by Joanna Colosimo & David Morgan, DCI Consulting Group

Office of Federal Contract Compliance Programs Orange Area Office conducted a webinar on April 18, 2012 to discuss various components of federal affirmative action plans. Federal contractors and subcontractors were invited to attend the webinar, which was presented by compliance officers Jo Ann Post and Annette Sincock, and moderated by Patti Kuhaiki. The intent of the training session was to review how adverse impact is determined for personnel activity, develop an action plan to correct under-utilization, and examine record retention requirements. The webinar concluded with a question and answer (Q&A) session that allowed listeners to submit questions or comments electronically.

The webinar hosts began by highlighting the good faith efforts contractors can engage in to help achieve affirmative action goals, including record-keeping practices, posting positions on social networking sites, and examining the effectiveness of recruitment by evaluating those protected groups who applied for positions in applicant flow data.

The Q&A portion of the webinar, which was driven by questions submitted by the listening audience, centered mostly on the presenters’ overview of adverse impact. Specifically, information on how to calculate adverse impact for selections during a contractor’s AAP year was provided, including the following guidance:

· Compare selection rates of each protected group and observe the group that has the highest selected rate as the referent group

· Calculate the impact ratio by comparing the selection rate for each group with that of the highest selected group· Utilize the 4/5ths rule (also known as the 80% rule) to flag adverse impact

· Offers of employment can be counted as an “opportunity” (sic), and contractors will not be penalized for counting them as positive selection decisions in their analyses

There appeared to be some confusion over some commonly used methodologies in flagging areas of adverse impact in terms of technical and legal best practices throughout the webinar, and during the Q&A session, on the differences between the “Standard Deviation Method” and the “80% rule”. Best practice recommendations in calculating adverse impact, as discussed in the Center for Corporate Equality’s Technical Advisory Committee Report on Best Practices in Adverse Impact research publication (Cohen, Aamodt & Dunleavy, 2010), would indicate that a combination of both statistical significance testing (e.g., the Standard Deviation (SD) method, Fisher’s Exact Test, etc.) and practical significance testing (e.g., the 4/5ths rule) is useful in determining risk areas. However, the presenters mentioned that their OFCCP region typically only uses the SD method, and indicated that this method translates into “something greater” than the 80% Rule. They noted that other regions may not agree with this view.

It is important to highlight that the OFCCP compliance officers advocated the use of a compare to highest selected methodology, in lieu of a traditional approach (i.e., males vs. females, minorities vs. non-minorities).

The Code of Federal Regulations at 41 CFR 60-2.17 (b)(2) require that contractors conduct analyses to “determine whether there are selection disparities”. Until recently, OFCCP has taken a traditional approach to these analyses, such that white and male applicants or employees were considered the ‘previously advantaged group’ (the referent group) by default. Male applicants were naturally compared to Female applicants, and White applicants were compared to either a total minority aggregate, or to separate racial/ethnic groups considered to be ‘previously disadvantaged’ (e.g., Blacks, Hispanics, Asians, etc.).

It is important to note that this traditional approach is inconsistent with proscriptions from the Uniform Guidelines on Employee Selection Procedures at 41 CFR 60-3 (UGESP). According to UGESP, ‘a selection rate for any race, sex, or ethnic group, which is less than four-fifths…of the rate for the group with the highest rate will generally be regarded…as evidence of adverse impact.” In other words, the advantaged group is not necessarily fixed, and therefore, neither is the disadvantaged group.

A compare to highest selected group method has been actively utilized by the OFCCP in some recent enforcement. For example, OFCCP has settled cases where white and male applicants were members of the disadvantaged group, and previously disadvantaged groups (e.g., Hispanics, Pacific Islanders, females) were actually considered to be the favored groups. Additionally, OFCCP has identified one “previously disadvantaged’ group as highest selected (e.g., Hispanic), and settled cases using ‘all others’ (e.g., Non-Hispanics, including white applicants), as the disadvantaged group. These analyses are very different from traditional male vs. female and non-minority vs. minority comparisons. Best practices in conducting adverse impact analyses should rely on the guidance found in the Uniform Guidelines on Employee Selection Procedures (41 CFR 60-3) and Title VII litigation.

The presenters concluded the presentation by providing the contractor community with examples of action plans and remedies that would be useful in alleviating adverse impact, such as the dissemination of information, employee training, and diverse outreach and recruitment efforts. Interestingly, these examples were also used as examples of good faith efforts for addressing under-utilization from the OFCCP presenters.

One additional note of interest appeared during the Q&A session. One participant asked how an individual complaint based on personnel discrimination would be handled by the OFCCP. Contrary to prior guidance given from the OFCCP national office, the presenters indicated that an individual complaint would be referred to the EEOC. In prior guidance delivered from OFCCP officials, contractors have been given the indication that the OFCCP would not only enforce systemic discrimination issues, but investigate individual complaints as well.Unfortunately, the presentation was not made publically available, as the hosts indicated it was not approved for distribution by the national office.

Cohen, D. B., Aamodt, M.G., & Dunleavy, E. M. (2010). Technical advisory committee report on best practices in adverse impact analyses. Washington, DC: Center for Corporate Equality.

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