OFCCP announced today that it has officially rescinded the 2006 Compensation Standards, effective February 28, 2013.  In an effort to have “more flexibility” in its review of employer pay, OFCCP has finally taken the compensation standards off the books.

In the 52-page Notice of Final Rescission OFCCP stated it does not intend to replace the Standards with any formal rule but instead will rely on “subregulatory materials” such as compliance manuals, directives and training to inform contractors (and compliance officers) on processes governing pay investigations going forward.

In light of this OFCCP has stated its approach to investigating and enforcing non-discrimination with respect to pay will “follow Title VII principles.”  Based on this, the Agency commits to developing a “case-by-case” approach to investigating pay.

I know what you all are thinking, but OFCCP says it believes this increased flexibility and “case-by-case” approach “does not necessarily lead to greater inconsistency” and has “committed to ensuring that it does not.”  I don’t know about you, but I’m interested in seeing how the Agency plans to ensure consistency under this new process . . .

As we have mentioned previously, OFCCP has not been quite about its stated agenda to assist veterans and individuals with disabilities.  The Agency has proposed regulations addressing employer obligations for both groups that, if published, will be “game changes” for the contractor community.

Even without the finalization of these regulations, OFCCP is vigorously enforcing the current obligations and employers are seeing more and more violations for alleged failures to engage in good faith outreach efforts with respect to these two groups.

While we are not affiliated with these resources, the Agency has identified several upcoming webinars that may be an option for employers who are looking for ways to add to their recruiting efforts.

The webinars are:

Watch out – OFCCP’s interested in your pay data – all of your pay data. OFCCP, particularly in corporate audits, is digging into compensation other than base pay.  Even if there are no flags or other statistical indicators in the data submitted to the agency (either in Item 11 data or 14-factor data in OFCCP “deep dives”), the Agency is inquiry about other components of pay.

As a result, we recommend employers take a proactive look not just at base compensation but bonus, and commissions and those other areas of incentive and discretionary pay where, frankly, managers are given more flexibility and discretion to make pay awards.  If you don’t look at these ahead of time, you’ll surely be looking at them when OFCCP comes knocking.

It was only a matter of time, but it has happened.  In a letter received recently the EEOC advised it was expanding a single charge alleging disability discrimination, into include the non-alleged issue of nationwide class discrimination in hiring.  (See actual letter below). 

 Letter from EEOC – expanding jurisdiction

 What?!  Non-Alleged??!  Nationwide?  Yes, you read that correctly.  The EEOC unilaterally took a single plaintiff EEOC charge and turned into a nationwide systemic discrimination investigation based on the employer’s use of a nationwide online assessment tool.

What in the world is going on?!?!

The EEOC just approved its Four Year Strategic Enforcement Plan in which it identified as its top enforcement priority for the next four years

“ the elimination of systemic barriers in recruitment and hiring.”

Given EEOC’s focus on systemic discrimination the Agency is going to look at every opportunity to turn routine charges of discrimination into systemic cases, just like it did in the above case, and to bring in large financial settlements as a result. 

Take Away

If you use an online assessment tool, you may find yourself right in the EEOC’s “sweet spot” and can expect the next single charge involving hiring to trigger a class-wide investigation.  Do not rely on a vendor’s statement that the assessment tool has been validated to ensure consistent application.   Such a validation is generic and is not for its specific use by you.  Assessment tools must be validated for your jobs specifically.  

Taking EEOC’s laser-like focus on employer hiring practices into consideration with OFCCP’s focus on applicant-to-hire adverse impact, means, now, more than ever, employers must evaluate their pre-employment and hiring processes to identify potential discrimination and to ensure that hiring policies and practices are consistently applied and tracked.

Almost a year after the Equal Employment Opportunity Commission (EEOC) updated its enforcement guidance on employers’ use of arrest and conviction records when making employment decisions, OFFCP has issued Directive 306, instructing federal contractors to strongly consider federal anti-discrimination laws before excluding applicants from employment  based on criminal history records.

What does this mean to you?  OFCCP will be scrutinizing contractors who:

  • Consider the existence of criminal history record without taking into account the age and nature of an offense;
  • Post job announcements that categorically exclude people who have any kind of conviction or arrest;
  • Screen out job seekers with criminal records with statements that they will only accept applicants with “clean” criminal records.

Directive 306 suggests contractors should refrain from inquiring about convictions on job applications altogether.  However, if a contractor chooses to consider the criminal record history of applications, OFCCP will expect the inquiry to be limited to only those convictions which are job-related and consistent with business necessity.

Adding another hurdle for contractors, the new Directive also establishes mandatory procedures for contractors that utilize the Federally-Assisted Workforce System to post job announcements.

American Job Centers (and other covered entities) are now required to identify job announcements that include hiring restrictions based on arrest and/or conviction records and send them back to Contractors for either modification or further notification to applicants about the inquiry. The Directive doesn’t say how the job centers are supposed to review and identify each job posting that comes in.  Regardless, this sounds like a whole lot of additional work for the job centers and it will be interesting to see how they implement this requirement.

One step ahead of Directive 306, many  major cities have joined the reform called “Ban the Box” and have already required employers to remove conviction history questions from job applications.  To see if your city is subject to “Ban the Box” restrictions, check out the National Employment Law Project Resource Guide (updated November 2012).

 As we shared with you earlier this month, the new FAR regulations surrounding the non-displacement of qualified workers from  existing government contracts went into effective January 18, 2013.  Our Jackson Lewis colleagues have prepared a practical guide to understanding and complying with these new regulations. 

Click here to view the complimentary webinar

We can’t say it enough – the OFCCP is using aggressive tactics to impress upon contractors that non-compliance with the agency is not an option.  If you want to do business with the Government, you’ve got to “play ball” with OFFCP.

Just days before President Obama was officially sworn into a second term, OFCCP filed “capital punishment” complaints against one of the nation’s largest security associations’ establishments in Wisconsin and Indiana.  What is “capital punishment” in OFCCP’s world?   Seeking cancellation of all current contracts and debarment from future government contracts.  In this case, OFCCP threatened to cancel a reported $7million contract as a result of the company’s alleged refusal to submit affirmative action plans in response to two OFCCP audit letters.

This latest action by OFCCP underscores the Agency willingness to “go to the mat” in a second Obama administration and continue its aggressive enforcement tactics in compliance evaluations.

Speakers David Fortney, Mickey Silberman and David Cohen invite you to a complimentary webinar to introduce The OFCCP Institute

Reserve your Webinar seat now for this complimentary webinar on January 30th at 2:00 to 3:00 pm EST.

About The OFCCP Institute

The OFCCP Institute was formed to assist the contractor community in responding to rapidly changing compliance challenges. The Institute provides national training programs addressing the latest OFCCP developments and strategies for effective compliance.

Overview

In the past year, the Federal Contractor community has witnessed dramatic changes in the Office of Federal Contract Compliance Program’s (OFCCP) approach to enforcing Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974. Join David Fortney, Mickey Silberman and David Cohen for a complimentary one hour webinar focusing on the most significant and up to date OFCCP developments.

Topics discussed will include:

  • Update on the new disability (Section 503) and veterans (4212) regulations
  • OFCCP audit and enforcement trends
  • The latest approach to compensation discrimination enforcement
  • Status of the revised scheduling letter
  • Changes in OFCCP leadership
  • Recent OFCCP settlements
  • Updates on Agency initiatives, including FAAPs, sex discrimination guidelines, and pay survey
  • Changing audit selection process

This webinar is essential for corporate decision makers responsible for their companies’ affirmative action plans, OFCCP audits, EEO compliance and compensation.

As late as last week CNN announced Hilda Solis, would remain in her post as the head of the Department of Labor. Today, however, the news outlet reported Solis is in fact resigning her position in Obama’s cabinet. This news is breaking so fast CNN’s website still has last week’s story about Solis’ continued Cabinet service up on its website.

What we do know is the Obama Administration, invigorated by a second term, has “doubled down” on its commitment to address the gender “wage gap” as well as assist our veterans with the quest for employment upon returning home.  Solis’ exit from the DOL, and more so the decision as to her successor, will have profound effects on the employer community.  What those will be, we will just have to wait and see.

In addition to Solis’ departure, the Office of Management and Budget (OMB), the office tasked with evaluating the impact and burden of proposed legislation, like OFCCP’s proposed revisions to the Veterans regulations and its new scheduling letter, on the regulated community is also without a leader.

So we now have a headless DOL, a headless OMB and an emboldened OFCCP wanting to get its pending proposals finalized.  I wouldn’t bet on it, but it seems as though OFCCP likely will have to wait awhile to see any movement on these projects . . .