How Effective is the OFCCP? The GAO Answers – Part III

We started this series with an overview of the GAO’s findings as to the OFCCP’s effectiveness. Just to recap, here are the five areas of weakness found by the GAO:

1. Weakness in OFCCP’s process for selecting contractors for Compliance Evaluations makes it challenging to know the extent to which Equal Opportunity Requirements are followed;

2. OFCCP Relies on Voluntary Compliance with Requirements;

3. OFCCP’s Compliance Evaluation Assignment Process May Result in Geographic Imbalances;

4. Reported Inconsistencies in Compliance Evaluations May Be Exacerbated by Lack of Training;

5. Most Violations Are Resolved Through Conciliation

In our previous post, we discussed the first weakness listed above. Let’s move onto the second.

The OFCCP Relies on Voluntary Compliance with Requirements:

This particular weakness would seem to be so self-explanatory, that we might even ask, “Why would the OFCCP use this as a primary strategy if it hopes to be effective?” The answer, simply put, is that the OFCCP, even the more beefed up version we have seen in recent years, cannot possibly conduct Compliance Evaluations for all contractors. (According to the Government Accountability Office report there are “tens of thousands” of contractors under the OFCCP’s jurisdiction.) That said, reliance on voluntary compliance simply cannot ensure that contractors are complying with even basic requirements, such as writing and implementing an AAP, let alone analysis, record keeping and many other more complex regulatory requirements. Note: Failure to have a written AAP was one of the top violations since 2008.

The implication here is fairly obvious: If the OFCCP is relying on voluntary compliance it has little or no actual enforcement mechanisms in place to ensure compliance. For example, when the OFCCP selects a contractor for a Compliance Evaluation, it sends a Corporate Scheduling Announcement Letter, or CSAL (essentially a heads up) that it will be scheduling a Compliance Evaluation. In the Scheduling Letter, the OFCCP requests the contractor to submit data, including a copy of the AAP, within 30 days. By the OFCCP’s own admission, however, approximately 85 percent of contractors who received scheduling letters in 2015 did not submit an AAP within the aforementioned 30 days. Many requested extensions. While contractors are required in their contracts to develop an AAP within 120 days of the contract commencement, and update the AAP annually, they often do not. What is more, the OFCCP has no process for ensuring compliance with even this requirement, and therefore lacks a reliable indicator of whether its own objectives are being met, and, consequently, whether its own efforts in doing so are effective.

This weakness appears so glaring, so obvious that one wonders why it should have taken a lengthy investigation or audit by the Government Accountability Office (GAO) to uncover it.

The GAO’s recommendation to the Secretary of Labor: “Develop a mechanism to monitor AAPs from covered federal contractors on a regular basis. Such a mechanism could include electronically collecting AAPs and contractor certification of annual updates” therefore should come as no surprise.

 

Let’s move onto the third weakness identified by the GAO:

OFCCP’s Compliance Evaluation Assignment Process May Result in Geographic Imbalances

When the OFCCP distributes its scheduling lists, or assigns Compliance Evaluations to District or Area offices, it does so primarily based on the physical address of the contractor establishments. In other words, the contractor’s physical address determines which district or area office will be assigned the Compliance Evaluation. The reason: to minimize travel costs if an on-site visit becomes necessary. According to the GAO this distribution method is outdated, given the steady decline in the number of evaluations actually requiring on-site visits. Specifically the OFCCP admitted that in 2015, only 25% of Compliance Evaluations required onsite visits. The OFCCP has also acknowledged that its current distribution of compliance officers among the 48 district and area offices did not correspond to the national distribution of federal contractors. According to the OFCCP this uneven distribution is due in part to attrition levels across offices. These disparities impact how many officers are actually available in the different district and area offices to conduct compliance evaluations, increasing the likelihood of unevenness and inconsistencies and lack of continuity. Clearly, such disjointed efforts will impact the agency’s effectiveness.

The GAO therefore recommended that to address this particular weakness, the Secretary of Labor “Make changes to the current scheduling list distribution process so that it addresses changes in human capital and does not rely exclusively on geographic location”.

In light of these identified weaknesses, and the GAO’s recommendations to the Secretary of Labor, what can – and should—federal contractors do? The short answer: Expect some changes aimed at tightening up the OFCCP’s enforcement processes and mechanisms. Yes, we know that with a new President taking office soon – one with a very different political agenda than Mr. Obama, that the OFCCP may develop a new and different look. The changes recommended by the GAO however, do not necessarily require more revenue, however. Even if the OFCCP’s presence does not appear to loom as large in the near future, the agency itself, will not be going away, and it will still be charged with enforcing Affirmative Action laws and regulations. Reviewing and ensuring your own compliance can only help you.

In our next installment we will cover the last two weaknesses identified by the GAO, and, of course, we will provide more recommendations to you, our readers.

For more information, contact Ahmed Younies at 800-708-3655, x703 or ayounies@hrunlimitedinc.com.

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How Effective is the OFCCP? The GAO Answers – Part II

The OFCCP selection process: an area for improvement

What exactly are the weaknesses in the selection process? According to the GAO, “OFCCP’s contractor selection process is nonrandom and does not produce a generalizable sample of contractors for evaluation”. The result, according to the GAO: OFCCP cannot draw conclusions about noncompliance risk in the overall federal contractor population, based on the sample provided by the number of Compliance Evaluations it conducts.

While the OFCCP uses neutral factors in its selection process, such as alphabetical order, employee count, contract value and contract expiration date, it is not able to identify which of these factors, if any, are associated with noncompliance risk due to use of nonrandom selection of contractors for review. The OFCCP therefore cannot state with any degree of certainty the extent of noncompliance by federal contractors, and does not really even know if it is focusing its efforts on those contractors at greatest risk of noncompliance. Even if the ACE method is itself inherently effective, it will not matter, if it is not targeting at those most at risk of non-compliance.

While OFCCP has tried developing a model for identifying factors associated with noncompliance, when put into practice that model did not prove to be useful. Why? According to OFCCP officials “the model was developed with a nonrandom set of contractor establishments selected from prior OFCCP compliance reviews”.  OFCCP is reportedly working on developing a new model.  It should come as no surprise, then, that the GAO’s first recommendation is as follows:

Make changes to the contractor scheduling list development process so that compliance efforts focus on those contractors with the greatest risk of not following equal employment opportunity and affirmative action requirements.

In plain English, the GAO seems to be saying, that the factors the OFCCP uses in selecting contractors for compliance evaluation are faulty, so therefore OFCCP should revise those factors. Since the report apparently offers no insight into how the OFCCP could or should do that, the recommendation, in and of itself, does not appear to be of much help.  Hopefully, some additional guidance will follow.

In light of this finding, here are some proactive steps that federal contractors should take, sooner rather than later:

1. If you do not have an AAP, make sure to develop and implement one immediately. Not having an AAP is a surefire way to be found in violation of EEO/AA requirements if you are selected for a Compliance Evaluation;
2. Review your hiring, promotion, termination and compensation practices. Look for statistical disparities;
3. If you do find disparities, either take steps to address them or, if there are valid reasons for such disparities, document those reasons;
4. Document any steps you take to address any disparities;
5. Make sure you are compliant with all recordkeeping requirements;
6. Investigate any allegations of discrimination, document your findings, your responses and reasons for all actions taken or not taken in response.

Clearly this list is not exhaustive, but it should be enough to get you started. Next week, we will continue this discussion with the GAO’s second finding, its recommendations to the OFCCP and our recommendations to you, our readers.

For more information, contact Ahmed Younies at 800-708-3655, x703 or ayounies@hrunlimited.com.

 

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How Effective is the OFCCP? The GAO Answers – Part I

The OFCCP often projects a larger than life presence in the consciousness of many federal contractors. How can it not? For FY 2016, the OFCCP had an annual operating budget of just over $105 million and was authorized 615 full-time equivalent staff positions.  While its staffing decreased from 755 authorized FTE positions in FY 2015 (an almost 19-percent decrease) its budget increased by about a half a million dollars. With its impressive budget and significant FTE authorization, with so many big-payout settlements of discrimination cases, with so many new regulations and data collection requirements, with seemingly so much stepped-up enforcement activities, it must really be making great strides in eradicating discriminatory hiring and employment practices by federal contractors. Not so, according to the General Accounting Office (GAO). The House of Representatives Committee on Education and the Workforce, and its Subcommittee on Workforce Protections requested the GAO to review the OFCCP’s performance. To say the least, those reviews were less than stellar. Since we assume this topic to be of great interest to our readers, we will devote the next few weeks to a series on the GAO’s findings, its recommendations, and, of course, we will also include our own recommended Best Practices. First, however, let’s get some background.

You may be aware that whereas the OFCCP’s activities aimed at ensuring non-discrimination have included outreach and compliance assistance (with AA laws and regulations) it chose to refocus its efforts on enforcement as of 2011. So, in Dr. Phil language, “How’s that working out” for them? Not well, according to the GAO. In order to detect violations, the OFCCP relies heavily upon Compliance Evaluations (aka “audits”). According to the GAO, the OFCCP conducts compliance evaluations on about 2 percent of all federal contractors, annually. Since 2010 about 78 percent of all evaluations found no violations, and about 2 percent indicated discriminatory practices.  Wouldn’t that just mean that contractors are doing a great job of complying with affirmative action laws and regulations? Not if the OFCCP’s means and methods are flawed – which, they are, according to the GAO.  More on that in a moment.

The OFCCP’s two approaches to ensure compliance with federal EEO and Affirmative Action requirements are enforcement and compliance assistance. We have already established however, that the bulk of the OFCCP’s emphasis since 2011 has been on enforcement, primarily by conducting Compliance Evaluations, which it in turn carries out primarily by using compliance officers to evaluate contractors. The OFCCP selects which contractors to review and then reviews those contractors’ hiring, promotion, compensation, termination and other employment practices, including recordkeeping. The evaluation may occur at the contractor’s facility which produces the goods or services. The facility can be a factory, office or store.

How does the OFCCP determine who it selects for review? In general it uses federal and commercial databases, along with “other factors”. Regional and district office staffing levels establish the basis for determining total number of contractors reviewed each year within the jurisdiction of the particular regional office. Moreover, based on the location of the establishment(s) to be reviewed, the local district office receives the scheduling list of contractors located in its jurisdiction. From there, several facially neutral factors, such as alphabetical order, employee count, contract value, contract expiration date, among other factors, determine further allocation or sorting. Many of you are aware of this process. We include it here, because the GAO raises concern about the selection process, which we will discuss momentarily.

One more general point about the OFCCP’s enforcement efforts: whereas through 2010 the OFCCP’s Compliance Evaluation process had been known as Active Case Management (ACM) the OFCCP changed its process to one of Active Case Enforcement (ACE). Why and what’s the difference? Perhaps we can best find that answer in the OFCCP’s own directive outlining ACE procedures. According to the OFCCP, ACM proved to be of “limited utility” because it could not effectively use all of its investigating tools, such as offsite review of records. The OFCCP therefore implemented the ACE process, which requires more comprehensive evaluations of each selective contractor. Presumably, the ACE model allows for a more proactive, if not aggressive approach. The ACE process includes, without limitation, ascertaining the presence of indicators of discrimination or violations that warrant an onsite investigation. Indicators might include patterns of individual and/or systemic discrimination, patterns of major technical violations such as recordkeeping deficiencies and failure to maintain an AAP, in addition to statistical and anecdotal evidence of discrimination. (Item: In 2015, close to 85% of evaluated contractors did not submit their AAP within 30 days of the OFCCP’s request and, in some cases, received extensions).

The GAO concluded that significant weaknesses in the OFCCP’s enforcement efforts render the OFCCP unable to truly assess the extent of federal contractor compliance. With the budget and staff devoted to objectives that the Obama Administration has identified as a high priority, how can that be? What are those weaknesses? The GAO, in its report identifies five key weaknesses. We will list them here:

1. Weakness in OFCCP’s process for selecting contractors for Compliance Evaluations makes it challenging to know the extent to which Equal Opportunity Requirements are followed;

2. OFCCP Relies on Voluntary Compliance with Requirements;

3. OFCCP’s Compliance Evaluation Assignment Process May Result in Geographic Imbalances;

4. Reported Inconsistencies in Compliance Evaluations May Be Exacerbated by Lack of Training;

5. Most Violations Are Resolved Through Conciliation

We’ll start with the analysis of the first deficiency, weaknesses in the selection process, and, over the next few weeks, address the others.

For more information, contact Ahmed Younies at 714-426-2918, x1 or ayounies@hrunlimitedinc.com.

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What the EEOC and OFCCP Want You to Know About Criminal Background Checks

What’s up with the EEOC, the OFCCP and criminal background checks? While the EEOC enforces anti-discrimination laws for private employers, and generally those who employ 15 or more employees, the OFCCP enforces affirmative action laws and regulations to which federal contractors are subject. Administering background checks to all applicants can’t be discriminatory, can it? If not, then why would employers even have to worry about the EEOC or the OFCCP when conducting background checks?

Let’s answer that question and some others:

Are former convicts a protected class under anti-discrimination laws?  No. Certain practices, although themselves neutral, may, by “hurting” a disproportionate number of   people protected under federal anti-discrimination laws, have a discriminatory impact. Those practices too would then be in violation of federal anti-discrimination laws.  The EEOC, citing studies show that African-Americans  and Hispanics have significantly more arrests and convictions,  takes the position that blanket exclusions of all applicants with criminal histories therefore has a discriminatory impact on African-Americans and Hispanics. The OFCCP has specifically stated that it follows the EEOC’s practices, and in Directive 306, explicitly adopted the EEOC position and practices with respect to use of arrest and conviction records in making hiring decisions.

Why do the EEOC and OFCCP get involved in this practice? Many employers are surprised to hear that the EEOC has issued position statements since at least 1987 on this very issue. Based on this position, it began investigating complaints relating to use of background checks when hiring, and filing lawsuits long before issuing its latest Enforcement Guidance last April. Again, the OFCCP has long followed EEOC practices with respect to this and many other anti-discrimination laws and measures.

Does this mean that employers can no longer conduct criminal background checks? No!  Employers can, and, in order to avoid harmful situations and negligent hiring suits, should, still conduct background checks. The EEOC’s Enforcement Guidance attempts to provide employers with some additional guidelines as to how and when to use the information contained in criminal background checks in making their hiring decisions. Prior to issuing its Enforcement Guidance, the EEOC provided more basic guidelines (which the Enforcement Guidance has incorporated) by telling employers to consider the following factors with respect to applicants and their criminal backgrounds:

1. The nature and gravity of the offense;
2. Time elapsed since the conviction and/or completion of sentence;
3. Nature of the job held or sought.

The EEOC, and federal court cases (the US Supreme Court has never decided this issue) also have held that a business necessity will justify exclusion of an applicant based on his or her criminal record. Simply put, if one’s criminal past is not relevant to the essential functions of a particular job or some other compelling business necessity, the employer should not exclude the applicant on that basis. For example, if Betty applies for a job as a bookkeeper and was convicted two years ago for embezzlement, that is relevant to the job. Rejecting her is justified even under the EEOC’s analysis and guidelines.  An employer might reject a man with a history of sexually assaulting women  for a job that would put him in proximity with a female employee late at night when no one else is around and be acting consistent with a business necessity. On the other hand, if Danny pleaded guilty to public drunkenness one time 7 years ago that may not be a justifiable basis for refusing him a job as an administrative assistant.

Since the OFCCP is all but in lock-step with the EEOC on this issue, federal contractors would do well to familiarize themselves with the EEOC’s Enforcement Guidance.

What then, does the EEOC’s Enforcement Guidance really change?  Given that the EEOC’s position and practices have been essentially the same for over 25 years, perhaps not much at all.  The Guidance over 46 pages long, mostly cites background, studies and reasoning for its position. The part of most practical interest to employers, the list of Employer Best Practices, is at the end of the Enforcement Guidance, and is as follows:

General:

• Eliminate policies or practices that exclude people from employment based on any criminal record. Employers cannot have blanket exclusions of those with criminal pasts. (So this is a blanket exclusion of blanket exclusions?? Maybe.)
• Train managers, hiring officials and decision makers about Title VII and its prohibition on employment discrimination. Title VII of the Civil Rights Act of 1964 is the law that prohibits employment discrimination against certain classes of people identified therein (i.e. “protected classes”). The EEOC wants employers to sensitize its managers to these laws, and how otherwise neutral practices can have a discriminatory impact on the people who Title VII is designed to protect. Ideally, training managers about Title VII and related laws should not be new.

Developing a Policy:

• Develop a narrowly tailored written policy and procedure for screening applicants and employees for criminal conduct (that does the following: )
  • Identify essential job requirements and the actual circumstances under which the jobs are performed.
  • Determine the specific offenses that may demonstrate unfitness for performing such jobs
  • Identify the criminal offenses based on all available evidence.
  • Determine the duration of exclusions for criminal conduct based on all available evidence.
  • Include an individualized assessment.
  • Record the justification for the policy and procedures.
  • Note and keep a record of consultations and research considered in crafting the policy and procedures.
• Train managers, hiring officials and decision makers on how to implement the policy and procedures consistent with Title VII.

In short, the EEOC and OFCCP want employers to implement policies that consider the relationship of the criminal offense(s) to the essential job requirements, especially if they are “old”, possible rehabilitation by the candidate, and whenever possible, to evaluate on a case by case basis. If an employer rejects an applicant based on criminal history, it should record the decision and the justification and, once it has created a policy and procedures, train those it expects to be implementing them. (NOTE: According to the EEOC, arrests alone are not themselves evidence of criminal conduct, though the underlying conduct leading to the arrest, if related to job functions or business necessity can be considered.)

Questions:

• When asking questions about criminal records, limit inquiries to records for which exclusion would be job-related for the position in question and consistent with business necessity.

Employers should, whenever possible, only ask about items related to the actual job or a specific business necessity. If the report refers to something that is not related to the job, the employer should not ask about it.

Confidentiality:

• Keep information about applicants’ and employees’ criminal records confidential. Only use if for the purpose for which it is intended.

This one seems self-explanatory.

Well, let’s stop here for now, and if you want to learn more about use of criminal background checks in the hiring process, make sure to attend our webinar on Thursday, November 10 at 10:30 a.m. PST, 1:30 p.m. EST.

For more information, contact Ahmed Younies at 800-708-3655, x703.

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Federal Law Alert: Annual EEO-1 Reports

Pay Data Will Now Be Required on EEO-1 Reports for Employers with 100 or More Employees

The Equal Employment Opportunity Commission (EEOC) has announced that it will require employers with 100 or more employees to submit summary pay data and total hours worked for the year as part of the annual EEO-1 report.

The first report, capturing data from 2017, will be due March 31, 2018. In subsequent years, March 31 will become the new annual deadline for EEO-1 reports—a change from September 30. As a result of pushing the reporting date from September to March, no reporting will be due in 2017.

On the new form, federal contractors and subcontractors with 50-99 employees will not report summary pay data or hours, but they will continue to report employees by job category as well as by sex and ethnicity or race.

Continuing with current practice, employers with 99 or fewer employees and Federal contractors and subcontractors with 49 or fewer employees will not be required to complete the EEO-1 report.

EEO-1 reporting of sex and ethnicity or race is based on counts taken during the “workforce snapshot period.” For reporting years 2016 and earlier, the “workforce snapshot period” was July 1 to September 30. Starting with the EEO-1 report of 2017 data, however, the “workforce snapshot period” will be October 1 to December 31. An employer may choose any pay period during this three-month “workforce snapshot period” to count its full and part-time employees for the EEO-1 report.

According to the EEOC, the new requirement is intended to help decrease pay disparities based on gender and race or ethnicity. The EEOC will use the collected data to help it investigate and identify unlawful pay discrimination. It will therefore be important for employers to ensure that they have systems in place to collect the required data and correct any pay disparities that cannot be explained by legitimate business factors.

For more information, contact Ahmed Younies at (800) 708-3655, x703, or ayounies@hrunlimitedinc.com.

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An Overview of the Fair and Safe Workplaces Final Rules

Back in July, 2014, President Obama signed Executive Order 13673, also known as the Fair and Safe Workplaces Executive Order. It is a comprehensive Order aimed at ensuring federal contractors’ compliance with fourteen—yes fourteen–federal labor laws, along with their state counterparts. Now, two years later, the Federal Acquisition Regulatory (FAR) Council and the United States Department of Labor have published final rules implementing the EO 13673. The stated objective of the Executive Order and the implementing rules is to ensure that federal government agencies contract with “responsible” contractors. In other words, contractors subject to the Executive Order can face serious consequences, including loss of federal government contracts if they do not comply with the fourteen labor laws. (See below).  The new rules are quite comprehensive. While we cannot possibly explore all of them here, we can at least get an overview. Let’s start with 4 of the 5 W’s (who, what, when and how):

Who is affected by the new rules? Federal contractors (and sub-contractors) with contracts valued in excess of $500,000.

What are the new rules? In a nutshell, the new rules, you must self-report any violations with the following fourteen federal labor laws and their state counterparts:

1. Fair Labor Standards Act
2. Occupational Safety and Health Act (and state law equivalents)
3. Migrant and Seasonal Agricultural Worker Protection Act
4. National Labor Relations Act
5. Family and Medical Leave Act
6. Davis-Bacon Act
7. Service Contract Act
8. Title VII of the Civil Rights Act
9. Americans with Disabilities Act
10. Age Discrimination in Employment Act
11. Executive Order 11246 (affirmative action and equal employment opportunity)
12. Vietnam Era Veterans’ Readjustment Assistance Act
13. Section 503 of the Rehabilitation Act
14. Executive Order 13658 (federal contractor minimum wage)

When do the new rules take effect?  Agencies can use the DOL guidance immediately. The DOL guidance is supposed to assist agencies in complying with the Executive Order.  The FAR Council’s rules are phased in over a two-year period, beginning October 25, 2016. Here are some of the key facets:

• Starting September 12, 2016 you may request from the DOL a voluntary assessment of your labor compliance history. While the request would implicitly be in anticipation of bids on future contracts, it would not be tied to any specific bids or contracts. This type of voluntary assessment, also known as a pre-assessment, would be seen as a mitigating factor with respect to future acquisitions. This option is available to you as of September 12, 2016, on an ongoing basis. In other words, you can always do a voluntary pre-assessment independent of any specific bid/acquisition.
• As of October 25, 2016, federal prime contractors with contracts valued at or above $50 million must disclose any violations of the above-cited 14 federal labor laws in the previous year. Contractors and sub-contractors with federal contractors of $1 million or more may not require employees to arbitrate sexual assault, harassment or Title VII, though the parties may agree to binding arbitration after the dispute arises. In other words, covered contractors will no longer be able to require employees to sign an arbitration agreement as a condition of employment.
• As of January 1, 2017 all federal contractors and sub-contractors must start providing their employees wage statements.
• As of April 24, 2017 all federal contractors must disclose violations in the previous year of the 14 above-cited labor laws in when seeking contracts valued at $500,000 or more, and sub-contractors must begin doing so as of October 25, 2017; all federal contractors and sub-contractors must begin doing so as of October 25, 2018.

How will the new rules be implemented? In a nutshell, contracting officers are supposed to consider your compliance record in the previous year before awarding bids on contracts for $500,000 or more.   If your company is a subsidiary, parent or affiliate Company, the contracting officer under FAR Council rules evaluates the compliance history of the entity whose name is on the bid. What else can you expect? First and foremost, just because you have a finding of a compliance violation doesn’t mean that your company will be rendered “non-responsible”. In other words, that alone will not automatically cause you to lose the contract.  Information you provide about mitigating factors is considered –and is kept confidential, unless you, the contractor decide you want that information disclosed. Each contractor under EO 13673 designate an Agency Labor Compliance Advisor (ALCA), who assists your contract officer in evaluating the information. The ALCA must provide a written analysis of the compliance issues/history, and the contracting officer must include in the contract file how it weighed the analysis in arriving at the “non-responsibility” determination, if any. Even successful bidders are not entirely off the hook, however. If you secure a federal contract of $500,000 or more, you will still have to provide updates as to your labor law compliance twice each year during the contract term.

Note that most of the requirements discussed will only apply to those with federal contracts of at least $500,000. What if your contracts are valued at less than $500,000? Don’t get excited. You’re not entirely off the hook either. You still have to provide wage statements to your employees, starting January 1, 2017. What information must those statements include? The statements must show hours worked, overtime hours worked, pay rate and total pay for the pay period, and any additions to or deductions from pay. If a significant portion of your workforce’s primary language is other than English, the statements must be printed in that language. Exempt employees’ statements if they indicate the employee’s exempt status need not indicate the hours worked.  What if your workforce consists solely or primarily of independent contractors? You still have to provide a statement. In this case the statement would indicate their independent contractor status. (Remember also, that if you have any contracts valued at $1 million or more, the aforementioned limitations on arbitration apply to you as well.)

Is that everything? Frankly no. There is much more, but there is simply not enough time – or room—to cover it in one post.  We may, as we often do, follow up as appropriate with additional information.

For more information, contact Ahmed Younies at (714) 426-2918, x. 1, or ayounies@hrunlimitedinc.com.

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Anti-Discrimination Rules with a Twist: The OFCCP’s Final Rules on Sex Discrimination (Part I of II)

The OFCCP’s Final Rule on Sex Discrimination took effect this week, on August 15, 2016. Many of you already know that sex discrimination has been illegal since at least 1964, when the Civil Rights Act was enacted. Pay Discrimination based on sex has been illegal since at least 1963. Most employers know they cannot base employment decisions and practices on sex. Yet the OFCCP has issued new rules on sex discrimination – why? The OFCCP says its previous guidelines and regulations were “outdated”.

The goals of this Final Rule:

“[H]armonizing OFCCP’s outdated regulations with current Title VII jurisprudence” and facilitating “contractor understanding and compliance, potentially reduc[ing] contractor costs, and increase labor-market efficiency changes”.

Let’s have a look those new rules, then, shall we?

Here is what the Final Rule provides:

• Accommodations to workers with conditions related to pregnancy/childbirth:

Required accommodations include without limitation extra bathroom breaks, light-duty assignments, in those situations where contractors provide similar accommodations to similarly-situated non-pregnant workers (e.g. individuals with disabilities).

• Fair Pay Practices:

Most of you know that employers can’t pay workers differently based on sex. What you may not know is what practices could actually constitute pay discrimination. Here are some: denying opportunities for overtime, training, higher-paying jobs, based on a worker’s sex, or based on assumptions about a worker because of their sex or gender stereotypes (not conforming to particular gender norms and expectations about their appearance, attire, or behavior). The new rules state these and other points clearly, whereas the old rules did not.  Under this Rule, workers can recover lost wages whenever an employer pays wages resulting from discrimination, and not just when the underlying decision is/was made.

• Equal benefits from fringe-benefit plans, to male and female employees:

Fringe benefits include without limitation medical, hospital, accident, life insurance and retirement benefits as well as profit-sharing and bonus plans, leave and other terms and conditions of employment.

• Forbids sexual harassment:

Expand the scope of harassment training to include pregnancy/sex-stereotyping/child rearing/sexual orientation and/or transgender modules. As we know, sexual harassment includes without limitation unwelcome sexual advances, requests for sexual favors, offensive remarks about a person’s sex, other verbal or physical conduct of a sexual nature when the conduct interferes with the person’s work performance, forms the basis for employment decisions or otherwise creates a hostile working environment.

• Equal access to jobs and workforce development opportunities for men and women:

Contractors cannot establish different requirements based on sex unless it can show that such requirements are a bona fide occupational qualification (this is a very high standard, and therefore a very narrow exception). Different job requirements based on sex must be job-related and consistent with business necessity.

• Protection for workers with caregiving responsibilities:

This provision addresses the common practice of basing treatment on stereotypical assumptions that women are more likely to have caregiving responsibilities and then denying employment opportunities on that basis. It reinforces the prohibition against denying opportunities to any employee based on his or her sex. Conversely, if a father requests flexible arrangements for caregiving, it must afford those accommodations if it makes similar accommodations for working mothers.

• Protections for transgender workers:

This does one thing that Title VII does not: it clearly states that sex discrimination includes discrimination based on gender identity. It also requires that workers be allowed to use bathrooms, changing rooms, showers and similar facilities consistent with their gender identity. It also explicitly states that contractors cannot exclude coverage for care related to gender dysphoria or gender transition.

• Protection against discrimination based on sex stereotypes:

Contractors cannot discriminate in any way against employees or applicants who fail to comply with gender stereotypes about how men and women act or the types of jobs they “should” do.

• Protections for religiously affiliated contractors under the Religious Freedom Restoration Act (RFRA):

The RFRA allows religiously affiliated contractors, such as religious corporations, educational institutions or societies to favor people of a particular religion when making employment decisions, and follows Supreme Court precedent, which recognizes the First Amendment’s requirement of a “ministerial exception” from employment discrimination laws. The ministerial exception prohibits the government from interfering with the religious organization making employment decisions about its so-called ministers (this alone could probably be a separate topic).

As you can see, this Rule is fairly comprehensive. It not only takes Title VII and its amendments, and cases interpreting those laws and incorporates them into one Final Rule, it goes even further. How so?

Title VII itself, along with its amendments, and along with most cases interpreting them, is silent on the issues of gender identity and to some extent, on gender stereotypes.

We see here another example of President Obama using the OFCCP to advance those parts of his agenda that he has not been able to push through Congress and make all his employers subject to it.

If you are a federal contractor, what has changed for you? Theoretically nothing. Practically speaking, the changes may be significant. This Final Rule gives the OFCCP a specific tool to use to go after contractors who continue to engage in sex discrimination. It also makes it harder for you as a federal contractor to claim you  “didn’t know” that certain behaviors constitute sex discrimination, and puts more greater onus on you to ensure equal employment opportunities for men and women. Finally, you cannot argue that the protections don’t apply to transgender employees, the way non-contractor employers might with regard to Title VII.

Suppose you are not a federal contractor. Don’t get complacent! The issue of protection to transgender employees will probably reach the US Supreme Court in the not-too-distant future. Moreover, the fact that the EEOC and the OFCCP and the President (at least until the end of 2016) are on the same page on this and other sex-related issues does create some pressure to  keep the tide moving in that direction. Therefore, non-contractor employees would do well to get ahead of the issue by reviewing the Final Rule and acting accordingly.  Are there specific steps you can take? Stay tuned, as we reserve the right to cover that in an upcoming post!

For more information, contact Ahmed Younies at (714) 426-2918, ext. 1, or ayounies@hrunlimitedinc.com.

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What You Need to Know About the New Pay Reporting Requirements

Fifty years ago – give or take—the United States set out to eradicate discrimination. As a nation, we’ve made great strides in ensuring equal opportunity for all, without regard to race, religion, national origin, sex, disability, as well as sexual orientation and gender identity. We now see greater workplace diversity, and equal employment opportunity, which seemed all but nonexistent 50 years ago. That is not to say, however that we do not still have a long way to go.  In particular, our President, and by extension, the EEOC and OFCCP have targeted pay equity as one area in need of improvement. “More than 50 years after it became illegal, it [pay discrimination] remains a persistent problem for many Americans”, says EEOC Chair Jenny R. Yang. While it’s all well and good to identify a problem, what, if anything do the EEOC and OFCCP propose to do about it?  The short answer:  a joint effort to collect pay data. The reason, according to Ms. Yang: “This information will assist employers in evaluating their pay practices to prevent pay discrimination and strengthen enforcement of our federal anti-discrimination laws.”

How will the two agencies go about collecting the data—and from where exactly will they get it?  Recently they announced their not-so-secret weapon: the EEO-1. For those of you who already file EEO-1’s, you may be wondering, “How will the EEO-1 help, when there is nowhere on the form to report such information?” You need not fear! Forms were made to be updated and this one is no exception. The EEO-1 will be updated to include fields or sections for providing this information. If you are required to file these forms you can see this as a good-news/bad news scenario. The “bad” news is that you may now have to report even more information to the EEOC/OFCCP, which in turn usually means more record keeping. The “good” news is that: a) the additional information simply gets added to an additional form with which you are already familiar, i.e. you don’t have to fill out and learn a separate form; and b) if you aren’t required now to file an EEO-1 you won’t be by reason of this new requirement; and c) not everyone who must file an EEO-1 will have to provide pay data, and you may be one of those who does not have to do so.

In and of itself, the pay reporting requirements are nothing new. The EEOC had already advanced this proposal, with an initial public comment period of February 1 through April 1, 2016. The EEOC received over 300 public comments in response, held a public meeting at EEOC headquarters on March 16, 2016 and listened to testimony and collected information from studies and academic literature on compensation, discrimination and collecting pay data. In response, the EEOC adopted certain suggestions, made some revisions and has published its revised proposal to change the EEO-1 and pay reporting requirements, and has provided a thirty-day public comment period.  Interested parties have until August 15 to comment. Let’s take a look at the key changes, whether you are impacted by them, and if so, what they mean for you.

First, who will now have to report pay data? Bottom line: only federal contractors with 100 or more employees have to file the EEO-1 and provide the pay information. As you can see, while this new requirement only applies to federal contractors, it does not apply to all contractors. Therefore: private employers with fewer than 100 employees do and will not to file an EEO-1 or report pay data. Federal contractors with 50-99 employees will still have to file the EEO-1, but will not have to report pay data. Federal contractors with 1-49 employees do not file the EEO-1 or report pay data.

Next, assuming you are required to file the “new and improved” EEO-1, what information must you provide?  In a nutshell, you must provide W-2 income data and hours worked data. You will report the number of employees within certain “pay bands” (more on that in just a moment) using W-2 Box 1 income data. In addition to wages and salary, this information will include commissions, tips, bonuses, overtime and other supplemental pay. How will you report “hours worked”? For non-exempt employees you will report their hours worked as you would under the FLSA. What about those of your employees exempt from the FLSA’s minimum wage and overtime requirements? You have two choices. You may either:

1. Report 40 hours a week for full-time exempt employees, and 20 hours a week for exempt part-time employees, multiplied by the number of weeks they were employed during the EEO-1 reporting year; or
2. Provide actual hours worked by the exempt employees during the EEO-1 reporting year, if you already maintain accurate hours of those records.

What about the pay bands? Pay bands are essentially pay ranges. You use the following 12 (used by the Bureau of Labor Statistics) for each category:

1. Up to $19,239;
2. $19,240-$24,439;
3. $24,440-$30,679;
4. $30,680-$38,999;
5. $39,000-$49,919;
6. $49,920-$62,919;
7. $62,920-$80,079;
8. $80,080-$101,919;
9. $101,920-$128,959;
10. $128,960-$163,799;
11. $163,800-$207,999;
12.  $208,000 and over.

You then tally the number of employees in the above pay bands for each EEO-1 job category, For each pay band, you enter the number of employees whose W-2 pay for the calendar year falls in that band. As you can see, you are reporting summary data, not individual pay or salaries.

So, when must you report pay data? The good news: EEO-1 reporting remains the same for 2016. In other words, no changes for this year. The changes begin in 2017. Your filing deadline moves from September 30 to March 31. Your first filing deadline is March 31, 2017. In other words, you do your usual 2016 filing on September 30, 2016 – and then you have a year and a half to gear up for the new requirements. From 2017 forward the filing date is March 31.

Finally, what, if anything, do these changes mean for federal contractors? In some respects, the answer may be, “Not much at all”.  You may be required to have an AAP, because you have over 50 employers and your contracts with federal agencies may be valued at over $50,000 a year, but you may still be too small to be subject to the anticipated new requirements. Alternatively, you may be subject to the new requirements, which, for reporting purposes, simply means you have to include more information on your EEO-1’s. If you take affirmative action compliance seriously, this is information you should already have readily accessible, and that you should be evaluating regularly to make sure that you do not have pay disparities. The new requirements are not a change in position on the part of the EEOC or the OFCCP. The main significance is that the EEOC and OFCCP are signaling that they are now focused specifically on compensation—which means you need to be, too. In other words, this is an excellent time to review your compensation practices, check for, correct and/or document valid reasons for any discrepancies. Does that sound overwhelming? It need not be. Contact your friendly affirmative action consultant for help!

For more information, contact Ahmed Younies, at (714) 426-2918, ext. 1, or ayounies@hrunlimitedinc.com.

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You Didn’t Discriminate in Your Hiring? Prove It!

Last week, the OFCCP reached a settlement of hiring discrimination charges with Jennie-O Turkey Stores. Jennie-O Turkey is the second-largest turkey processor in the country and holds a $360 million contract with the U.S. Department of Agriculture, which in turn supplies food to schools and food banks. The OFCCP alleged that Jennie-O Turkey Stores’ selection practices discriminated against qualified female applicants for laborer positions between February 2009 and February 2010. Applicants did not undergo any pre-employment testing as part of the selection procedures. The OFCCP found that Jennie-O disproportionately granted interviews to men over women applicants during one phase of the hiring process.

In addition to its proactive cooperation with the OFCCP to settle the matter, Jennie-O agreed to offer laborer positions to 53 qualified female applicants and to pay $491,861 in back wages to 339 applicants denied entry-level jobs at its turkey-processing facility, located in Wilmar, Minnesota. Jennie-O also agreed to train its hiring personnel to prevent any such discriminatory hiring practices going forward. As with many such settlements, Jennie-O did not admit liability and it made a statement that it disagrees with the OFCCP’s findings and is committed to promoting and maintaining a discrimination-free workplace, and that the settlement was “a way to avoid costly litigation and move forward with our business”.

How did the parties arrive at the numbers it did? The figures are based on OFCCP estimates. The OFCCP argued that if there were no discrimination involved, the selection rate would be 35% women. That rate would have yielded 53 women. As for the back pay amounts, are based on what the female applicants would have earned if hired by Jennie-O minus what they would likely have earned working elsewhere, leading to a minimum payout of $1450 a person. The OFCCP will send notices to women who applied for the laborer positions between February 2009 and February 2010 and Jennie-O will offer positions within that group of previously rejected female candidates.

We have written before about large settlements with large federal contractors and have made recommendations to our readers as to how to avoid ending up in those same situations. Those recommendations have included training, reviewing policies and procedures, beefing up outreach and recruitment. Those recommendations are still sound and we stand by them. These recommendations, however assume that the contractor did in fact discriminate or at the very least failed to take appropriate steps to ensure that it didn’t do anything discriminatory.

What if the contractor didn’t actually discriminate though? What if the contractor in fact made all the efforts it should have made to ensure appropriate representation of all protected classes under Affirmative Action laws? What if discrepancies are caused by factors not attributable to any action or omission on the contractor’s part? If that were so, how would the OFCCP be achieving these types of settlements? Perhaps, some of these cases are indicative of something else…

If the contractor didn’t actually discriminate or fail to take steps to avoid discriminating, and if the contractor in fact took all the steps it should have in its outreach and recruiting efforts, where could it have gone wrong? If you are asking that question and you don’t know the answer, then you, like these other contractors have one major, though often overlooked area that you will want to re-visit immediately: recordkeeping.

You may well know that OFCCP regulations already require, sometimes implicitly, sometimes explicitly that you create and maintain records related to your Affirmative Action Program. If you are lax with your recordkeeping, you may already be in violation of those regulations, but that is not really our focus right now. You can review the regulations about recordkeeping in order to know which records are required by regulation. You can also review the current scheduling letter that the OFCCP sends to contractors prior to the commencement of a Compliance Evaluation and see what documents you should create and maintain in preparation for such an eventuality. Putting aside these requirements, you still need to create and maintain records or you can find yourself in the same position in which Jennie-O and a number of other similarly situated contractors find themselves.

Let’s assume for the moment that Jennie-O did everything it should have done to recruit and hire qualified female applicants. Let’s assume it offered laborer positions to the appropriate percentage of qualified female applicants. What if those applicants turned down the job offers or what if they tried finding the right percentage of qualified female applicants, and their recruiting and outreach efforts were everything they should have been? What if they trained their hiring personnel accordingly? What would be the problem, then? What if there is no record of any of that?

Here’s the nauseating conclusion. Even if they did everything they should have done, if they didn’t document those efforts, if they didn’t document the results and the reasons, if they didn’t document why they hired or rejected certain candidates, they have no proof. As far as the OFCCP is concerned, there is a discrepancy in hiring, and the contractor didn’t do what it was supposed to do to ensure an appropriate number of hires among qualified female candidates, and/or the contractor discriminated. Why is that? Because there is no proof that the contractor did in fact do what it was supposed to do. If you are an H.R. practitioner, you have probably heard sayings, such as “If it’s not in writing it didn’t happen”, or “If you didn’t document it you didn’t do it”. Literally that may not be true, but practically it is—because if the OFCCP comes knocking and finds a statistical disparity that you cannot explain or refute, then, you will likely be found to have discriminated – even though you didn’t really.

Yes, you should engage in appropriate outreach and recruitment efforts to attract, hire, retain and promote qualified female, minority, veteran and disabled candidates. Yes, you should train your hiring personnel in appropriate recruitment and hiring practices. Yes, you should, of course, have your Affirmative Action Plans and all required statistical analyses readily available. You should also document all the efforts you have made to recruit and hire qualified female, minority, disabled and veteran candidates. You should document who you hired, who you rejected and why. If there are other reasons why, despite doing everything you should have there are still discrepancies between what the OFCCP says your numbers should be and what they are, you’ll be able to explain it. That documentation may well be enough to save you from an audit or a lawsuit. At the very least, if you do have to make a statement to the media, it will be credible, because your documentation will support it.
For more information contact Ahmed Younies at (714) 426-2918, x 1 or ayounies@hrunlimitedinc.com.

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Remembering Jose Franco, Champion of Affirmative Action and Equal Employment Opportunity

The Equal Employment Opportunity/Affirmative Action community has suffered a terrible loss with the passing of José Franco last week-end. I offer this eulogy for not only to remember José, but also to convey the magnitude of this loss to those who did not have the privilege to know him.

José was the consummate advocate for civil rights, who worked tirelessly to eradicate workplace discrimination against women, minorities, veterans and the disabled and many of us looked to him as a mentor and role model. Jose was born in Brooklyn to a Spanish immigrant father and a coal miner’s daughter. In New York City he was considered a gifted student. That changed, and José experienced the effects of discrimination for the first time when in fifth grade he moved with his family to Arizona, where his teacher’s perception of him as Mexican and therefore less capable of learning rendered him a barely passable student. Only after a fresh start in another school, where he registered as “Joseph” did his grades once again reflect his superior abilities. Conversely, José also experienced the benefits of Affirmative Action when he was recruited by and admitted to Duke University and went on to earn his Bachelor’s Degree in Political Science in 1972. From that time on, as Jose described it, he was “baptized into the civil rights movement”.

From 1972 until 2001, José worked for the office that eventually became known as the Office of Federal Contract Compliance Programs (OFCCP), working his way up to Regional Director of Operations of the OFCCP’s San Francisco office. In his almost 30 years working for the OFCCP, Jose functioned as a training coordinator, technical expert on operating procedures and policies, conducted countless compliance reviews and investigating complaints of employment discrimination by federal contractors. Jose also became involved in enforcing the requirements of Section 503 of the Rehabilitation Act and the Vietnam Era Veterans Readjustment Assistance Act and numerous investigations of complaints of discrimination based on race, religion, national origin, sex, veteran status and disability, and several precedent-setting systemic discrimination cases.

Although José retired from the OFCCP in 2001, his work on behalf of the EEO/AA community never stopped. Jose became an EEO Consultant. In fact he was known as the EEO Doctor, working with federal contractors to design, implement and update administrator-friendly affirmative action programs, and assisting them in responding to external audits and investigations of their personnel practices.  José was elected and set to serve as a member of the American Association for Access Equity and Diversity’s (AAAED)’s nominating and elections committee for the coming 2016-2018 term. I for one will mourn the loss of the opportunity to serve with him in that capacity on the AAAED. I also know that these accomplishments, impressive as they are, do not begin to describe the extent and depth of what José gave the EEO/AA community and the unbelievable void now created by his passing. It will take many of us together to even begin to fill his shoes.

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Is it Time for a New Approach to Workplace Harassment Prevention? The EEOC Says “Yes”

The EEOC issued a multi-pronged call to action in the Final Report of its Select Task Force on the Study of Harassment in the Workplace on June 20, 2016. The Task Force acknowledged that in the thirty years since the landmark case, Meritor Savings Bank v Vinson (holding that workplace harassment is an actionable form of discrimination under Title VII of the Civil Rights Act) “we have come a far way…but sadly and too often still have far to go”. In thirty years, workplace harassment persists, and it continues, too often, to go unreported. The EEOC therefore convened a Task Force in January 2015 and set out to answer, among other questions, “[I]s there something we’ve been missing?”

So, who was on this Task Force, what exactly did it do and what did it find out? If workplace harassment remains a problem, why did the Task Force need to meet for 18 months, hold many meetings and issue a 120-page report to tell us that? Presumably many of us could have come up with the same conclusions. To be fair, the focus of the report was not merely to see what if any progress has occurred, and what if any problems remain, but rather on prevention. In Commissioners’ Feldblum and Lipnic’s own words:

As commissioners of an enforcement agency, we could have taken a cynical approach. We could have assumed that some people will always engage in harassment and that we cannot expect to control how people behave in increasingly diverse workplaces. That is especially so in an environment where every manner of rude, crude, or offensive material can be accessed and shared with others with a few strokes on a phone. We could have suggested that the Commission simply continue to do what it has done well for decades – investigate and settle charges, bring litigation, provide legal guidance, hear complaints from federal employees, and provide outreach and education.

We set cynicism to the side. We want to reboot workplace harassment prevention efforts.

-Feldblum, Chai, and Victoria Lipnic. Select Task Force on the Study of Harassment in the Workplace Report. Rep. EEOC, 20 June 2016. Web.

We know the Task Force ultimately convened to find out what more could – and should—be done to prevent workplace harassment. Its 16 members consisted of representatives of academia from various social science disciplines, legal practitioners on both the plaintiff and defendants’ sides, employers and employee advocacy groups and organized labor, from all parts of the country.

Wait a minute. If harassment continues to go unreported so often, doesn’t that suggest that the issue is not as big a priority to employees as we thought? If so, do we need to be so concerned about improved response or prevention methods? The EEOC answers that question as well in Part II, Section D of its report, arguing “There is a Compelling Business Case for Stopping and Preventing Harassment”.

What is the business case? Workplace harassment, like so many phenomena, triggers direct and indirect costs. The direct costs are as follows:

• Nearly one in three EEOC charges filed in FY 2015 (i.e. 27,893 of 89,385 charges) alleged some form of harassment, or a daily average of 76 charges
• The EEOC resolved 28,642 charges alleging in FY 2015 of which 5518 were in favor of the charging party, and resulted in $125.5 million in benefits for employees
• In 2010, through the EEOC’s pre-litigation enforcement process alone, employers paid out $698.7 million to employees alleging harassment
• One estimate of settlement payments and judgments arising from actual litigation just from 2012 sets the number at over $356 million
• The largest jury award in 2012 for sexual harassment was $168 million
• EEOC-initiated harassment litigation in 2015 consisted of 33 filed claims, 42 resolved claims, and a recovery of over $39 million on behalf of employees

These are clearly not small amounts, but they are not the only consequences of workplace harassment for employers.

The EEOC cites “a host of indirect costs that, while often invisible, can tower over the direct costs.” What would those be? According to the EEOC those hidden costs include, without limitation, decreased productivity, increased turnover, and reputational damage. To those who might think reputational damage is not so significant, consider that an employer with a bad reputation will often have trouble attracting and retaining quality talent, which in turn will impact productivity and ultimately, the bottom line.

Now that we understand that workplace harassment persists, that underreporting continues, and that there is in fact a compelling business reason to do something, what exactly do we do? That question really is the main focus of the EEOC’s report. The EEOC essentially advocates a holistic approach, starting with promoting a culture committed to preventing harassment. That commitment must start with the top echelons of management (leadership). Employers must then have systems in place that hold all employees accountable for complying with this company culture (accountability).

Many have seized on one particular (and unfortunately misinterpreted) finding, namely that training in its present form does not seem to have prevented harassment. Does that mean that training is not necessary? According to the EEOC, no – training must change and new and different approaches to training must be explored.

What does this mean, that training should change? Change to what? The EEOC’s findings were that much of the training done over the last 30 years focused primarily if not solely on avoiding legal liability. Instead, the EEOC recommends that training be tailored to the specific needs and circumstances of each employer, and not be a one-size-fits-all approach. Training should take into account the invaluable role that first-line supervisors and middle managers can play in preventing and stopping harassment – when they are trained correctly. Finally, training should be part of a “holistic culture of non-harassment that starts at the top”, rather than something that is done in a vacuum without consideration of the specific workforce and workplace.

It’s all fine and well to say that “New and different approaches to training must be explored”, but what does that mean? Thankfully, Commissioners Feldblum and Lipnic provide some specific ideas that “may show promise for harassment training”. Specifically, they mention “bystander intervention training”, which has been used to combat sexual assault on campuses, and would empower co-workers, giving them tools to intervene when they witness harassing behavior that “may show promise for harassment prevention”, and “workplace civility training” that focuses on promoting respect and civility in the workplace generally, rather than eliminating offensive behavior based on protected characteristics protected under anti-discrimination laws. These options that Feldblum and Lipnic seem to feel have promise are decidedly proactive in contrast to the majority of current efforts, which appear more reactive.

Employers may also be pleased that the EEOC has plainly acknowledged tensions between anti-discrimination laws and the National Labor Relations Board’s recent interpretations of the NLRA, and has recommended the following:

• The EEOC and the Board should confer, consult, and attempt to jointly clarify and harmonize the interplay of the National Labor Relations Act and federal EEO statutes with regard to the permissible confidentiality of the workplace investigations, and the permissible scope of policies regulating workplace social media usage.
• EEOC and the National Labor Relations Board should confer, consult, and attempt to jointly clarify and harmonize the interplay of the NLRA and federal EEO statutes with regard to permissible content of workplace “civility codes.”

Employers can actually benefit from reading the full report, which includes very informative, helpful information in a readable format and can be found here.

For more information, contact Ahmed Younies at (800) 708-3655, Extension 703 or ayounies@hurunlimitedinc.com.

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Steering Clear of the OFCCP in Your Hiring and Pay Practices

The OFCCP promised to focus on ensuring pay equity by federal contractors. Not only has it delivered, but it has gone at least one step further, in a very creative, innovative and proactive approach. Starting at least as far back as late 2013 the OFCCP began rooting out contractors that engage in steering practices. No, we are not referring to the operation of motor vehicles. Steering in the world of the OFCCP –and, to be fair, the EEOC as well—refers to a practice in which an employer steers people belonging to legally protected classes to certain types of jobs, which in turn leads to pay disparities among certain groups of people. In late 2013, the OFCCP issued Directive 307, designed to help Compliance Officers find evidence of that very practice when conducting Compliance Evaluations.

Now, many expect to see this theory used in hiring discrimination cases. It makes sense, and it’s fairly obvious: steering certain groups of people to certain types of jobs and away from others, without regard to actual qualification is classic hiring discrimination. But pay discrimination? Really? Is the OFCCP overreaching here? Well, maybe not. Let’s take a look.

We have heard and read many statistics that tend to prove that a significant pay gap between similarly situated, similarly qualified men and women continues. Certain types of jobs tend to pay better than others. Men tend to be more highly concentrated in more highly paid jobs. Women tend to be more highly concentrated in lower paying jobs. If an employer is steering women toward jobs that tend to pay less and men toward jobs that tend to pay more, then Voilà that employer is likely guilty of both hiring and pay discrimination.  We have heard of similar occurrences of pay gaps between similarly situated, similarly qualified African American and Caucasian workers.

Before the OFCCP can assert a claim of steering in either the hiring or compensation context, it must meet two criteria:

1. Promotions without internal posting: It must channel certain employees/applicants to certain jobs, such that the choice/decision to apply for a specific job is taken away from the applicant/employee. For example, a contractor does not post internal positions, but leaves it to management to promote existing employees or moves applicants or employees between requisitions.
2. Target channeling: The channeling must result in a lack of diversity in jobs and/or pay discrepancies between certain classes of people. The placement decision(s) results in jobs that are segregated or held by a specific gender, race, ethnic group, etc., and pay differences exist among those jobs that were subject to the employer’s decision(s)

Note that to satisfy the second criterion, the OFCCP need not rely on or look to utilization goals. In fact the job(s) in question need not even have placement goals. But can the OFCCP really infer intent just from statistics that show a strong concentration of certain groups in certain lower – or higher—paying jobs?

We might be able to draw our own conclusions from a few steering cases initiated by the OFCCP in the last two to three years.

Most recently the OFCCP filed suit in about March 2016 against AmeriQual Group, LLC, a contractor that provided portable meals to the Department of Defense. AmeriQual allegedly steered women toward light-duty table inspector jobs, whereas most of its male employees worked in higher-paying more labor-intensive loader and utility positions, an area with fewer job openings, without regard to the candidates’ actual skill or experience levels. Now, this case involves allegations that one might call reverse discrimination, in that it allegedly kept 237 male applicants from competing for jobs that paid less.  While we don’t yet know what the outcome will be, this case does show that the OFCCP is serious about eradicating gender-based pay and hiring discrimination against men and women alike. The result will not only be of interest to federal contractors, but could also be instructive to all employers, so stay tuned.

Similarly, in December 2014, the OFCCP required Hillshire Brands Company to compensate almost 2500 male applicants with $330,000 in back wages, interest and benefits as a result of practices that steered men toward more labor-intensive dumpster/stacker jobs (of which there were fewer) and women toward lower-paying biscuit assembler jobs, although both required similar qualifications, resulting in far fewer men than women being hired. The OFCCP found this distribution of labor to be based on “archaic ideas about ‘women’s work’ and ‘men’s work’.

Comcast paid almost $190,000 to settle a claim that at its call center in Everett, Washington, it steered female applicants to lower-paying positions assisting customers with cable services, and away from higher-paying positions assisting customers with internet services. (Those positions were apparently “too technical” for the female candidates.) The OFCCP also alleged that Comcast rejected a disproportionate number of Hispanics Asians and African-Americans.

Finally, in November 2015, the OFCCP reached a settlement of just over $1.85 million in back pay and interest with G&K Services over allegations that it assigned 444 female employees to lower-paying, “light duty” jobs while hiring men to perform higher-paying opportunities — across nine different locations. This practice also resulted in lower hiring rates for 2,327 male applicants in lower-paying general labor positions in five locations, even though they were as qualified as the female candidates. The OFCCP also found that G&K rejected over 400 qualified African-American and over 100 White candidates for general laborer positions in two of those locations. To resolve the matter, G&K agreed to offer job opportunities to 73 previously-rejected male, African-American and Caucasian applicants and to extend opportunities to 58 qualified female applicants to move into higher-paying positions.

So where does that leave the federal contractor – or any employee for that matter—that wants to steer clear of such allegations? At a minimum, you should consider doing the following:

• Unless you can point to –and document—a bona fide occupational qualification, focus on the candidates’ qualifications, not their gender, not their ethnicity or any other characteristics related to job performance;
• Take proactive steps to ensure that allocation of jobs in your organization is not disproportionately segregated by gender or other characteristics protected by law;
• Advertise job opportunities taking care to ensure that they are equally visible to men, women, African-Americans, Caucasians, Hispanics, Asians – or those bearing any other characteristics protected by law;
• Refrain from making assumptions on a candidate’s ability to perform a job based on gender (or ethnicity);
• Eliminate hiring and promotion practices that assume that women are not the primary wage earners in their families or households.
• Training – Your hiring managers/supervisors, at minimum, must be made aware of unlawful discrimination and the need for their selection decisions to be solely based on job qualifications. Periodic harassment prevention training is recommended.
• Engage a knowledgeable attorney and/or Affirmative Action consultant (and in some cases both) to ensure that your implementation of your AAP and your hiring practices in general stay ahead of the OFCCP’s efforts to root out pay disparities among the different protected groups of employees.

For more information contact Ahmed Younies at 714-426-2918, x.1 or ayounies@hrunlimitedinc.com

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Stereotyping: Think Fast, Think Slow

Strangers will sometimes look at my family and try to work out the relationships. My mother is Scottish and my father is Chinese. My husband’s heritage is Irish, our three biological sons look Scotch-Irish, and our daughter, who was adopted from China, looks like her Chinese grandfather. We clearly are a family unit, but people wonder how the pieces fit together.  This is a basic human tendency –  trying to make sense of others.

Social Cognition is an area of psychology that focuses on how people judge or make sense of social situations and of others’ behavior. However, the judgments that we make about others are frequently flawed. Human brains are wired for efficiency, for quick, but not necessarily accurate, judgments. In addition, when we first encounter new people, we usually know very little about them. When we make quick judgments based on very little information we often rely on stereotypes. These are beliefs that certain attributes are typical of members of particular groups.

Stereotypes can be positive or negative or true or false. For example, strangers sometimes assume because my daughter is Chinese that she is good at math (she is) and that she is a gifted musician (she is not).  Several years ago a parent at an ice skating event commented to me that my daughter must be a good ice skater because she is Chinese.  But surely 1.4 billion people (the population of China) cannot all be talented ice skaters.

The problem with stereotypes is that they ignore or discount a person’s individuality. The perceiver projects what s/he thinks about a particular group onto an individual. This tendency to stereotype is troublesome, especially in employment situations, because it may result in ineffective and unfair hiring decisions.

Consider the typical resume review situation in which HR personnel or hiring managers have a large number of applications/resumes to review in a short period of time. Quick judgments based on limited information are conditions that increase the likelihood of stereotyping, and these are common conditions under which resume screening occurs.

Below are some steps that may reduce the tendency to stereotype.

1. Time and Cognitive Resources. The activation of stereotypes is typically an automatic process. Taking a few extra moments to resist stereotyping may result in more accurate, fairer decisions. Set aside enough time for resume screening. In addition, work in a quiet place and avoid distractions and multi-tasking. These can drain one’s cognitive resources.
2. Sufficient Information. Generally, the more information that we have about a person the less likely we are to stereotype him or her. Obtain as much information as is possible and practical when making selection decisions.
3. Motivation. People who are motivated to resist stereotyping and to make fair employment decisions are more likely to meet this goal than those who are not. Placing an emphasis on selection decision fairness and holding employees accountable for fair decisions, may increase the motivation to be fair.

 

Dr. Marie Waung earned her Ph.D. in Industrial-Organizational Psychology from The Ohio State University. She is currently an associate professor at the University of Michigan – Dearborn where she teaches a variety of courses, including Diversity in the Workplace, Psychology and the Workplace, and Statistics for the Behavioral Sciences.  Professor Waung’s current research focuses on employee recruitment and selection, and employee impression management. She has published in journals such as Personnel Psychology, Organizational Behavior and Human Decision Processes, Journal of Business and Psychology, and Journal of Applied Social Psychology.  Her newest project examines the effects of diversity recruitment messages and early job experiences on new hire expectations, adjustment, and organizational commitment .

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