The 29th Annual National Conference for the Industry Liaison Group (ILG) was held July 25 – 29, 2011 in New Orleans, LA. This annual conference brings together members of the federal contracting community to discuss affirmative action and equal employment opportunity (EEO) issues and share information. 2011 proved to be an exciting and informative conference due to a flurry of change from OFCCP, with numerous regulatory items up for public comment and possible revision. DCI Consulting Group staff attended a variety of sessions during the conference. Session summaries and highlights can be found below:
Opening Ceremony: Speech from the Director of OFCCP - Patricia Shiu, OFCCP
You Can’t Un-Ring the Bell - David Fortney and Kathleen Raynsford, Fortney Scott and Jill Smith, WorkPlace HR
A New Day for Pay Discrimination Enforcement - Mickey Silberman, Jackson Lewis, LLP
Getting in Rhythm with OFCCP – Recent Significant Compliance Developments - John Fox, Fox Wang & Morgan
How Significant is Statistical Significance - A Practical Perspective - Alissa Horvitz and Joshua Roffman, Littler Mendelson
Regional Directors Panel - OFCCP Regional Directors: Melissa Speer, Michelle Hodge, Evelyn Teague, and Bill Smitherman
Academic Institutions as Federal Contractors – Exploring the Challenges in Compliance - Panel: Marilynn Schuyler, Schuyler Affirmative Action Practice; Christine Iijima Hall, Maricopa Community College; Judy Ferres, Boston College; and Lynette Chappell-Williams, Cornell University
Affirmative Action for People with Disabilities - George Kettner, Economic Systems, Inc.
Compensation Update - Pamela Coukos, Special Advisor, OFCCP
The Dangers of Social Media – How Employers Can avoid the Pitfalls of Social Networks - Lisa Harpe, Peopleclick Authoria and Christy Kiely, Hunton & Williams
Navigating the Landscape of OFCCP Compliance - Panel: David Cohen, Eric Dunleavy, Dan Biddle, David Fortney, Jon Geier, Joe Lakis, and Mickey Silberman
Opening Ceremony: Speech from the Director of OFCCP
Patricia Shiu, OFCCP
Patricia Shiu, OFCCP Director, opened the conference with a strong message to federal contractors that this administration intends to implement change, citing that the current administration was “No drama, Obama”. Director Shiu highlighted a variety of recent agency achievements, initiatives and goals, including:
- The addition of 200 new compliance officers and implementation of the first OFCCP national training program in a decade;
- More proactive outreach efforts to educate workers about OFFCP as a worker protection agency (Released a new FAAP Directive. For more information on this directive, see DCI’s Blog article on the new directive.
OFCCP Initiatives and Goals
- A revised compliance manual “on the brink of completion”;
- More thorough and focused compliance reviews related to disability, veteran status, and pay discrimination;
- An increased collaboration with the EEOC, DOJ and other agencies within the DOL;
- Reviewing public comments that were submitted related to VEVRAA and the numerical targets that were proposed for Veterans. Specifically, Shiu stated that the proposed numerical targets were sought after to provide a way of measuring progress that was less ambiguous than the current affirmative action methodologies. For more information, see DCI’s Blog article on proposed changes.
- The publication of a series of proposed revisions to Section 503 of the Rehabilitation Act of 1973 for public comment;
- Revising affirmative action obligations for the construction industry;
- Revising the Sex Discrimination Guidelines.
Emphasis was placed on pay discrimination issues, citing that women still earn 81 cents on the dollar as compared to men. Director Shiu also indicated that the OFCCP was still researching the use of a compensation data collection tool that would aid the agency in compensation enforcement. She also indicated that the agency would be issuing new guidance on compensation, in light of the proposed recession of the compensation guidelines. For more information, see DCI’s Blog article on the proposed compensation recession.
Shiu noteded that “discrimination is still a very real problem in our country,” and that affirmative action can no longer be defined by good faith efforts. Director Shiu ended her opening keynote address with sentiments that the OFCCP is working hard to encourage voluntary compliance efforts so that all workers can achieve the American dream, and encouraged a dialogue between the federal contract community and OFCCP to achieve equal employment opportunities for all workers.
You Can’t Un-Ring the Bell
David Fortney and Kathleen Raynsford, Fortney Scott and Jill Smith, WorkPlace HR
The Fortney Scott/WorkPlace HR team presented on how to “take the right actions at the right time” during OFCCP compliance reviews and investigations. After highlighting some recent OFCCP enforcement activities, such as the Astra Zeneca compensation settlement (for more information, visit DCI’s Blog article on the ruling), David Fortney and his colleagues Kathleen Raynesford and Jill Smith noted some of the changes related to the OFCCP’s Active Case Enforcement (“ACE”) directive, which replaced the Active Case Management (“ACM”) directive. Specifically, the ACE directive may result in more aggressive compliance reviews for contractors. The presenters also stressed that under ACE OFCCP will:
- Audit compliance with Executive Order 13496 related to worker rights under the National Labor Relations Act;
- Review the contractor’s compliance history for 3 years; and
- No longer audit I-9 compliance.
The presentation also focused on some pitfalls that contractors may fall into during an OFCCP compliance review, as well as some helpful tips to help navigate through the audit process. Some common compliance mishaps noted by the presenters included:
- Not having job descriptions, or maintaining out of date job descriptions. The downside to not having updated or accurate job descriptions is that the contractor may be unable to articulate the basic requirements of a position;
- Not applying the OFFCP’s Internet Applicant Rule to adverse impact analyses;
- Placing the burden of compliance obligations on other individuals or departments in the organization, rather than having a compliance position or department take complete ownership of compliance issues;
- Not validating employee selection practices and procedures;
- Not reviewing hiring decisions for justification;
- Not following policies and procedures that have been established;
- Not knowing what factors affect pay and incorrectly categorizing employees related to compensation (salary grades, job titles, levels, etc.).
The team concluded with some helpful tips for contractors that could be used to aid compliance obligations in a time of heightened OFCCP enforcement. These included:
- Ensuring that the compliance position/department took ownership of all compliance related issues relevant to recruitment, classification, policy development, etc. This may include increased communication efforts and interjecting compliance into other facets of Human Resources and the organization. This also means holding other departments accountable for their AA obligations;
- Ensuring that all policies and procedures are aligned with EEO/AA obligations;
- Educating leadership on EEO/AA compliance issues;
- Staying updated on regulatory and OFCCP changes;
- Self-audit affirmative action data and plans, and take the appropriate corrective actions after identifying problem areas;
- When responding to the OFCCP during compliance reviews, ensure that the response accentuates the positive aspects of the EEO/AA program such as:
- Workforce diversity
- Goal attainment
- areas without statistically significant adverse impact
- Areas where reasonable accommodations have been provided
- Any Veteran or other AA outreach conducted;
- Explain any areas that may be regarded as negative such as challenges in outreach, or layoffs that may have occurred in the workforce.
The Fortney Scott/Workplace HR Team encouraged contractors to take the new regulatory atmosphere of the OFCCP seriously when implementing compliance in organizations. The presentation was helpful to contractors, reiterating that if the appropriate actions were taken ahead of time, contractors would be better prepared during OFCCP audits and investigations.
A New Day for Pay Discrimination Enforcement
Mickey Silberman, Jackson Lewis, LLP
Mickey Silberman addressed the issue of compensation and the recent changes in OFCCP’s enforcement of pay discrimination. Silberman strongly emphasized that compensation is THE top priority for the agency.The shift in focus for the agency comes on the heels of President Obama’s promise to focus on pay equity enforcement and Secretary of Labor Hilda Solis’s goal of 20-40% of all OFCCP settlements to be focused on compensation. This is a major change from the past few years, where less than 15% of settlements focused on compensation. In 2008 there were no settlements involving alleged compensation discrimination and in 2009 there were only two. In 2010 there was a jump to 10 settlements involving compensation. Some key points from the presentation included:
- In 2011, OFCCP released a Public Notice for the proposed rescission of the 2006 Compensation Standards and Voluntary Guidelines. The agency believes these Standards and Guidelines are too rigid and wants more flexibility during pay investigations.
- Under a desk audit screening directive created under the Bush administration (now rescinded), the majority of contractors were screened out by the tipping point test (i.e., desk audit screen), resulting in a small percentage of contractors receiving an in-depth evaluation by OFCCP. With the proposed rescission and a new directive, much has changed for the evaluation of compensation data. The new directive introduced a new screening process, which is more of a screen-in tool that allows the agency to take a deep dive with each audit. This screen, or the 2 and 2 test, looks to see if there is a 2% or $2,000 difference in any pay grouping. Silberman and colleagues did a study of over 100 clients and found that 100% of them would fail the new screen. It is important to note that this screen will become a moot point if the proposed changes are made to the scheduling letter and the Standards are rescinded.
- Silberman referenced the speech by OFCCP Director Pat Shiu from the morning. She announced that OFCCP has heard the feedback from the contractor community surrounding the proposed rescission of the Standards and Guidelines. She promised that there will be guidance put in their place.
- Years of experience and previous salary are the strongest predictors of starting salary, and starting salary is the greatest predictor of current salary. Silberman noted that it is impossible to do a meaningful analysis without these variables, but most contractors do not have the data available in their HRIS.
- It is important to remember that you are required to pay everyone in a non-discriminatory manner, not necessarily equally.
- Silberman advised contractors that if performance drives pay in their compensation system, they must show performance data, which may be an issue for some HRIS. Data exist in fundamentally different forms than in the past and mining the data has changed.
- Silberman encouraged contractors to not submit by job group and to avoid using broad, generic job titles. Job titles that give the real picture of the job should be used and should not be applied to positions that are similar but different. Grouping jobs with different qualifications, tasks, and demands may lead to group differences in compensation analyses, which are not true differences but a result of incorrect categorization.
Silberman concluded by encouraging contractors to continue to do proactive analyses even though the current climate is uncertain. It important to be as best prepared for the unknown as well as preventing private class action suits. Finally, Silberman emphasized that if you can’t explain it (i.e., differences in pay), then fix it and make sure you do it under attorney-client privilege!
Getting in Rhythm with OFCCP – Recent Significant Compliance Developments
John Fox, Fox Wang & Morgan
John Fox engaged contractors through his presentation titled “Getting in Rhythm with OFCCP – Recent Significant Compliance Developments.” While Mr. Fox’s overview addressed OFCCP’s recent activity related to compensation discrimination audit procedures reform, proposed regulations for Protected Veterans, and increased litigation, the majority of his presentation focused on some more up-to-date topics: the proposed new scheduling letter and the “hub-bub in Chicago.”
Per the process for obtaining OMB approval of an information collection, OFCCP published an ANPRM to request public comment on their proposed new scheduling letter. This comment period closed on July 11, 2011 with 18 submissions, a third of which were submitted by advocacy groups in favor of the letter as presented, sometimes even suggesting further obligations are required of contractors (e.g., reports of pay secrecy and arbitration polices). The number of comments was disappointing, according to Mr. Fox, especially in light of the 107 comments submitted for the proposed amendments of the Protected Veterans regulation. Mr. Fox urged contractors to take action on the issue by participating in the second, and final, comment period to be opened upon revisions made by OFCCP following any suggestions provided by OMB. He described the comment process as preparing evidence to take into trial; contractors have to take advantage of their right to shape rulemaking by presenting how it will affect their daily work.
In addition to voicing his concerns regarding the dearth of comments on the scheduling letter, Mr. Fox invited former Midwest Regional Director Sandy Zeigler and Deputy Shirley Thomas to speak on their recent retirement and the issue of the recalled scheduling letters sent to contractors on June 3, 2011. Ms. Zeigler expressed the desire to make it clear that the original scheduling letters were authorized for mailing and were not related to her decision to retire. Although there has been some concern by OFCCP that the original mass mailing of scheduling letters may have some implications for 4th Amendment rights.
How Significant is Statistical Significance- A Practical Perspective
Alissa Horvitz and Joshua Roffman, Littler Mendelson
This NILG presentation focused on analyses of personnel activity data (e.g., hiring, promotions, terminations, etc.) and some of the consequences of using statistical significance tests (i.e., the “2 standard deviation” Z test, Fisher’s exact test, etc.) as stand-alone evidence of meaningful disparity. The presenters emphasized that in a typical OFCCP audit many statistical significance tests will be conducted, particularly when analyses focus on gender, total minority, and racial/ethnic subgroups. The number of tests may increase substantially when analyses are conducted at both job group and job title levels. This general issue of multiple tests is referred to as the ‘multiple comparisons’ problem in the statistics literature. In these situations some tests of statistical significance will achieve the “2 standard deviation” threshold by chance alone since so many tests are being run, and it is important to consider that when interpreting the results of analyses across an entire affirmative action plan. The presenters also emphasized that:
- Statistical significance tests may also be less informative when there are large applicant pools and selection rates are very high;
- The 4/5th rule or some other measure of magnitude should be used in combination with a statistical significance test;
- The multiple comparisons problem may also be a factor in compensation analyses (where statistical significance tests are conducted in the form of simple t statistics or regression).
Some of the main points from this session parallel recommendations from a 69-member Technical Advisory Committee (TAC) on adverse impact analysis that the Center for Corporate Equality (CCE) organized in 2009-2010. The TAC consisted of a wide variety of EEO experts including industrial-organizational psychologists, labor economists, plaintiff and defense attorneys, consultants, HR practitioners, and former OFCCP and EEOC officials. The TAC report is publically available at: http://www.cceq.org/ts_pub.asp
Regional Directors Panel
OFCCP Regional Directors: Melissa Speer, Michelle Hodge, Evelyn Teague, and Bill Smitherman
All four of OFCCP’s Regional Directors gathered on stage at NILG this year to share regional updates and discuss common audit trends. Some of the noteworthy updates included:
- OFCCP offices have been working with other DOL agencies during compliance evaluations (e.g. Wage and Hour).
- OFCCP has been reaching out to community and faith based organizations (e.g. Tribal Employment Rights Office, Urban League, etc.) in an effort to educate others surrounding their mission as a worker protection agency.
- OFCCP offices have been taking steps to work better with unions.
- OFCCP has developed strategies to determine if a hospital is a covered federal contractor.
- New trends in regional demographics have changed the face of “traditional” discrimination in that now OFCCP is seeing more minority races being favored in some areas.
Perhaps the most informative part of the session for contractors was the reoccurring non-compliance audit trends that each Regional Director noted across his/her region. These trends included:
- Denying OFCCP access to data/information and/or onsite visits.
- Record keeping violations (e.g. no applicant flow records or able to obtain from third party).
- Lack of good faith efforts for outreach and/or recruitment of minorities and/or women.
- Not posting job vacancies to employment services.
- Not having an accessible online application system for all perspective applicants.
Academic Institutions as Federal Contractors – Exploring the Challenges in Compliance
Panel: Marilynn Schuyler, Schuyler Affirmative Action Practice; Christine Iijima Hall, Maricopa Community College; Judy Ferres, Boston College; and Lynette Chappell-Williams, Cornell University
If you work in an academic environment than this panel session was a must attend at NILG. The idea for the session originated during an informal discussion at NILG 2010, when discussants agreed that little guidance is provided to address compliance issues that are unique to academic contractors. For example:
- How do academic institutions obtain qualified candidates while fulfilling posting requirements?
- How do academic institutions determine whether someone is an “employee” as it pertains to inclusion in the AAP?,
Following the informal discussion, ten employees from academic institutions developed a survey to collect information addressing how academic institutions comply with AAP regulations. The survey was launched in March 2011 and results were presented in this session. Some noteworthy survey results include:
- Over 100 academic institutions responded to the survey.
- Over 80% of institutions with more than 5,000 faculty and staff have been audited.
- 30% of the respondents include temporary full-time staff and 20% include temporary part-time staff in their AAP.
- The vast majority of respondents do not include teaching assistants, research assistants, teaching fellows, research fellows, work-study students and other on-campus student workers in their AAP.
- Less than 60% of respondents include part-time faculty, adjunct faculty and post docs in their AAP.
- 2/3 of respondents post full-time faculty positions and ½ post part-time faculty positions with the local employment service.
- About half of the respondents analyze part-time and full-time employee compensation separately and most analyze temporary and non-temporary faculty compensation separately.
Before the session concluded, questions and comments from the audience were addressed by the panelists. One reoccurring comment from the university community was the strong disagreement with OFCCP’s requirement that universities must conduct a visual check and provide gender and/or ethnicity/race information for those employees that do not volunteer the information. Next steps for the panelists include presenting results to Director Shiu.
Affirmative Action for People with Disabilities
George Kettner, Economic Systems, Inc.
Dr. Kettner of Economic Systems Inc. and his research team (Bobby Silverstein of Powers, Sutter and Verville, PC and Marc Bendick of Egan Economic Consultants, Inc.) were commissioned by the Department of Labor, Office of Disability Employment Policy (ODEP) to evaluate the feasibility of utilizing quantitative analyses and establishing numerical goals for employing people with disabilities. One of the driving factors behind implementing a quantitative approach is to provide the contractor community with clear objectives, consistency and transparency in enforcing the regulations.
Dr. Kettner recognized that there are many obstacles to observing and recording disability status that affect the ability to generate reliable estimates of disabled persons in the external workforce as well as in the contractors' workplace. For example, operationally defining what a disability is, identifying those disabilities that are transient as opposed to permanent, identifying optimal data sources,and acquiring accurate self-identification data were all identified as challenges.
Dr. Kettner proposed that the federal contractor community adopt a model similar to what is currently being used to estimate racial/ethnic groups and gender in the available workforce and employer organizations. Dr. Kettner stressed the linchpin for establishing goals was to encourage applicants and employees with disabilities to self-identify pre and post offer. Further, to increase confidence in the accuracy of the estimates, Dr. Kettner suggested federal contractors supplement data derived from the census long form with data derived from the American Community Survey (i.e. a short form of the census that is distributed every year and aggregated every five years).
Dr. Kettner’s sentiment that disabled individuals should not be excluded from employment is shared by federal contractors; however, there was disagreement in the audience regarding the feasibility of quantitative standards and the practicality of implementing Dr. Kettner’s approach. In particular, there was significant concern regarding violating the ADA . For example, a pre-offer identification would violate the ADA because it could be concluded that the employment decision was based on disability status and not qualifications; the number of people with disabilities in the organization would be explicitly displayed on the AAP report.
The Department of Labor has not updated the Disability regulations and has not publically endorsed Dr. Kettner’s position.
Pamela Coukos, Special Advisor, OFCCP
This presentation focused on changes to OFCCPs’ policies related to compensation discrimination enforcement. This talk was of particular interest to many NILG attendees because Secretary of Labor Hilda Solis has promised that OFCCP will settle substantially more compensation cases in the next few years (20%-40% of all settlements), and OFCCP is planning to rescind their compensation standards and voluntary guidelines, which describe the types of employee groupings, statistical analyses, and anecdotal evidence necessary to identify compensation discrimination. Pamela Coukos is new to the agency and has been working with senior OFCCP staff and the Solicitor’s office (SOL) to develop new policies related to compensation. Some key points from this presentation and audience feedback included the following:
- Coukos began by noting that she and the agency are listening to everyone’s feedback regarding compensation, and are trying to make a difference by strengthening enforcement, improving policy, educating workers, and forming partnerships.
- The agency is not currently using a standardized trigger test to narrow in on potential discrimination and request employee level data for more rigorous analysis. Coukos noted that this issue would be moot if the proposed revisions to the scheduling letter are approved, which would require employee level compensation data at the start of an audit.
- Coukos noted that no single test or tool fits every case because it depends on what variables are important to the compensation system for the particular contractor, as well as what they have available in their HRIS.
- Great emphasis was placed on open dialogue. Coukos stated that full disclosure from contractors on what variables are important, existing issues, and other relevant items is important during the review process and will help to expedite the audit.
- OFCCP is still in the process of designing a new compensation data collection tool, and the federal contractor community should be on the lookout for an announcement of proposed rulemaking on this issue.
- Federal contractors in the audience reiterated that they have recently seen substantial inconsistencies in what constitutes potential evidence of discrimination both within and across OFCCP regions and districts. Other audience members suggested that some agency guidance on how to identify potential discrimination is better than no guidance when organizations want to do the right thing and conduct useful proactive analyses.
- “Title VII standards” for compensation discrimination vary from court to court, but most case law has endorsed some reasonable employee grouping mechanism and some form of multiple regression analysis when sample sizes are large enough. Both of these themes were captured in the existing OFCCP standards.
- Experts will disagree on which legitimate explanatory factors should be included in a regression analysis modeled to explain differences in compensation, and there is no ‘one size fits all’ model. The regression model should not include “tainted” variables that could themselves be influenced by discrimination.
Coukos made the format very interactive, and took about 30 minutes of questions from the audience. She ended the session by reiterating that OFCCP’s new stance on compensation enforcement is a work in progress, and that the agency will continue to communicate new guidance as it becomes available, although what form that guidance will take is still unknown.
The Dangers of Social Media – How Employers Can avoid the Pitfalls of Social Networks
Lisa Harpe, Peopleclick Authoria and Christy Kiely, Hunton & Williams
Millions of people are actively engaging in social media. A survey conducted by Jobvite suggested that nearly 83% of Recruiters and Human Resource professionals surveyed were planning to use social media for recruiting job seekers in 2011. Dr. Lisa Harpe -- an Industrial Psychologist and Principal Consultant at Peoplefluent -- and Ms. Christy Kiely -- an attorney at Hunton & Williams – discussed the legal implications of using social media in employment decisions at the 2011 NILG conference.
Dr. Harpe indicated that many Recruiters and Human Resource professionals are turning to social networks (e.g. Facebook) and microblogs (e.g. Twitter) in making hiring, promotion, and termination decisions. However, Dr. Harpe cautioned that the apparent ease of searching for and reviewing the personal details of applicants’ or employees’ through social media can quickly give way to unwanted legal ramifications for an organization.
Dr. Harpe provided several examples of how Recruiters and HR professionals’ actions may violate equal employment law. These include:
- Only looking at the social media of some candidates and using that information to evaluate the suitability of the candidate for the position. For example, you decide to conduct a search of social media only for the female candidates who have applied to a position and decide to exclude females from the interview process who are of child bearing age or who already have children.
- Evaluating social network information differently based on protected class status. For example, two equally qualified candidates have posted pictures of their social activities on Facebook; it appears as though one candidate attends Church on a regular basis and the other does not. You decide to hire the apparently non-religious individual because of a belief that religious people are not a “good fit” with the organization.
- Only considering applicants who have a social media profile. Though seemingly harmless, this approach may be problematic because the demographic variables of the users of social media can vary by the type of social media (i.e. Facebook has more users that are under 40 than over 40).
- Only considering applicants with certain information on their site. For example, if you only consider applicants who appear to be active in Ivy League networks you may inadvertently be limiting your pool of applicants. Some minority groups are underrepresented in certain Ivy League institutions.
It is important to note that any information that is used to screen job seeker’s must be job related or consistent with business necessity. Additionally, once recruiters and HR Professionals begin evaluating an individual’s qualifications via social media they are responsible for accurately dispositioning the applicant according to the Internet Applicant regulation and record keeping requirements.
Dr. Harpe indicated that using social media in hiring may make federal contractors more vulnerable to record keeping violations. For example, if social media is used to evaluate applicants, the web link that was the source of the applicant’s information would have to be saved in a manual log. A manual log is generally more difficult to maintain and web links do not have a permanent shelf life. Hence, during an audit the federal contractor could find that their database has not been properly populated and/or that the web link that was stored as a source of the candidate information is no longer viable. In either of these circumstances, the federal contractor could be penalized by an enforcement agency for not maintaining accurate records.
The negative impact of social media on the employment setting is not limited to identifying suitable candidates for employment. Ms. Keily discussed how employer’s and employees’ actions on social media may result in undesirable outcomes for the organization (i.e. negative publicity for the organization, the publication of confidential information, retaliation, etc.) and, in some circumstances, legal proceedings.
Ms. Keily also reminded the federal contractor community that employers are not entitled to look at applicant/employee information merely because it has been posted on the Internet. In addition, certain forms of speech and individual actions are protected under the law (i.e. commenting on work conditions, organizing other employees to change the conditions of the workplace, etc.).
Both Dr. Harpe and Ms. Keily recommended that federal contractors develop and implement social media policies to assist in guiding employee behavior and to protect the organization from legal vulnerability. Recent estimates suggest that 45% of organizations do not have a social media policy (HCCA/SSCE 2011 survey). In addition, Ms. Keily recommended that employers maintain current and objective job descriptions that highlight the employer’s expectation of the employee. Job descriptions that are current and based on objective standards can be helpful in defending an organization against an employee if the organization can make a connection between the employee’s behavior on a social medial site and the expectations established in the job description.
In summary, regardless of how your organization plans to use social media in the employment arena there are a few guiding principles that may reduce your organizations legal exposure and assist your organization with EEO regulatory compliance:
- Create a detailed social media policy for employees to guide their general behavior with regard to the organization and set expectations regarding disciplinary action for violating the policy.
- Create a detailed social media policy to provide clear guidance on how social media should be reviewed for prospective or current employees; particularly, if the organization has chosen to evaluate individuals’ social media as part of the employment screening process.
- Apply all social media policies consistently and fairly for all individuals associated with employment at your organization.
- Put procedures in place to ensure that decision makers are screening individuals’ social media sites for information that is job related and a function of business necessity.
- Keep accurate records of the information that was used to screen individuals in your searches.
- Be aware of state and federal laws governing the information organizations can access and evaluate about individuals when making employment decisions.
Dr. Harpe suggested that the best approach to avoiding legal conflicts that are the result of social media… is to avoid using social media when evaluating current and prospective employees. However, if your organization is committed to using social media in the employment context, one guaranteed “best practice” is to make sure your organization is complying with equal employment principles outlined in federal and state laws.
Navigating the Landscape of OFCCP Compliance
Panel: David Cohen, Eric Dunleavy, Dan Biddle, David Fortney, Jon Geier, Joe Lakis, and Mickey Silberman
A panel discussion titled “Navigating the Landscape of OFCCP Compliance” was moderated by Eric Dunleavy of DCI Consulting Group. The panel was comprised of Dan Biddle from Biddle Consulting Group, David Cohen from DCI Consulting Group, David Fortney from Fortney and Scott, Jon Geier from Paul Hastings, Joe Lakis from EEAC, and Mickey Silberman from Jackson Lewis. In an effort to ensure equal participation and provide creative, impactful, and brief presentations, each of the panelists had 5 minutes to present 10 slides and each slide auto-progressed every thirty seconds with or without the panelist. Index cards were distributed to collect audience questions while the panelists presented their slides. After the presentations, Dr. Dunleavy asked some initial follow-up questions and then asked audience questions for the panel to answer. The following section briefly summarizes each panelist’s presentation.
Proposed Changes to the OFCCP Scheduling Letter - Jon Geier
Jon Geier presented on the proposed changes to the current scheduling letter, which included a “Top Ten” list of changes to be aware of. They were as follows:
- “Leave your leave policies with the OFCCP.” This change relates to a proposed request by OFCCP to collect contractor’s leave policies through the scheduling letter. This request may have little utility and create unjustified burdens for contractors.
- “The CBA won’t be enough.” This change relates to OFCCP’s proposed request for “any other documents you prepared, such as policy statements, employee notices or handbooks, etc. that implement, explain, or elaborate on the provisions of the collective bargaining agreement” in addition to the collective bargaining agreement (CBA).
- “One word will make a big difference.” This change relates to the fact that OFCCP may require that contractors submit their employment data by both job group AND job title, rather than the current request for job group OR job title dependent on the particular contractor’s employment decision-making process.
- “Say your farewells to ‘minority all.’” This change relates to OFCCP’s proposal for data to be submitted by five race/ethnicity categories, which (oddly) is not consistent with current EEO-1 reporting requirements and a 2008 OFCCP directive on race/ethnicity categories.
- “Pools for terminations and promotions.” This change relates to the OFCCP request for pools of employees considered for terminations and promotions, which may not accurately represent the selection procedures utilized by contractors to make termination and promotion decisions.
- “Applicant data must include those for whom race/ethnicity is unknown.”This change relates to the proposed request by OFCCP for the number of applicants that do not self-identify race/ethnicity. There is question regarding the utility of this request when weighed against additional contractor burdens, and how these data would be used.
- “Individual employee data.” This change relates to OFCCP’s push for data at the individual level for analyses of compensation discrimination. Contractors currently submit aggregate data, and are required to submit individual level data if there is a red flag in the aggregate.
- “Bonuses, and commissions, and incentive comp! Oh my!” This change relates to the proposed request from OFCCP for contractors to include supplemental compensation information like bonuses and stock options, which are different in nature from base salary/wage rate. This request has created concern for how such information will be reported and analyzed.
- “February: It’s not just for Valentine’s anymore.” This change relates to OFCCP’s proposal to collect all contractor compensation data as of February 1st of the review year, which does not coincide with data collection or potentially with proper compensation analysis.
- “Dust of your Sections 503/4212 plans.” This change relates to OFCCP’s proposed request for copies of accommodation policies and records of accommodations. This request is troubling in regard to privacy rights and contractor burdens.
VEVRAA Regs: The Proposed Changes – Mickey Silberman
Mickey Silberman presented on the proposed changes to the VEVRAA Regulations – with an emphasis on how these would “change the world” for the contracting community. Mr. Silberman commented on the political context of the VEVRAA proposed changes, stating that this initiative appears to be a result of priorities in the White House. The most significant changes for contractors, according to Mr. Silberman, will be seen in the types and levels of burdens placed on them by the proposed amendments to VEVRAA. He reported employers have been expressing the following notions:
- OFCCP is substantially underestimating the contractor burden involved with the regulations
- The proposed “benchmarks” are unclear in calculation and are based on inconsistent, unreliable data
- There is no precedent for the 5 year record keeping obligation
Regardless of these concerns, OFCCP has announced that it will NOT rescind the proposed amendments to VEVRAA.
OFCCP and Compensation - David Cohen
David Cohen presented on compensation, focusing on a variety of recent OFCCP activities related to compensation analysis. These included:
- Implications of the OFCCP proposed rescission of the Interpretive Standards and Voluntary Guidelines. Officially, these documents have not be rescinded and replaced, and OFCCP is still asking for similarly situated employee groups (SSEGs) and conducting regression analyses.
- OFCCP’s reach for secondary data in the United Space Alliance case. Mr. Cohen stated this case may not be of great interest in the future should OFCCP get approval for the new scheduling letter, as this would provide OFCCP with this data on the front end of analysis.
- OFCCP’s switch from using the 5:30:3 trigger test to the 2 or 2 test. This trigger test is not a test of pay discrimination, nor does it seem to be a true screening tool as it appears to identify nearly all contractors as needing further analysis. In response, Mr. Cohen suggests that contractors should expect the secondary data requests.
- The advent of the Division of statistics and Technology (DST). This division will be given the detailed compensation data submitted by contractors in order to run analyses. There is still question regarding how these analyses will be conducted and what procedure will be used when a regression analysis flags potential discrimination.
- OFCCP’s move toward conducting compensation analyses by racial/ethnic sub-groups rather than by total minority analyses. Mr. Cohen asked in response whether UGESP applies to compensation; would analyses be based on the highest paid group as the favored group?
- The use of certain variables in regression analysis. Although the National Office has said they do not use age as a proxy for experience, the ALJ ruling in OFCCP vs. AstraZeneca required this proxy variable in regression analyses. Similarly, the National Office has not been clear on the appropriateness of using squared variables in regressions, yet they were endorsed in the AstraZeneca case.
- The use of a cohort analysis. Mr. Cohen specified that this is an individual disparate treatment analysis, thus requiring OFCCP to identify a particular discriminatory compensation decision.
In closing, Mr. Cohen recommended that contractors continue to conduct proactive analyses using multiple regression analysis and where statistically significant differences are found, contractors should conduct additional analysis, research the causes of the differences, and make salary adjustments when justified.
Testing and Adverse Impact – Dan Biddle
Dan Biddle presented on the topics of test enforcement and litigation and adverse impact, as well as best practices for both. Dr. Biddle provided some background information about testing, adverse impact, and what the law says about both. He also reviewed the OFCCP “testing directive” from 2004 and the investigation process, which requires a compliance officer to conduct an adverse impact analysis and obtain a validity study when impact exists. Some highlights included:
- A recent court case involving testing is Ricci v. DeStefano (U.S., No. 07-1428, cert. granted 1/9/09). However, this was not an adverse impact case and Dr. Biddle noted that the OFCCP FAQs address this case and state that their ruling will not change contractor’s obligations related to validity.
- Local validation allows for test specifications to be tailored to job specifications, which often increases test validity. Local validation also communicates to employees and the community that the contractor is concerned about fairness and avoiding discrimination.
- A test should never be “one-size fits all” and contractors should always ask test vendors for a manual and validation research. Contractors should be careful to avoid the common mistakes of using one test for all jobs without validity evidence or continuing to use a test just because it’s always been done. Contractors shouldn’t rely too heavily on the test publisher’s validity evidence or outdated job analysis results.
- Some best practice suggestions for testing include: (1) validate to select qualified employees, (2) prepare a 15C report for audits and litigation, and (3) consider “alternate selection procedures” (e.g., banding, personality tests, etc.).
- Emphasis was placed on the fact that contractors must act on any findings of adverse impact. Some best practice suggestions for adverse impact include: (1) validate practices, procedures, or tests that start showing AI, (2)proactively aggregate and analyze data (before someone else does!), and (3) when audited or in litigation be sure an issue actually exists. It is also important to not forget that an interview is a test!
An Overview of OFCCP Trends- Joe Lakis
Joe Lakis provided an overview of OFCCP trends, focusing on changes over the last 15 years for OFCCP staffing, audits, complaint investigations, financial settlements, and conciliations agreements. Enforcement trends and a look at upcoming items were also included. Trends included:
- Funding has steadily increased from 1995 to 2009, with large increases in 2010 and 2011. Fiscal year 2011 saw the highest budget in OFCCP history.
- Staffing saw a large decline from 2006 through 2009, with a large spike in 2010.
- OFCCP compliance reviews have remained relatively stable over the years, with a spike in 2003 and 2004.
- Resolved complaint investigations approached 600 in 1995 and then steadily decreased, with 2009 and 2010 seeing approximately 100 or less complaints resolved.
- Financial settlements have varied over the years, but OFCCP had a sizable increase in 2008 and then drastic decrease in 2009, which remained stable in 2010.
- From 2004 to 2011, the percentage of audits closed steadily increased, with s sharp increase from 12% in 2010 to 18% in 2011.
Mr. Lakis called the current enforcement plan full-scale and aggressive. He also stressed that compliance reviews are no longer contingent on findings during the desk audit phase. This is due in large to the recent Active Case Enforcement (ACE) directive that replaced the Active Case Management (ACM) from 2003. There is an increased emphasis on traditional affirmative action compliance (i.e., AA for protected veterans and persons with disabilities) and focus on internal auditing obligations. Mr. Lakis noted there has been attention placed on individual, as well as systemic discrimination. We have seen a closer inspections of personnel files, increased number of interviews (as a result of increase in full-scale audits), and requests for explanation for small differences in compensation for few employees.
Additionally, as emphasized during this panel discussion and the rest of the conference, Mr. Lakis closed his presentation there is a lot of activity currently happening and approaching in the coming year. He reminded everyone of the regulatory items that are coming available over the next year:
- FAAP Directive (June 2011)
- Compensation Data Collection Tool ANPRM (“imminent”)
- Section 503 NPRM (August 2011)
- Construction Industry NPRM (November 2011)
- FCCM Revisions (Fall 2011)
- Sex Discrimination Guideline NPRM (February 2012)
- VEVRAA Final Rule (Spring 2012)
- Section 503 Final Rule (Summer 2012)
Recent ALJ Decisions, Complaints, CDs, and CAs – David Fortney
David Fortney presented on recent Administrative Law Judge (ALJ) rulings, consent decrees, complaints, and conciliation agreements, all a part of the “hierarchy” of OFCCP claims and resolutions.
- The most important, recent ALJ ruling came from the United Space case (OFCCP v. United Space Alliance LLC, DOL, OALJ, No. 2011-OFC-00002, 2/28/11), where the primary issue involved the scope of the review expanding beyond the desk audit phase. Findings from the case gave OFCCP broad latitude in determining which criteria to apply in assessing compliance (compensation data in this case). However, the judge did rule that OFCCP was unable to expand the audit to encompass Section 503 and VEVRAA issues. USA is currently challenging the ALJ’s decision. As a side note, this could be a moot point for compensation if the scheduling letter is changed.
- Significant consent decrees included claims of discrimination in compensation and hiring. A notable, recent consent decree was for AstraZeneca (June 2011), a compensation claim of discrimination against females for sales specialist positions. Mr. Fortney noted that the AstraZeneca consent decree applied factors included in the Standards and Guidelines that are up for rescission. Also noteworthy are the variables included in the regression analyses related to this case (e.g., age as a proxy for experience, market reference point).
- Some common factors in the other consent decrees for hiring cases were gaps in or missing required records and concentration on entry-level/lower-tier jobs. Monetary settlements ranged from $167,000 to $495,000 and class sizes ranged from 95 to 1,106 affected members.
- There are two recent, significant complaints (note, a complaint is filed before an ALJ if an audit is not conciliated). Both complaints focus on hiring discrimination claims, one a race claim and the other gender discrimination.
- Recent conciliation agreements have focused on entry-level hiring, for race or gender discrimination. Monetary settlements ranged from $288,000 to $1.65 million, and class sizes ranged from 151 to 970 affected members.
Eric Dunleavy, the moderator of the session addressed the panel with a series of pre-determined questions and then opened up for questions from the audience. Questions from the moderator touched on issues addresses by the panelists, including: the scheduling letter, VEVRAA, compensation, testing, audits, and recent court cases. Questions from the audience tended to focus on compensation, individuals with disabilities, protected veterans, and general items. The majority of audience and panel questions focused on the many changes coming out of the agency. Audience members expressed concern about what the next five years might bring and how to best prepare and manage risk, as well as anxiety about what to do to in the interim before changes become official. The panel emphasized that the contractor community should continue to be proactive during the interim, continue developing plans, analyzing personnel activities and compensation, and to be sure to focus on recruitment efforts and outreach to individuals with a disability and veterans.
by David Cohen, Eric Dunleavy, Joanna Colosimo, Marcelle Clavette, Amanda Shapiro, Jana Moberg, and Eileen Curtayne, DCI Consulting Group