FY2017 OFCCP Enforcement Update

One of the things The Institute for Workplace Equality is most well-known for is the Annual OFCCP Enforcement Update, which this year featured DCI’s own David Cohen along with Jon Geier, a partner at Paul Hastings. The recorded webinar is free to the public and can be viewed on The Institute's website.

 

The discussion centered around four key topics: buzzworthy concerns in the federal contractor community, significant administrative law judge (ALJ) rulings, OFCCP enforcement activity, and future predictions for the agency. Below are some of the major highlights:

 

What’s on your mind? (What are federal contractors concerned about right now?)

  • The EEOC and OFCCP merger is dead due to a lack of support in the contractor community and in Congress.
  • The EEO-1 “Component 2” is likely dead as well, but Cohen and Geier cautioned employers to keep an eye on state activity regarding pay laws and ensuing pay reporting requirements.

 

Significant Administrative Law Judge (ALJ) rulings

  • The 4th Amendment applies to the OFCCP, according to the ALJ in OFCCP v. Google, Inc. Requests needed to be reasonable and relevant in scope, and there are limits to what OFCCP can obtain, especially if they have not been explicit about their findings.
  • Raise questions about what is reasonable, while still being willing to work with the agency. Do not be afraid to ask for citations from the regulations.

 

FY2017 OFCCP Enforcement Summary

  • OFCCP collected more than $23 million over the fiscal year, the largest amount in over 20 years.
  • OFCCP settled its largest compensation case in over a decade ($5 million, including back pay and interest) with financial services firm State Street Corporation.
  • There is a continued focus on compensation, hiring, and steering. Cases relating to termination have been nonexistent, while promotion cases are rare.
  • OFCCP seems to be targeting the tech and financial sectors, with an affirmed commitment toward developing their regional Centers of Excellence.
  • Cohen and Geier also commented on an uptick in audits focused on compensation at several higher education institutions.
  • Other trends related to compensation include:
    • OFCCP requesting multiple years of Roster snapshots to combine into one multi-year regression analysis, posing several potential data analytic issues.
    • OFCCP taking the position that only human capital factors (i.e. all factors an individual brings to an employer) are appropriate to include in a regression, while establishment factors (i.e. such as time in company, time in job, time in grade, level, and performance) are not appropriate to include.

 

Future predictions for OFCCP

 

  • Under the Trump Administration, OFCCP will likely adopt some type of safe harbor provision or certification program that would allow contractors to annually submit their AAPs and certify that they have reached a baseline level of compliance. Federal contractors that fail to certify or demonstrate compliance would be targets for enforcement.
  • There will likely be a continued focus on discrimination occurring at professional-level positions (e.g., in tech and finance) and further efforts to support the development of regional Centers of Excellence to investigate this area.
  • Lastly, pay equity issues will stay at the forefront due to bipartisan support; therefore, federal contractors should remain on the lookout for pay legislation at the state level and the possibility of a better compensation data collection tool being developed in the future.

 

By Jeff Henderson, M.P.S., Associate Consultant, and Dave Sharrer, M.S., Senior Consultant

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