NILG Notes - OFCCP Changing Direction Regarding Compensation Analysis Strategy

OFCCP Update August 9, 2010.

Dr. Javaid Kaiser gave a presentation on "How should the Contractor Prepare When Compensation Disparity is Found at the Desk Audit Stage?" at the National ILG conference in Las Vegas last week and while BCG Institiute will be giving a more formal presentation on all the NILG news shortly, we wanted to get a few notes posted right away.

1. The OFCCP intends to rescind the current compensation analysis guidelines and release new guidelines in the near future. The OFCCP is considering a new strategy as the current standards are not producing results.

2. The "Red-Flag/Trigger Test" is also no longer being used. This was clear and it makes sense for many reasons that BCG will review in our NILG wrap-up webinars being scheduled now.

3. The concept of Similarly Situated Employee Groups "SSEGs" is still alive and well. It was clearly noted that "Similar does NOT mean equal" and a job group may be a SSEG if skills, responsibilities and job complexity are similar.

4. Employers should be looking for all of the variables that affect pay, not just the 12 Factors that OFCCP requests.

5. A few factors that may trigger a request for detailed compensation data are: large differences in pay, an employee complaint, missing data, inacurrate data, bad coding of data, and data that is unecessarily splintered.

6. Pay differences are being evaluated on a case-by-case basis. This is creating a lot of anxiety in the industry and there are specific reasons why the trigger test is not effective for identifying significant differences in compensation. In the Friday morning session, BCGi's Dr. Patrick Nooren discussed why people should not be dependent on tools such as a Trigger Analyses to identify potential pay issues. Be sure to attend our NILG wrap up and our repeat of the BCGi presentation to learn why.