Tuesday, October 26, 2010

OFCCP Sends Request to Rescind Compensation Guidelines to the OMB

by Patrick Nooren
EVP Biddle Consulting Group

The OFCCP submitted an official notice to the Office of Management and Budget (OMB) of their intent to rescind the compensation analysis standards and guidelines originally published in June, 2006. This should come as no surprise to BCG clients and BCGI members given the lack of success the OFCCP has had in enforcing these standards. In hindsight, the writing should have been on the walls from the onset. While overall technically, statistically, and legally sound, requiring the Agency to use multiple regression analyses (MRA) that meet certain minimum sample size requirements to support claims of compensation disparities creates a very difficult, uphill battle for enforcement. Look for the OFCCP to issue new guidelines in the future with softened text regarding the use of multiple regression and new, additional content regarding their current enforcement tactics related to investigating individual disparities (much like Equal Pay Act investigations).

Stay tuned.

Thursday, October 21, 2010

OFCCP Posts Large Settlement with Meat Processing Company

News Release posted by OFCCP on 10/21/2010.


OFCCP News Release: [10/21/2010]
Contact Name: Elizabeth Todd or Juan Rodriguez
Phone Number: (972) 850-4710 or x4709
Release Number: 10-1461-DAL
US Labor Department settles hiring discrimination case with Tyson Refrigerated Processed Meats in Vernon, Texas

Affected job applicants to receive back wages, interest and job offers

VERNON, Texas — The U.S. Department of Labor's Office of Federal Contract Compliance Programs has announced that Tyson Refrigerated Processed Meats Inc. has agreed to settle findings of hiring discrimination against 157 African-American and 375 Caucasian applicants for laborer positions at the company's bacon processing plant in Vernon.

"The Labor Department is committed to leveling the playing field for all workers," said OFCCP Director Patricia A. Shiu. "A company that profits from taxpayer dollars must not discriminate, period."

OFCCP investigators found that African-American and Caucasian applicants were less likely to be hired than similarly situated Hispanic applicants over a two-year period.

Under the terms of the conciliation agreement, Tyson Refrigerated Processed Meats will pay a total of $560,000 in back pay and interest to the 532 applicants. Additionally, the company will make job offers to 59 of the 532 eligible class members as laborer positions become available and revise the practices, policies and procedures it uses to recruit, track and hire applicants to fully comply with the law and immediately correct discriminatory practices.

This agreement follows litigation by OFCCP involving two other subsidiaries of Tyson Foods Inc. In 2008, a Labor Department administrative law judge found that TNT Crust in Green Bay, Wis., systematically discriminated against Hispanic applicants in its hiring. In September 2010, OFCCP filed an administrative complaint against a Tyson Fresh Meats plant in Joslin, Ill., for systematically rejecting female applicants seeking entry-level positions.

OFCCP, an agency of the U.S. Department of Labor, enforces Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans' Readjustment Assistance Act of 1974 that prohibit employment discrimination by federal contractors. The agency monitors federal contractors to ensure that they provide equal employment opportunities without regard to race, gender, color, religion, national origin, disability or veteran status.

Thursday, October 7, 2010

OFCCP Lands Large Settlement in Discrimination Case

The Associated Press has reported that the OFCCP has landed a large settlement in another hiring case. See posting from NY Times below:

NC Bottler to Pay $495K on Discrimination Claims
Published: October 7, 2010

"CHARLOTTE, N.C. (AP) — The second-largest bottler of Coca-Cola products in the nation will pay $495,000 to settle a federal case involving charges of racially discriminatory hiring practices.

The Coca-Cola Bottling Company Consolidated, a Charlotte-based firm that is separate from the Atlanta-based Coca-Cola Company, will pay the money in back wages plus interest to 95 black and Hispanic jobseekers who applied for sales positions in 2002, according to the U.S. Department of Labor.

In addition, the bottler has agreed to offer jobs to those applicants until at least 23 are hired.

The labor department's Office of Federal Contract Compliance Programs said an investigation determined that qualified nonwhite applicants were not being hired at the same rate as qualified white applicants. In some cases, the black and Latino applicants had more experience and education than some of the whites who did get jobs, according to the agency.

The office launched the investigation because the bottler is a federal contractor, supplying Coke-brand products to a number of military and government agencies.

"Being a federal contractor is a privilege that comes with an obligation to ensure equal opportunity in employment," said Patricia Shiu, director of the contract compliance office, in a statement.

The bottler agreed to the settlement, but admits no wrongdoing in the case, according to a statement provided by Alison Patient, director of corporate affairs at the company."

"Coca-Cola Bottling Co. Consolidated did not and does not discriminate against any person for any reason," the statement said. "There were legitimate non-discriminatory reasons for not hiring certain applicants who are the subject of this claim."

Monday, October 4, 2010

Bringing back the EO Survey?

The U.S. Department of Labor (DOL) is interested in bringing back the Equal Opportunity (EO) Survey even if the Paycheck Fairness Act (PFA), which requires one half of federal contractors to receive the EO survey yearly, is not overhauled. On the other side, the Office of Federal Contract Compliance Program (OFCCP) is seeking input from stakeholders on how to improve the Survey and what new data should be implemented on the upcoming version. Though nothing is certain, rather than asking “If” the survey is coming back, we should be asking “When” and in what form; the original or a modified version.

The purpose of the EO survey, as stated in CFR 41 60-2.18 (a) was to “provide the OFCCP compliance data early in the compliance evaluation process, thus allowing the agency to more effectively identify contractor establishment for further evaluation.” The survey first came out during the Clinton administration but during the Bush administration, OFCCP stopped using the EO Survey due to the results of a study by Abt Associates Inc. that revealed that the survey was not a valid tool for predicting systemic discrimination. Though this study was criticized by many as being flawed, the EO survey was still discontinued.

The survey itself was required to be completed and submitted back to the OFCCP within 45 days of notice. It was estimated to take about 21 hours (on average), but often took double or even triple that time. Federal contractors with multiple locations were struggling to put this information together while working on their Affirmative Action Plans as well. Imagine having 500 sites and being required to complete at least 250 (50%) surveys on those sites in 45 days.

Some of the flaws that were found on the original survey included: survey did not ask for data information on part-time employees even though Affirmative Action Plans do include this information. Also, it asked contractors to identify the full/part time status of their applicants, though most contractors rarely keep track of FT/PT applicant status.

Furthermore, the definition of an applicant is outdated and the new internet applicant regulations need to be employed.

Finally, the compensation section has garnered some special concern; the survey required compensation data by the old (9) EEO category or affirmative action job group, rather than the new (10) EEO categories. The issue becomes apparent when analyzing the compensation data because it is without a doubt that a CEO will significantly earned more than an office supervisor. But under the old rubric both are considered EEO 1 – Officials and Managers. Many have proposed aggregating the EO survey over the new 10-category system in the same way the 2007 overhaul of the EEO-1 did.

Announced September 28th by Secretary of Labor Hilda L. Solis, the DOL needs to collect more data to ensure fair and equitable pay, especially in regards to women. She did not state what additional data they would like, but it may mean additional recordkeeping on the part of those required to fill out the survey.
There is little question about if it’s coming back, but when, and what this means for federal contractors. This brings us back to our original question: what changes could the revised EO survey bring to federal contractors? Once revised the EO survey can become a very useful tool. OFCCP could likely throw out their current 16 factor algorithm that helps them pinpoint who and what location to audit. Meaning that if a federal contractor’s survey looks good, and audit can be avoided. Let’s just hope that this time, the average time to complete this entire process is consistent with what is stated and a suitable time frame will be provided.