Buckle Up: OFCCP Continues to Press the Gas on Steering

As previously discussed in this blog, a recent trend in OFCCP audits is the focus on job assignment and/or steering. What is steering?  Steering refers to a company practice where members of a protected class are disproportionately “steered” into a certain type of job(s), resulting in an over or underrepresentation of that group (e.g., Women hired into entry-level grocery store positions are disproportionately assigned to the bakery department. Men are assigned to the meat department where pay and promotion opportunities are better). This is not a new area for OFCCP; decades ago it was common practice for compliance officers to conduct a job area acceptance range (JAAR) analysis. This analysis was used to purportedly identify areas of minority or female concentration and underrepresentation by department, using an “expected range” based on the establishment population. This was popular for some time, but went out in the 90s because the underlying methodology for the JAAR analytics had no validity and did not appropriately identify areas of concern.

This renewed focus in steering was foreshadowed over a year ago when OFCCP released its compensation directive (Directive 307 (renumbered on 9/16/2013 as Directive 2013-03)), where steering was listed by OFCCP as a main example of an identifiable practice that results in systemic pay discrimination. In recent compliance reviews the focus of steering has become a compensation issue rather than hiring or utilization issue, as it was when the JAAR analysis was popular. OFCCP wants the ability to look at more than just base pay differences, as evidenced by their rescission of the Voluntary Standards and Guidelines which they felt were too restrictive. Directive 307 allows for flexibility in conducting analyses and greatly increases the type of information that will be requested and analyzed:

“Differences may be observed with regard to base pay; job assignment or placement; opportunities to receive training, promotions, and other opportunities for advancement; earnings opportunities; and differences in access to salary increases or add-ons, such as bonuses.”

Compliance officers are currently being trained to look for instances of steering, especially with regard to job assignment or placement. In addition to using variables collected during a compensation request, they will also be evaluating the workforce analysis looking for over or underrepresentation of protected class members in a particular job, department, or other grouping. Other factors that may be challenged by the OFCCP under the steering initiative include overtime hours, shift, territory, etc.  Contractors should anticipate that compliance officers will be looking at any decisions subject to discretion and steering may be alleged regardless of statistical indicators in traditional analyses (e.g., hiring, compensation, promotions) because unconventional methods of investigation are used.

To mitigate the risk of a steering case DCI strongly recommends that companies have a requisition-based hiring system that is hiring for a specific position (this is a best practice regardless). Open hiring or posting a generic “Any Position” greatly increases (and now almost guarantees) a focused investigation on steering. The requisition systems force the candidate to apply for a specific job and remove the subjectivity of the job placement. It is also recommended that organizations standardize personnel processes, specifically hiring, promotions, and compensation. Monitor these policies to ensure they are consistently followed. We expect to see many violations for steering in settlements over the next couple of years. We also expect to see them accompanied by allegations of hiring discrimination, but for the other protected class that was allegedly steered into the better paying job. Huh? An example of this is the G&K Services Co. settlement where OFCCP asserted that G&K Services steered females into lower-paying “light-duty” positions regardless of their qualifications, as well as discriminated against male applicants in the “light duty” hiring process. G&K Services is not the only example; DCI has also started to see this model of violations with other companies.

By: David Cohen, President and Amanda Shapiro, M.S., Consultant, DCI Consulting Group

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