new “play book” for pay investigations, makes it evidently clear what OFCCP will be looking for in your next compliance review. . .

Senate confirmation hearings began today for labor secretary nominee Thomas Perez, whose nomination was announced in March.  During the first day of hearings, Perez, who would replace former labor secretary Hilda Solis, was grilled, as expected, on his involvement in controversial voting rights cases as well as his management “style” during his tenure in the Department of Justice.

Perez responded to the inquiries by focusing on his priorities as labor secretary, if appointed.  Aligning with the well-discussed objectives of President Obama’s second term, Perez emphasized his goals: jobs, fair pay, and “even handed enforcement” of wage and hour laws.

The senate committee is expected to vote on Perez’s confirmation next week.

In its recently released 2014 budget justification document OFCCP sought an approximate $1.1million dollar funding increase over 2013 levels.  Following on the heels of its rescission of the 2006 Compensation Standards and Guidelines and implementation of Directive 307, OFCCP states the influx of cash will go to fund the Agency’s continued quest to “narrow the persistent pay gap between men and women.”  It’s no secret combating pay discrimination has been a top priority for OFCCP during the Obama administration.  To be sure, the budget justification document reinforces that expanded and enhanced enforcement of employer pay practices is the Agency’s primary focus.