WILL YOUR METHOD OF IDENTIFYING UNDERUTILIZATION BE ACCEPTED BY THE OFCCP?

As shared in an earlier blog, the OFCCP released an updated Federal Contractor Compliance Manual (FCCM) in August 2013. The FCCM does not create new law, but is the operating manual that compliance officers will use throughout the compliance evaluation and thus provides useful direction in preparing affirmative action plans and programs. In chapter one of the updated FCCM, guidance is provided for how a compliance officer will evaluate the utilization analysis during the desk audit phase. A utilization analysis is a comparison of female and minority incumbency to availability. Underutilization is identified when there are fewer female or minority incumbents in a particular job group than would reasonably be expected given their availability. There are several acceptable methods for completing this analysis, which include: any difference, whole person rule, 80 percent rule of thumb, or statistical significance. This has not changed since the last edition of the FCCM.

However, what has changed is a clarification that contractors “must uniformly apply the same standard to all job groups, as appropriate.” The manual goes on to say that “contractors should not use more than one method so as to mask underutilization.” DCI interprets this guidance to mean that only one methodology should be used when conducting the utilization analysis; a combination of methods should not be used in assessing underutilization (e.g., 80 percent rule + whole person rule). However, there may be an exception to this standard. The manual acknowledges that “occasionally a different method may be more appropriate to determine underutilization. For example, in some instances it may not be reasonable for contractors to use the 2 standard deviation method. No matter the method used, the contractor should be able to explain why it selected that method.” DCI interprets this guidance to mean that a contractor would be able to use statistical significance as the methodology, but apply one test for large job groups (e.g., standard deviation) and another test for small job groups (e.g., exact binomial). The use of each statistical significance test should still be consistently applied given the group size.

by Amanda Shapiro, M.S., Consultant, and Keli Wilson, M.A., Senior Consultant, DCI Consulting Group

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