Tuesday, December 23, 2008

NILG Conference - Constructing and Using Diversity Metrics: Basic and Beyond

Constructing and Using Diversity Metrics: Basic and Beyond

Speaker: Valerie Hoffman, Founder and Chair, Seyfarth Shaw LLP’s Affirmative Action and Diversity Practice

The pre-conference workshop presented by Valerie Hoffman at the NILG focused on the basics of diversity metrics and some practical applications for developing basic and advanced diversity metrics. Some key differences were noted between diversity and affirmative action. Affirmative action is mandated by law and includes actions taken to ensure nondiscrimination of females, minorities, veterans, and individuals with disabilities. Diversity is not mandated by law and embraces each trait that makes us unique. The primary dimensions of diversity that are most easily measurable include: age, gender, race, mental/physical abilities & characteristics, ethnic heritage, and sexual orientation. It is important to choose efforts and characteristics to measure thoughtfully. Without a background and diversity in context, gathering certain demographics may create a negative view of the diversity initiative. Setting the stage to be proud of diversity as opposed to counting numbers for preferences is an important distinction to make. Some basic quantitative measurements can include the following analyses: workforce demographics (race, ethnicity, gender), quarterly progress reports, year-over-year trends, by business unit and department, and by job level. More complex levels of analyses can be conducted and include some of the following variables: performance ratings, employee compensation, training opportunities, high potential list composition, sexual orientation, movement, affinity group participation, generational studies, etc. In order to establish a process for progress, it is important to practice inclusion and not preferences. Many of these basic reports can be easily constructed with the proper documentation. Please feel free to contact BCG for some more information on you can create diversity metrics within your organization.

Self Identification Requirements for Applicants with Disabilities

Self Identification Requirements for Applicants with Disabilities
and/or Veterans

By: Marife Ramos, Sr. Consultant Biddle Consulting Group

The release of the long-awaited “Internet Applicant” definition that went into effect on February 6, 2006 (formally titled “41 CFR Part 60–1 Obligation To Solicit Race and Gender Data for Agency Enforcement Purposes; Final Rule”) also gave rise to new recordkeeping requirements (41 CFR 60-1.12). As part of the recent update to the rule, contractors are required to solicit the gender and race information from all applicants. However, it does not specify the stage in the selection process when an invitation to self-identify must be extended to applicants. Since contractors are required to show good faith efforts in the solicitation of gender and race information from their applicants, it makes good business sense for contractors to extend an invitation to self-identify at the very first stage of the application process. Also, the employer could instead choose to solicit gender and race information in one or more of the succeeding stages of the selection process so long as the selection of race and gender is not required and can, in fact, be declined.

It is a different story however, when it comes to the solicitation of disability and/or veteran status of an applicant. The employer has a very small window of opportunity to solicit this information. The applicants’ disability and/or veteran status may not be solicited by contractors before a job offer is made. Invitations for self- identifications can only be made by contractors at the post-offer stage but before the applicant becomes an employee (i.e., on the payroll) (41 CFR 60-250.42).

What does this mean to contractors? It means that “in general,” contractors may not solicit disability and/or veteran status from their applicants in the same manner as the employers request for identification of race and gender. Self-identification invitations should only be made after a job offer is made but also NOT after the applicant becomes an employee.

In order to better address the self-identification requirements; contractors should consider developing two (2) self-identification forms for their applicants:

1) to solicit gender and race for applicants in general; and
2) to solicit disability and veteran status after a job offer is made but before official employment occurs (race and gender information can again be solicited at this stage).

It would also be a good idea to establish a well-defined system that will consistently remind those with recruitment and hiring responsibilities to provide a self-id form (which should include a solicitation of veteran/disability status) to an applicant who was offered a job but before such applicant becomes officially an employee. For example, include the self-id form with the employment packet that the prospective employee needs to complete before starting work (e.g., I-9, W-4, etc.).

NILG Conference - OFCCP: An Overview of Statistical Applications

OFCCP: An Overview of Statistical Applications
Speaker: Dr. Javaid Kaiser, Director of Statistical Analysis, OFCCP

In this session, Dr. Kaiser introduced himself as the new head statistician for OFCCP. As the head of the department his focus in the presentation was to discuss how he wanted to shape the OFCCP and what he felt were the key things that Federal contractors should be focusing on when it comes to conducting statistical analyses. He began with a few statistical procedures that would benefit the contractor community for self-evaluation of employment data, then he went into changes that are happening at the OFCCP and he closed with audit tips.

There is a new name for the statistical analysis division at the OFCCP – the Division of Statistics and Technology (DST). The DST has adopted a new directive that all audit-related statistical work must reviewed by the heads of the division before a Notice of Violation can be issued. The reason for this is to ensure that the analyses are conducted correctly.

The statistical analyses that the DST uses during selection reviews (and those that contractors are urged to use) are the binomial test for large sample sizes, Fisher’s Exact for small sample sizes, Logistic regression, Mantel-Haenzel, and the Breslow-Day tests. Dr. Kaiser mentioned that Logistic Regression, Mantel-Haenzel and Breslow-Day tests are more complicated than the other statistical analyses and should be conducted by statistical experts.

Listed below are some current challenges that the OFCCP faces when conducting compliance reviews:
Submittal of incomplete data.
Developing SSEGs is a difficult process – the OFCCP might change the process.
It’s difficult analyzing data that has small sample sizes. OFCCP’s solution is to use non-parametric tests.
Handling pay grade, department, location, shift, etc. differences when analyzing certain groupings.

Some suggestions that Dr. Kaiser gave regarding data submittal during a compliance evaluation are:
· Clearly label all 12 factors for the compensation data request and explain why any are missing.
· Compensation data should be the same as the snapshot data for the plan.
· Disclose any bargaining union agreements

Dr. Kaiser finished the session discussing DST’s plans for improvement in the following areas in order to decrease the time spent on reviews:
Development of the SSEGs.
Review the triggers for compensation.
Data verification protocol.
Explore parametric statistics.
Standardize operating procedures throughout all OFCCP offices.
Uniform business rules nationwide.
Automate business process.

OFCCP Directive - The G-FIVE Initiative

The Good Faith Initiative for Veterans Employment (G-FIVE Initiative)

The OFCCP has announced the creation of a program targeted at encouraging the employment if military veterans by formally recognizing federal contractors and subcontractors that are making good faith efforts to employ covered veterans. The program named, “Good-Faith Initiative for Veterans Employment” or “G-FIVE Initiative” provides a 3 year exemption for contractors or subcontractors who receive a G-FIVE rating.

Based on the new G-FIVE initiative, OFCCP’s regional offices may recommend to its national headquarters office a G-FIVE rating for those contractors and subcontractors that have “demonstrated outstanding achievements in the employment of covered veterans.”

OFCCP will consider the following factors when evaluating contractors and subcontractors for a G-FIVE rating:

- Evidence of covered veterans in the contractor’s workforce
- Evidence of an increase in the number of covered veterans in the contractors workforce
- The number of partnerships with local veterans organizations
- An established partnership with the state or local workforce agencies
- Recruitment efforts at educational institutions to reach students who are covered veterans.
- The number of job advertisements targeting veterans posted within the community.
- For contractors, evidence that demonstrates a commitment to encourage their subcontractors to seek qualified covered veterans for employment opportunities.
- Affirmative action steps taken to attract special disabled or disabled veterans through the nearest Veterans Administration job placement program.
- The number of on the job training opportunities provided to covered veterans

Contractors and subcontractors are not required to complete all of these activities in order to be considered. It is important to note that the G-FIVE rating and recognition is by establishment and does not apply to the company as a whole.

There are two ways in which a contractor can be considered:

1. OFCCP regional directors can make G-FIVE recommendations to the national headquarters, following compliance reviews of those contractors and subcontractors.
2. Contractors and subcontractors can self-nominate by submitting to the appropriate regional directors a written statement expressing its interest in being considered for the G-FIVE rating. If contractors have not undergone a full compliance review within the last 24 months, the OFCCP will conduct a compliance review at the time of self-nomination.

Contractors who do receive a G-FIVE rating will be recognized on OFCCP’s website and will receive certificates of recognition.

OFCCP Directive - Recordkeeping

Electronic Recordkeeping

In light of the transition to solely electronic recordkeeping systems, the OFCCP published a new directive regarding electronic recordkeeping in May of 2008. The timeframe required for keeping files and the correct way to convert and store files were reviewed during the OFCCP’s Homestretch webinar conducted on September 10th, 2008.
The record retention periods according to Executive Order 11246 are as follows: If you are a contractor with 150 or fewer employees, or do not have a contract of at least $150,000, the record retention period is a minimum of one year. Any contractors that employ over 150 employees or have a contract greater than $150,000, must keep their records for a minimum of two years. These regulations have not changed and are not new.
All paper records can be converted to an electronic format if the medium used accurately reproduces the paper original and would constitute a duplicate or substitute copy of the original paper record under Federal law. The records also need to be accurate and must be able to be converted back into a legible and readable paper copy available to be provided, should the OFCCP request them.
Original paper records may be disposed of following the complete transfer to the electronic format, only if the electronic file accurately reproduces the original paper records. Contractors that use the electronic system must keep their files accurate, accessible, and complete for the minimum record retention timeframe.

OFCCP Directive - Online Application Systems

Online Application Systems

One of the topics that was discussed during the OFCCP’s September 10, 2008 webinar (OFCCP: The Homestretch) is the Directive on the use Online Application Systems by contractors. The topic was presented by Ms. Naomi Levin, Acting Branch Chief, Policy Development and Procedures.

The emergence of advance technologies has also prompted most employers to use Online Application System (OAS) as a tool in their application process (either exclusively or in combination with the traditional paper application). Therefore, it became necessary for compliance monitoring agencies, such as the OFCCP, to ensure that these OAS are accessible to ALL interested individuals, including to persons with disabilities.

OFCCP’s Online Application Systems Directive mainly focuses on the accessibility of these OAS to persons with disabilities. It provides guidance to contractors’ Affirmative Action obligations under Section 503 of the Rehabilitation Act of 1973, as amended (Section 503), the Vietnam Era Veterans' Readjustment Act of 1974, as amended, 38 U.S.C. 4212 (VEVRAA), and Title I of Americans with Disabilities Act of 1990, as amended (ADA). The directive provides that:

During compliance evaluations, the OFCCP will also include a review of the contractor’s online application system. The review will ensure that equal opportunity is provided to disabled persons. It will also include a review of whether the contractor provided reasonable accommodations to persons with disabilities, unless such accommodations will cause undue hardship to the employer (e.g., too costly).
Individual complaints that involve the contractor’s OAS can also be investigated and reviewed by the OFCCP.

The OFCCP also offered some recommended actions in order to ensure equal opportunities are extended to persons with disabilities:

A notice on how to obtain reasonable accommodations should be clearly displayed on the contractor’s OAS. The notice should contain:
the contact information (e.g., name/title or the person, phone, number, e-mail address, location address, etc.)
a clearly stated process in obtaining reasonable accommodations
The OAS should be able to operate with adaptive technologies used by persons with disabilities (e.g., voice recognition)
Provide an alternate way to apply for a job besides the OAS (e.g., filling out paper application forms)
Kiosks should be accessible to persons with mobility impairments

The notice on how to obtain reasonable accommodation is also recommended to be placed on the very first screen of the of the online application system.

To learn more about this new directive, you may visit www.dol.gov/esa/ofccp

OFCCP: 2008 Homestretch Presentation - Audits

OFCCP: 2008 Homestretch - Audits

The OFCCP recently conducted a webinar to discuss significant accomplishments within the last fiscal year and future initiatives for fiscal year 2009. Among the initiatives for 2009, the OFCCP discussed future compliance evaluations.

Contractors should prepare for an audit storm to hit. Beginning in the first week of October 2008 the OFCCP will send out Corporate Scheduling Announcement Letters (CSAL) to organizations with two or more establishments on the potential list for compliance evaluation. Following the CSAL, during the second week of October 2008 the OFCCP will be sending 2,500 scheduling letters (for Compliance Evaluation). Another batch of 5,000 scheduling letters is scheduled to be release in March 2009.

If 7,500 potential audits in 2009 are not enough, the OFCCP announced a new initiative in which one in fifty audits will be scheduled for an automatic on-site review. The OFCCP announced they will randomly choose establishments for on-site review.

Keep in mind not all contractors will receive a CSAL and establishments not on a CSAL can still be audited.

The OFCCP discussed a few other important notes listed below:
· The OFCCP will continue their focus on systemic discrimination.
· The OFCCP is continuing to streamline their procedure to allow them to maximize resources.
· A majority of compliance evaluations are closed after the desk audit.
· The OFCCP will incorporate quality audit standards to ensure compliance and responsibility to VEVRAA and 503.

With the forthcoming storm of audits and new directives, contractors need to be prepared. Make sure you have an Affirmative Action Plan in place before receiving a 30 day scheduling letter. This will allow maximum time to prepare for audit submittal. Also, make sure you are up-to-date and compliant with all EEO/AA regulations and requirements. This includes Veteran requirements. While this has not typically been an OFCCP focus it sounds as though that may change. If you are not familiar with EEO/AA regulations and requirements please contact an expert, like Biddle Consulting Group, to help you prepare.

Understanding Defenses from the Perspective of the OFCCP

Biddle Consulting offers newsletters on many important EEO topics at our webiste www.biddle.com . We recently provided several articles about the presentations given at the National ILG meeting. Enclosed is a summary of the OFCCP presentation on what forms of excuses and defenses that they will not accept during the audit process.

Presenter: Sandra Scott Ziegler
Midwest Region OFCCP

Sandra Scott Ziegler is veteran officer of the OFCCP out of the Midwest Region. Sandra and her team provided one of the most unique and energetic NILG presentations that we have ever seen. Sandra ran a Powerpoint slide show that had music and animation that kept the audience in stitches for well over an hour. The purpose of the presentation was to inform contractors about all of the excuses and shortcomings that they see from Federal contractors that will not be considered acceptable by OFCCP in an audit. This presentation is significant because OFCCP tends to be coy about how they operate behind the scenes so when they come to a conference and provide a list of activities and excuses that they consider red-flags, BCG will make a point to pass the message along to our clients and make sure they pay attention.

The slideshow was broken out by a series of headers that acted as main bullets that fell under the headline of “Don’t Go There.”


To identify often used defenses that will not work in OFCCP audits.
OFCCP’s opinion is that clarifying these common excuses will help contractors save time and money as well as enhance voluntary compliance.

The main points:

The Good Faith Defense

· Contractor misconception: “When utilization exceeds availability there is no discrimination” This is totally false. There can be potential discrimination in transactions such as hiring, promotions and terminations even if a job group has an incumbent percentage higher than what is available.

· OFCCP handed out a copy of the TNT case (Tyson Foods) where OFCCP won a case where the Tyson Foods defense team tried, unsuccessfully to show they were not discriminating.
o OFCCP proved discrimination against Hispanics
o The Courts said that a balanced workforce does not provide a get out free card for discrimination
o Courts prefer actual applicant flow rather then workforce statistics because those were the available individuals who had interest in the job. (this serves as a reminder why contractors need to collect proper applicant data)
o Intent does not mean a company is inherently evil. Companies could be deceived by thinking that they already achieved a goal for a certain group so their focus was placed somewhere else resulting in unintentional discrimination

Self Validating Test Defense

· Another contractor misconception: “Collective common sense says a test is valid for a job.”
· OFCCP response: “tests DO NOT self validate”
· Tests must be: Tailored to the job, follow Uniform Guidelines on Employee Selection Procedures (UGESP) and accurate
· Are less discriminatory tests available that would meet the contractor’s needs? (Usually there is in increase in Adverse Impact against a group in tests that have specific requirements for lifting, language, etc.)
· Any test should be validated to test for AI à Uniform Guidelines (UG) says with 80% rule but other regulations say also SD.
· In the TNT case – The contractor only asked Spanish speaking applicants if they spoke good English. This was considered an informal test not uniformly applied.
· Audience question: If creating a question on an application that asks if the applicant can lift 30 lbs (check box), is this a test? Yes, it’s a selection procedure and it needs to be validated

Refusal to Submit the 12 Item Compensation Data

o In the Bank of America case: they refused to submit the 12 item data. They said if the OFCCP is asking for it they must have reasonable suspicion. OFCCP response: No reasonable suspicion is necessary and there are no 4th amendment issues associated with the request.
o The purpose of a desk audit is to determine if there is a problem. See 60-1.43 and 1.4(a) for the regulation citation.
o In the Ledbetter case: Authority to gather information (compensation) was questioned. The OFCCP will gather all factors that influence compensation
§ Time frame occurrence having to do with a statute of limitations
o The purpose of the desk audit is to determine if there is reason to believe there is a violation

“I’m not on the scheduling list”
o Contractors often try to get out of an audit by stating they should not have been selected for an audit.
o Periodic reviews go beyond the FCSS list which is used for regular desk audits. There are also CMCE: corporate management compliance evaluations, FAAP: functional AAP audits, and DAS: directive review as well as other selection criteria not provided by OFCCP.

Contractor misconception: “We don’t have two (2) standard deviations to infer Adverse Impact or discrimination.”

o The courts have held that two or more standard deviations permit an inference of discrimination.
o Two standard deviations is NOT a threshold that must be met in order to continue an investigation
o Examples of reasons OFCCP will dig deeper:
o 0% Female and Minority in an areas you’d expect availability
o Tip to OFCCP about something potentially offensive
o Number of applicants = Number of hires (1:1 ratio)
o Quality check
o Any number of things could lead to further investigation
o There are no standards that says they cannot investigate further if desired

Correcting to have a result that shows less then two (2) standard deviations

o Another contractor misconception: Contractors argue that OFCCP cannot make the contractor eliminate the entire disparity as opposed to getting the result within two standard deviations.
o OFCCP: No, if results are discriminatory then shortfall should eliminate ALL disparity
o Favored group for comparison is not always male and white. OFCCP can go after selection disparities against all races and genders. (BCG note, we have seen OFCCP pursue Adverse Impact against whites and men in recent audits)

Statistics alone are not enough

o A pattern or practice case can be built on statistics alone. An increase in statistical disparity is more compelling to OFCCP
o If a contractor does not rebut a prima facie case of intentional discrimination then the courts can infer discrimination based on statistics
o OFCCP will seek anecdotal evidence where possible. Contractors should provide anecdotal evidence if available
o Comparisons of selected v. non-selected
§ Applied v. Offered

Statistical vs. Practical Significance (PS)

o Contractors argue that Practical Significance can imply that a contractors’ Adverse Impact analysis is not significant if a change in two hires brings the result to less than two standard deviations.
o OFCCP (Q&A #21 in UG): UGESP states that only switching one is allowed and it would have to bring the selection rate within 80%
§ Change 1-2 from fail to pass
§ Not an 80% violation
§ Not greater then 2 SD

The TNT Case – OFCCP argued that applicant pool was not atypical compared to competitors

o Would have to show the specialized recruitment drew unqualified individuals for the position
o Inflated race/gender
o The OFCCP can use competitor’s applicant pools as a comparison

“The data submitted for the audit is an aberration”

o Contractors attempting to argue to OFCCP that their audit issues should be attributed to: “You picked a bad year.”
o “My data is so bad it’s not worth analyzing” – Inadequate data does not reduce liability (BCG note – in fact we would expect it to dramatically increase the OFCCPs scrutiny of your organization)
o OFCCP can select the time period for review
o The OFCCP becomes suspicious of what has been done after the scheduling letter has been received.

Other defenses that will also receive scrutiny

o Lopsided refinements (look at both sides, i.e. men and women)
o Tolling liability because of case processing
o Mitigate at a higher pay rate
o Inadequate data reduces liability

Friday, December 12, 2008

E-Verify Requirements for Federal Contractors

Starting January 15, 2009 all federal contractors and sub-contractors are required to use the Department of Homeland Security’s E-Verify for all new hires. Its main purpose is to ensure that all new hires have legal rights to work in the U.S. This new requirement was put into effect through President George W. Bush’s signing of Executive Order 12989 on June 6, 2008. Please see full copy at http://www.whitehouse.gov/news/releases/2008/06/20080609-2.html

In order to be prepared for this new requirement, you must enroll in E-Verify either on line at https://www.vis-dhs.com/EmployerRegistration/StartPage.aspx , by calling the Department of Homeland Security (DHS) Customer Support line at 1-888-464-4218, or via e-mail E-Verify@dhs.gov. You have to use E-Verify for each new hire. Records of each submission and corresponding results should be retained for two years for all federal contractors.

Monday, December 8, 2008

New Directive and other OFCCP resources

People consistently ask BCG "Why is OFCCP asking me for this?" Of course "this" may be a number of different things, but recently OFCCP has been rolling out new expectations as part of their latest audit push so we wanted to give people an idea what to expect going into 2009.

The bottom line, is that while OFCCP is still making most of their money on recordkeeping and adverse impact violations, they are still forging ahead into new territory on many new directives that are causing uncertainty in the contractor community.

One concern in-particular that we are seeing in almost every new audit is OFCCP asking for not only the structure of how the contractor is posting jobs, but for what Veterans Groups they are posting to, who is their contact and most importantly what the results of the postings are. Requesting details on the number of Veterans who applied is a new request. Whether OFCCP has the right to require this information is currently under debate. However, that has not stopped OFCCP from requesting the data in writing during a desk-audit.

Also, OFCCP is now reviewing the contractor's Applicant Tracking System to determine if there are any barriers that Veterans or the Disabled may face when applying for a job online. If there are perceived barriers, then an on-site visit might be triggered. There is a link below to the OFCCP Applicant Systems Directive in addition to a link on OFCCP resources that all contractors should bookmark.


Applicant Systems Directive: