On November 23rd, 2010 the OFCCP posted notice of a lawsuit filed against another Federal contractor for alleged discriminatory hiring practices. The suit highlights Federal contractors' continuing struggles with Adverse Impact in the hiring/selection process.
There has been a consistent trend in recent years where the OFCCP has continuously identified disparities in the hiring process against various race and gender groups. Lawsuits such as the one listed below should serve as a reminder to Federal contractors that detailed recordkeeping, especially during the hiring process, is critical for contractors to gain the ability to proactively identify disparities in hiring before the OFCCP conducts an audit. Often, when a desk audit letter arrives it may be too late to prevent the contractor from being subjected to scrutinty resulting in a conciliation agreement or worse.
Posted by OFCCP, November 23, 2010.
Office of Federal Contract Compliance Programs (OFCCP)
Latest Events and News
News Release
OFCCP News Release: [11/23/2010]
Contact Name: Rhonda Burke or Scott Allen
Phone Number: (312) 353-6976
Release Number: 10-1605-CHI
US Department of Labor sues Meyer Tool Inc. for systemic discrimination against African-Americans
Complaint seeks remedies for affected machinist applicants
CINCINNATI - The U.S. Department of Labor's Office of Federal Contract Compliance Programs has filed an administrative complaint against Meyer Tool Inc., a federal contractor that manufactures engine parts for the aerospace industry. The suit alleges that Meyer Tool systematically rejected African-American job applicants who sought entry-level machinist positions at its plant in Cincinnati.
To see the entire post select the link below:
http://www.dol.gov/ofccp/OFCCPNews/LatestNews.htm#news1
Wednesday, November 24, 2010
Wednesday, November 17, 2010
Senate Does Not Pass the Paycheck Fairness Act
The Paycheck Fairness Act bill, designed to lessen the gender wage gap, did not get the necessary Senate votes in order to move forward (it garnered only 58 votes out of the necessary 60 votes).
Under the current Equal Pay Act, once an employee established a prima facie evidence of pay discrimination based on sex, the burden of proof shifts to the employer to show that the said wage gap is due to "any other factor other than sex."
The Paycheck Fairness Act sought to replace the "any other factor other than sex" defense to "bona fide factor(s)." This meant that the employer would have had to demonstrate that the at-issue pay gap is due to business necessity. Once the employer successfully demonstrated the business necessity defense, the burden would shift back to the employee. The employee would then have to show that an alternate employment practice is available (i.e., an employment practice that will serve the same purpose BUT will not create the significant pay gap) and that the employer chose not to implement such an employment practice. The passing of the Paycheck Fairness Act would have made it easier for employees to bring class action lawsuit.
Under the current Equal Pay Act, once an employee established a prima facie evidence of pay discrimination based on sex, the burden of proof shifts to the employer to show that the said wage gap is due to "any other factor other than sex."
The Paycheck Fairness Act sought to replace the "any other factor other than sex" defense to "bona fide factor(s)." This meant that the employer would have had to demonstrate that the at-issue pay gap is due to business necessity. Once the employer successfully demonstrated the business necessity defense, the burden would shift back to the employee. The employee would then have to show that an alternate employment practice is available (i.e., an employment practice that will serve the same purpose BUT will not create the significant pay gap) and that the employer chose not to implement such an employment practice. The passing of the Paycheck Fairness Act would have made it easier for employees to bring class action lawsuit.
Monday, November 15, 2010
Corporate Scheduling Announcement Letter (CSAL) To Continue
Today, the chair of the National Industry Liaison Group for Affirmative Action Planning sent notice out to the regional ILG's that after a short delay, OFCCP has elected to continue sending out the Corporate Scheduling Announcement Letter (CSAL). As recently as October Pat Shiu, Director of OFCCP, stated at the National Employment Law conference in San Francisco that she would be considering the CSAL in the future but there was no clear direction at this time.
The release of the CSAL is welcome news to Federal contractors as the letter provides advance notice to the contractor regarding the number and location of establishments that can expect to receive a desk audit letter in the near future. While there has been concern from various agencies in the past that the CSAL might allow contractors to focus on compliance only in establishments where they know an audit letter may show up, it is the experience of BCG that the CSAL heightens overall compliance awareness.
Contractors should also be reminded that the previous cap of 25 establishment no longer exists and that OFCCP is not bound by the CSAL in determining which sites they may choose to audit. In the recent past, BCG has found that the desk audits typically follow the CSAL listing, although it is not a certainty that the various OFCCP regions will only audit sites on the list.
To read more about the guidelines associated with the CSAL, see the OFCCP Frequently Asked Questions link here:
http://www.dol.gov/ofccp/regs/compliance/faqs/csalfaqs.htm
The quote from the NILG regarding the pending release of a new round of CSALs is here:
"The NILG Chair confirmed with Director Shiu's office that the OFCCP will continue sending CSALs as advance notice for establishments that have been identified for potential compliance reviews. The OFCCP has stated that the next round of CSALs will be mailed out in the next two months. Please share this information with your members."
The release of the CSAL is welcome news to Federal contractors as the letter provides advance notice to the contractor regarding the number and location of establishments that can expect to receive a desk audit letter in the near future. While there has been concern from various agencies in the past that the CSAL might allow contractors to focus on compliance only in establishments where they know an audit letter may show up, it is the experience of BCG that the CSAL heightens overall compliance awareness.
Contractors should also be reminded that the previous cap of 25 establishment no longer exists and that OFCCP is not bound by the CSAL in determining which sites they may choose to audit. In the recent past, BCG has found that the desk audits typically follow the CSAL listing, although it is not a certainty that the various OFCCP regions will only audit sites on the list.
To read more about the guidelines associated with the CSAL, see the OFCCP Frequently Asked Questions link here:
http://www.dol.gov/ofccp/regs/compliance/faqs/csalfaqs.htm
The quote from the NILG regarding the pending release of a new round of CSALs is here:
"The NILG Chair confirmed with Director Shiu's office that the OFCCP will continue sending CSALs as advance notice for establishments that have been identified for potential compliance reviews. The OFCCP has stated that the next round of CSALs will be mailed out in the next two months. Please share this information with your members."
Monday, November 1, 2010
EEOC Reviews Use of Credit History as a Factor in Employee Selection
Recently, the EEOC posted a press release regarding a public meeting that was held to hear opinions about the use of credit checks as a factor in hiring decisions. There has always been significant concern in the EEO field about the use of subjective criteria in hiring and the use of credit checks as part of employee selection has been a hot topic for many years.
See Press Release posted on the EEOC website below:
http://www.eeoc.gov/eeoc/newsroom/release/10-20-10b.cfm
PRESS RELEASE
10-20-10
EEOC Public Meeting Explores the Use of Credit Histories as Employee Selection Criteria
Growing Practice Can Have Disparate Impact on African-Americans, Latinos; Are Not Predictive of Job Performance, Some Witnesses Say
WASHINGTON—The U.S. Equal Employment Opportunity Commission (EEOC) held a public Commission meeting today to hear testimony from representatives of various stakeholder groups as well as social scientists and the Federal Trade Commission on the growing use of credit histories as selection criteria in employment.
“High unemployment has forced an increasing number of people to enter or re-enter the job market,” said EEOC Chair Jacqueline A. Berrien. “As a result, an ever increasing number of job applicants and workers are being exposed to employment screening tools, such as credit checks, that could unfairly exclude them from job opportunities. Today’s discussion provided important input into our agency’s work to ensure that the workplace is made free of all barriers to equal opportunity.”
The Commission heard from a diverse set of experts. Chi Chi Wu of the National Consumer Law Center (NCLC) expressed grave concerns that the use of credit histories is mushrooming at the time of economic instability for many Americans, noting that the use of credit histories “create[s] a fundamental ‘Catch-22’ for job applicants,” especially during this period of high unemployment and high foreclosures, both of which have a negative impact on credit.” She observed, “You can’t re-establish your credit if you can’t get a job, and you can’t get a job if you’ve got bad credit.” This view was echoed by several of the witnesses.
Sarah Crawford of the Lawyers’ Committee for Civil Rights Under Law and Dr. Avis Jones-DeWeever from the National Council of Negro Women, explained that the use of credit histories in the employment context can have a disparate impact on a range of protected groups, including people of color, women, and people with disabilities. While the use of credit checks as employment screens increases, Crawford cited studies that show credit history is a poor predictor of job performance. Additionally, she pointed out that many credit reports are riddled with errors or incomplete information, a view that was echoed by Wu of the NCLC, making whatever predictive value they might have even less reliable.
Representatives from the business community—Michael Eastman of the U.S. Chamber of Commerce, Christine V. Walters of the Society of Human Resources Management (SHRM) and Pamela Quigley Devata of the law firm Seyfarth Shaw, LLP—told the Commission that the use of credit histories is permissible by law, limited in scope, and predictive in certain situations of reliability.
Walters of SHRM said that “13 percent of organizations conduct credit checks on all job candidates … [and] another 47 percent … consider credit history … for select jobs,” but for those employers, “credit histories are but one piece of the puzzle.” It is the experience of SHRM member companies that very few utilize credit histories for every single job opening. Devata asserted that the use of credit histories is driven, in part, by the need for background information on potential employees in a current environment when it is difficult to obtain any but the most basic information in job references.
However, Dr. Michael Aamodt, an industrial psychologist, said that although there is considerable research that supports the use of credit scores in making consumer decisions, there is little research exploring the implications of using credit checks in the employment context. Given the potential for discriminatory exclusion, he concluded that it would be wise to use an applicant’s credit history only within the context of a thorough background check.
This meeting is one of several throughout the year that will examine barriers to employment and their potential adverse impact on protected groups. The statements of all the panelists, along with their biographies, can be found on the EEOC’s website at http://www.eeoc.gov/eeoc/meetings/10-20-10/index.cfm. A complete transcript of the testimony will be posted later.
The EEOC enforces the nation’s laws against employment discrimination. More information is available on the Commission’s website at www.eeoc.gov.
See Press Release posted on the EEOC website below:
http://www.eeoc.gov/eeoc/newsroom/release/10-20-10b.cfm
PRESS RELEASE
10-20-10
EEOC Public Meeting Explores the Use of Credit Histories as Employee Selection Criteria
Growing Practice Can Have Disparate Impact on African-Americans, Latinos; Are Not Predictive of Job Performance, Some Witnesses Say
WASHINGTON—The U.S. Equal Employment Opportunity Commission (EEOC) held a public Commission meeting today to hear testimony from representatives of various stakeholder groups as well as social scientists and the Federal Trade Commission on the growing use of credit histories as selection criteria in employment.
“High unemployment has forced an increasing number of people to enter or re-enter the job market,” said EEOC Chair Jacqueline A. Berrien. “As a result, an ever increasing number of job applicants and workers are being exposed to employment screening tools, such as credit checks, that could unfairly exclude them from job opportunities. Today’s discussion provided important input into our agency’s work to ensure that the workplace is made free of all barriers to equal opportunity.”
The Commission heard from a diverse set of experts. Chi Chi Wu of the National Consumer Law Center (NCLC) expressed grave concerns that the use of credit histories is mushrooming at the time of economic instability for many Americans, noting that the use of credit histories “create[s] a fundamental ‘Catch-22’ for job applicants,” especially during this period of high unemployment and high foreclosures, both of which have a negative impact on credit.” She observed, “You can’t re-establish your credit if you can’t get a job, and you can’t get a job if you’ve got bad credit.” This view was echoed by several of the witnesses.
Sarah Crawford of the Lawyers’ Committee for Civil Rights Under Law and Dr. Avis Jones-DeWeever from the National Council of Negro Women, explained that the use of credit histories in the employment context can have a disparate impact on a range of protected groups, including people of color, women, and people with disabilities. While the use of credit checks as employment screens increases, Crawford cited studies that show credit history is a poor predictor of job performance. Additionally, she pointed out that many credit reports are riddled with errors or incomplete information, a view that was echoed by Wu of the NCLC, making whatever predictive value they might have even less reliable.
Representatives from the business community—Michael Eastman of the U.S. Chamber of Commerce, Christine V. Walters of the Society of Human Resources Management (SHRM) and Pamela Quigley Devata of the law firm Seyfarth Shaw, LLP—told the Commission that the use of credit histories is permissible by law, limited in scope, and predictive in certain situations of reliability.
Walters of SHRM said that “13 percent of organizations conduct credit checks on all job candidates … [and] another 47 percent … consider credit history … for select jobs,” but for those employers, “credit histories are but one piece of the puzzle.” It is the experience of SHRM member companies that very few utilize credit histories for every single job opening. Devata asserted that the use of credit histories is driven, in part, by the need for background information on potential employees in a current environment when it is difficult to obtain any but the most basic information in job references.
However, Dr. Michael Aamodt, an industrial psychologist, said that although there is considerable research that supports the use of credit scores in making consumer decisions, there is little research exploring the implications of using credit checks in the employment context. Given the potential for discriminatory exclusion, he concluded that it would be wise to use an applicant’s credit history only within the context of a thorough background check.
This meeting is one of several throughout the year that will examine barriers to employment and their potential adverse impact on protected groups. The statements of all the panelists, along with their biographies, can be found on the EEOC’s website at http://www.eeoc.gov/eeoc/meetings/10-20-10/index.cfm. A complete transcript of the testimony will be posted later.
The EEOC enforces the nation’s laws against employment discrimination. More information is available on the Commission’s website at www.eeoc.gov.
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