This blog continues the ongoing discussion of the implications of Directive 307 on proactive pay equity analyses. As discussed in an earlier blog, deciding which racial/ethnic subgroups to compare in a pay equity analysis and at which unit of analysis can become difficult given the ambiguity of Directive 307. In the absence of clear direction from OFCCP on how to conduct proactive analyses, contractors should be thinking about whether their analysis strategies should be revised. Here are some strategies to consider.
Racial/Ethnic Subgroup Comparisons
One useful approach to deciding which racial/ethnic subgroups to analyze is to identify the highest paid group (making up a reasonable portion of the relevant workforce) for comparison to individual subgroups. This approach is consistent with the Uniform Guidelines on Employee Selection Procedures (UGESP) approach to conducting adverse impact analyses. Anecdotally, it also appears to be an approach OFCCP is following in some audits. It should be noted that Hispanics are an ethnic group, rather than a race, and comparisons of Hispanics to aggregated Non-Hispanics should be considered.
- Clearly defined pay structures;
- Accurate job titles, job groups and salary codes;
- Documentation of factors used to make pay decisions, including exceptions falling outside the normal pay practices.
