The 24th Annual Industry Liaison Group National Conference was held on August 5-9, 2006 at the JW Marriott Desert Ridge Resort & Spa in Phoenix, Arizona. The event featured several informative presentations by OFCCP staff, contractors, and specialist consulting firms. In one of these sessions, DCI President David Cohen participated in a spirited panel discussion, moderated by NILG conference chair John Garza from Arizona Public Service, on the new systemic compensation guidelines and standards.
The following outlines some of the important highlights of this conference:
Keynote Address by OFCCP Director Charles James
A special feature of the NILG conference was OFCCP Director Charles James’ keynote address. James spoke to an audience of nearly 500 participants and strongly emphasized the “dynamic change” underway at the agency, noting that the “electronic age for OFCCP” had begun. Key highlights of James’ address include:
1. OFCCP Outsourcing: James spoke at length about efforts to make the agency more efficient. One initiative already in progress is to open some agency positions for competitive bid and private-sector outsourcing. While the agency’s focus is currently on administrative positions, James indicated that outsourcing would go beyond lower level positions. Currently, administrative employees are being asked to identify their job duties in preparation for this move.
2. Recordkeeping: James indicated that the single largest violation OFCCP uncovers during compliance reviews is contractors’ failure to comply with federal recordkeeping regulations. James said that one of OFCCP’s key goals is to reduce recordkeeping violations, and he urged contractors to contact the agency for assistance in complying with these rules.
3. Contractor Selection System: James also discussed how the OFCCP is “refining” its process for selecting contractors for compliance evaluations. He said that previously contractors were targeted for review based on their EEO-1 reports. OFCCP staff frequently encountered jurisdictional problems because some of the EEO-1 reports were inaccurate or incomplete in stating whether a company was, in fact, a federal contractor. As a result, OFCCP decided to change its selection process by using a list of federal contractors, such as those compiled by the General Services Administration or the Federal Procurement Data System. This system has also been deficient in identifying federal contractors. James said the Office of Management and Budget is currently developing a new list of federal contractors, planned to be available through a new Web site in the next two years, which he expects will be very useful to OFCCP. James expects this list will be particularly helpful in identifying smaller federal contractors.
James also mentioned that the cap of 25 new evaluations per contractor to be scheduled in a scheduling cycle has worked “not as well as I would have liked,” but reasonably well since its introduction.
4. New Systemic Compensation Discrimination Standards: James discussed the agency’s newly implemented systemic compensation discrimination standards and voluntary self-evaluation guidelines. OFCCP is proceeding carefully on enforcement efforts with only a limited number of cases. James said that since the OFCCP is using a new statistical compensation analysis, the agency wants to make sure these cases are “ready” before taking enforcement action, noting that at this point the compensation analyses are “the battle of the experts.”
[Additionally, please note the OFCCP recently posted “Frequently Asked Questions” on the Compensation Standards on the DOL web site.]
5. Functional Affirmative Action Plan (FAAP) Pilot: James said that over the next year, OFCCP will expand the pilot program permitting federal contractors to develop affirmative action plans along functional or business lines. OFCCP intends to bring the program out to the field during the next fiscal year. [Currently the FAAP program is managed out of the OFCCP’s national office under James C. Pierce.] James encouraged the audience to “go with functionals” in their organizations, citing the cost savings to contractors. James also stated his hope that eventually the bulk of the reviews conducted by OFCCP will involve FAAPs.
6. Internet Applicant Rule Enforcement: James said the agency is preparing to enforce the new Internet Applicant rule, which was issued last October. James acknowledged that the new rule has created some unexpected difficulties for both the agency and contractors since its implementation. One major difficulty contractors seem to have is distinguishing between “data management” and “selection.” James urged contractors to approach the situation from the applicant’s position and take a “reasonable position” in determining who is in the applicant pool. He warned contractors that since they have the power to make these determinations, the agency might tend to support the applicant’s side.
7. Fate of the EO Survey: James mentioned that the final proposal regarding the future of the EO Survey was currently at OMB, and that a Federal Register notice would be published in the very near future. (UPDATE: The EO Survey will be eliminated effective September 8, 2006- click here for details.)
Keynote Address by EEOC Chair Cari Dominguez
EEOC Chair Cari Dominguez focused her keynote address on the agency’s accomplishments during the past five years. The day before speaking before the NILG audience, Chair Dominguez had announced her departure from the agency at the end of August. These accomplishments included the agency’s many training and outreach efforts, decreased time for processing discrimination charges, establishment of an extensive mediation effort, and improved litigation efforts.
In particular, Chair Dominguez said that she believes the EEOC’s new systemic litigation program, which was approved last April, will result in new consistency among the various field offices. Following the model of a national law firm, Chair Dominguez believes there will be consistency and collaboration across the agency in implementing this new program. She said that recently confirmed General Counsel Ronald Cooper will head up the new systemic litigation program. Cooper was sworn into his new position on August 11.
Other Presentations by OFCCP Staff
1. Recordkeeping: Sandra Zeigler, Midwest Regional Director and Shirley J. Thomas, Deputy Regional Director Midwest Region, Chicago, IL
Expanding on Charles James’ earlier comments about recordkeeping violations, Sandra Zeigler, Midwest Regional Director in Chicago, discussed in detail how these violations surface in the context of compliance evaluations. She also emphasized that the agency will increase its enforcement of recordkeeping rules, and warned that a recordkeeping violation could result in more severe penalties than what contractors have previously received.
Zeigler urged the audience to be proactive to ensure their companies meet the recordkeeping and record retention requirements, and she outlined several steps contractors could take to improve their compliance including: (1) developing a broad education program to ensure all key staff are aware of these legal requirements; (2) understanding how long contractors are legally required to retain records; (3) preserving all “relevant records” in the case of open actions until the action is resolved; (4) maintaining contemporaneous records; (5) documenting efforts to obtain race and gender data; (6) archiving electronic records to facilitate easy retrieval; and (6) keeping track of the records contractors submit to the OFCCP.
Ziegler also emphasized the importance in understanding the broad definition of a “record” under OFCCP regulations. She said that any memorialization of information pertaining to employment activity, whether traditional written paper records or electronic communications, could be considered a record.
2. Systemic Compensation Discrimination: Michael Sinclair, Ph.D., Director, OFCCP Division of Statistical Analysis and Marika Litras, Ph.D., Sr. Statistician, OFCCP
Dr. Sinclair and Dr. Litras presented an in-depth update on the activities of OFCCP’s Division of Statistical Analysis and the ongoing challenges the division and OFCCP face in conducting compliance reviews of contractors’ compensation practices. Dr. Sinclair walked through a flowchart describing the development of SSEGs from a contractor’s workforce and considerations for preparing the evaluation of compensation information. Dr. Litras reviewed statistical approaches to evaluating compensation and highlighted key regression output information that contractors should pay close attention to when interpreting the results of their analyses.
3. OFCCP Testing Initiative: Richard J. Fischer, Ph.D., OFCCP
Dr. Fischer gave a presentation on the testing portion of the compliance review, including the test-related information needed to avoid a discrimination finding when a test or selection practice has adverse impact. Dr. Fischer discussed a contractor’s obligations under the Uniform Guidelines on Employee Selection Procedures and reviewed some of the psychometric information involved with evaluating selection tests, including reliability and validity. Dr. Fischer also outlined different approaches to test validation and the key information that a test developer should provide in the validation report and test manual.
4. FAAP Program: Cynthia Deutermann, Deputy Director of the Division of Program Operations, OFCCP
Deutermann, who prior to last month was the head of OFCCP’s FAAP unit, reviewed the process that the agency and contractors work through to put a FAAP agreement in place for an organization. Deutermann said that 125 agreements have been executed, with FAAPs covering a total of almost 2 million workers. She also noted that nearly 30% of the initial requests for FAAP agreements received by OFCCP did not turn into agreements, largely due to mergers and acquisitions involving the requesting contractors.
5. Emerging Issues and Challenges: Regional Directors
The Regional Directors participated in a panel discussion on the emerging issues and challenges that are being addressed across the respective regions. One of the issues that surfaced during this panel discussion involved the topic of hiring and the appropriate remedies in such cases. Midwest Regional Director Sandra Ziegler discussed her perspective on what an appropriate remedy might be in a hiring case. Her view is that reducing significant shortfalls to zero is not a sufficient remedy. For example, suppose that a pool of applicants is 50% female and that 100 applicants were hired. Among the hired, 90 are men and 10 are women. The statistical female shortfall is 40. However, Ziegler said that if another 40 women had been hired (now the total number of hires is 140), the percent female among hires is still less than 50%. Therefore, even if 40 additional women are hired, they are still under-represented in the hire class, which, according to her, means that the subsequent promotion pools won't be as female as the pools "should have been." If the number of female hires falls significantly short of the expected number, then, to her way of thinking, 90 women should have been hired -- the "fair" remedy would be 80 additional female hires, not 40.
DCI has some concerns about this unusual approach, and we will seek clarification on how the OFCCP intends to pursue it.