In yet the latest chapter of the ongoing debate between the health care industry and OFCCP over the reach of the Agency’s jurisdiction, a federal court has determined OFCCP has jurisidction over three Pittsburgh-area hospitals receiving payments from a health plan for providing medical services to U.S. government employees.

In light of this decision, OFCCP likely will continue to aggressively assert jurisdiction over companies it deems subcontractors, even in the absence of contracts that reference the affirmative action regulations. Therefore, it is critical that employers, especially those in the health care industry, inventory and review customer agreements to determine whether the goods or services being provided might make them federal subcontractors, subject to affirmative action obligations.

On March 27, 2013 OFCCP sent out a wave advance notice letters –referred to as CSAL’s – to employers across the country.  In November, 2012, OFCCP emailed more 1,750 CSALs.  We have learned the number of CSAL’s mailed last week exceeds the last round of notifications sent in November.  As result, employers can expect a significant increase in audits during the rest of OFCCP’s fiscal year 2013, which ends September 30th.

Like the last several rounds of CSALs issued, these advance notification letters have been send directly to the facility to be audited and are addressed ambiguously to “Human Resources Director.” Thus, it’s time once again to alert those in the field to keep their eyes open for correspondence from the OFCCP.

Given the Agency’s recent rescission of its systemic discrimination compensation standards and issuance of Directive 307 (“Procedures for Reviewing Contractor Compensation Systems and Practices”), we anticipate OFCCP will be aggressively reviewing compensation in this coming wave of audits.  Employers need to be vigilant in carefully reviewing their pay practices to ensure they can defend what we anticipate will be vigorous pay investigations by OFCCP going forward.  In addition, employers should ensure other “hot button” issues – such as adverse impact in hiring and outreach to veterans and disabled based recruitment services – are carefully reviewed before submitting an affirmative action plan to the Agency.

As President Obama’s nominee for Secretary of the Department of Labor, Thomas E. Perez awaits the confirmation process, Director Pat Shiu has announced leadership changes for OFCCP.

In the wake of Dr. Richard Fischer’s departure, Dr. John Haymaker has been named Branch Chief for Field Liaison Operations and Technical Assistance and will be tasked with providing analysis and technical assistance in testing cases.  Previously, OFCCP utilized the testing expertise of both Dr. Haymaker and Dr. Fischer, however, it appears now that Dr. Haymaker will assume the role in a sole capacity.

Additionally Director Shiu announced a new role for Tom Dowd on OFCCP’s executive leadership team.   Mr. Dowd has been elevated to the position of career Deputy Director.  Deputy Director Dowd has been active in enhancing the agency’s operating plans and enforcement programs and his selection for this new role does not come as a surprise.

Now for the really interesting stuff. . .

In its recently released new compensation directive and rescission of the 2006 compensation standards, OFCCP articulated its intent to consult with labor economists as one tool to better analyze the complexities of compensation cases.  In what appears to be an effort to further this goal, OFCCP has announced the hiring of Labor Economist Dr. Kristin Monoco to assist with the development of systemic cases.

It remains to be seen what role Dr. Monoco will actually play in the development of the Agency’s systemic enforcement strategies and individual pay cases, but one thing is for sure –  it’s going to be an interesting summer . . .

As EEOC and OFCCP continue to focus on investigating andaddresing systemic discrimination in employer’s hiring practices, it is critical for employers to take a closer look at their employment tests.

Matthew Camardella along with Anthea Dexter-Cooper of Jackson Lewis’ Long Island office recently provided some expert guidance and practical advice for employer who use (or are contemplating using) employment tests in their hiring processes.

As we shared with you last week, President Obama has nominated Thomas E. Perez as the next Secretary of Labor.  If appointed, Perez will take the place of Hilda Solis, who resigned earlier this year.

The confirmation process for Perez may not come without its challenges.   Perez has drawn criticism from some Conservatives regarding his involvement in voting rights cases and his aggressive approach to discrimination and brutality claims brought against local police and sheriff’s departments.  On the other hand, Perez is largely supported by Liberals and labor leaders.  This divergence could lead to an interesting confirmation process.

In a public webinar held earlier this week, OFCCP provided listeners with information and insights into the Agency’s recent rescission of the 2006 Compensation Standards and the implementation of Directive 307.

As OFCCP’s Notice of Rescission made clear, the Agency felt constrained by the 2006 Standards and the new “case-by-case” approach to pay investigations will afford OFCCP the flexibility it needs to identify and fully investigate pay discrimination.

During the webinar, OFCCP emphasized that going forward it will be “considering all employment practices that may lead to compensation disparities” and explained this means Compliance Officers will be looking into hiring practices, promotion and training opportunities, and “glass ceiling” type issues for their impact on employee pay.

During the robust question and answer period of the webinar, OFCCP was asked to shed light on what employers should be doing for a compliant proactive pay analysis going forward given the rescission of the Voluntary Guidelines on Self-Evaluation.  The Agency respond it “was easy” – contractors just need to “follow the regulations.”  The regulations, however, do not proscribe a specific methodology for self-evaluation.  In response to several follow up questions on the topic, Pam Coukos, the Agency’s Special Program Advisor on pay further answered the question by stating what she believed a compliant self-evaluation was not.  Specifically, she opined that looking at pay a single way by job title “and calling it a day” would not be a sufficient self-evaluation.  While providing insight into OFCCP’s position on the subject, employers are still confounded as to how they should be looking at their pay in a proactive fashion given OFCCP’s new compensation “playbook”.

In another highlight during the call, a question posed by a webinar attendee raised issue with the seemingly contradictory position taken in the recently published FAQs compared to the Scheduling Letter on the date of the compensation snapshot to be provided during compliance reviews.  OFCCP stated it would look into the matter and determine whether the FAQs needed to be revised.  The bottom line, the Agency said, is if it comes down to the FAQs (or the Directive) and the Scheduling Letter, the Scheduling Letter prevails.

OFCCP will be hosting another complimentary public webinar on March 22, 2013.  Tune in if you can . . .

In the time since former head of the Department of Labor Hilda Solis resigned from her position, we’ve been interested in who President Obama would tap to carry out the ambitious goals of his second term.  The wait is almost over as we anticipate that President Obama will soon name Thomas Perez to fill the void left by Solis.

Since 2009, Perez has led the Civil Rights Division at the Justice Department and previously served as Maryland’s Labor Secretary.  His background will no doubt strengthen Obama’s goal to implement changes affecting immigrant workers as well as increasing the minimum wage.  Perez also brings with him support from organized labor and the Hispanic community.

The President is expected to formally announce his selection in the coming days and we will be sure to let you know as soon as its official.

In an effort to provide the Office of Federal Contract Compliance Programs and its compliance officers “more flexibility” in the review of employer pay practices, the Agency has rescinded its own compensation standards and voluntary guidelines and issued a new “game-changing” Directive. Under the new Directive, OFCCP commits to developing a “case-by-case” approach to investigating employer pay practices.

 Join us for a complimentary webinar on Tuesday March 12, 2013 during which we will dissect the principles of OFCCP’s new “case-by-case” approach, explain the practical impact of the new Directive on OFCCP’s enforcement practices during compliance reviews and offer attendees best practices for responding to this “game changing” development.

While the federal contractor community (including us) are digesting the recent rescission of the OFCCP’s compensation standards and the impact of Directive 307, other changes are afoot at the Agency.  We have confirmed that Dr. Richard Fischer, OFCCP’s IO Psychologist and testing expert is resigning from the Agency effective March 8, 2013.   For the time being, Dr. Fischer’s duties will be assumed by Dr. John Haymaker, another IO Psychologist with the Department of Labor.

As an update to our breaking news post yesterday, we have published additional, initial, thoughts on OFCCP’s rescission of its Compensation Standards and the impact of the Agency’s new pay investigation procedures. See the following article on the Jackson Lewis website:  OFCCP Rescinds Compensation Standards and Will Develop New ‘Case-by-Case’ Investigative Approach.

We continue to digest and analyze this significant development and will provide additional detailed insights in the coming days so, stay tuned for more . . .