The Wall Street Journal Reports on OFCCP Pay Investigation Results

On March 15, 2016, The Wall Street Journal released an article focusing on the results of pay discrimination investigations carried out by the Office of Federal Contracts Compliance Programs (OFCCP) through their standard compliance review process. The author’s inquiry was informed by settlement outcomes, OFCCP activity measures, and interviews with experts in the field, including David Cohen with DCI. The article suggests that the agency’s results have been inadequate given the importance of their charge to address the wage gap.

After 7 years under Director Patricia Shiu, the article reports that OFCCP has had few results based on pay discrimination investigations. Between the start of 2010 and September 2015, the total relief funds collected by OFCCP equaled about $5 million. When compared to a single $5.5 million settlement collected under the Bush administration in 2004, pay discrimination settlements have notably decreased. This downward trend in settlements is also evident in that only 8 compliance reviews resulted in a pay discrimination settlement during fiscal year 2015, the lowest annual sum of pay cases thus far under this administration.

In defense of OFCCP’s results, Director Shiu said that the agency has made considerable changes that have required extensive training of personnel. She noted that the increased scope of audits has led to a more lengthy review of each audited contractor, which partially resulted from the rescission of the 2006 Standards and Guidelines and implementation of a new Directive. She also noted that the agency had a workforce overhaul, adding statisticians and compliance officers. Although not noted in the article, contractors may also recall that OFCCP rescinded the protocol of “Active Case Management”, replacing it with “Active Case Enforcement,” as well as implemented several new Executive Orders and revised regulations; all of which likely contributed to the extensive training mentioned.

OFCCP has received an increased budget for several years with a current $105 million annual budget, up from about $82 million in 2009. In spite of increased resources, OFCCP’s results have been underwhelming, which may call into question the methods utilized to investigate pay discrimination. Director Shiu stated that systemic compensation cases take time to develop and that the agency has many cases in the pipeline. It will be interesting to see what the remainder of the fiscal year brings.

By Jana Garman, Consultant, and Amanda Shapiro, Senior Consultant at DCI Consulting Group 

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