Logistics International Hospitality Enters into Conciliation Agreement with OFCCP to Resolve Pay Transparency Complaint

Company will pay $100,000 in exchange for a release of claims plus non-monetary relief.

The Office of Federal Contracts Compliance Programs (OFCCP) conducted a complaint investigation of Hospitality Logistics International, LLC and found that the company violated 41 CFR § 60-1.4(a)(3). OFCCP claimed that Hospitality Logistics International terminated an employee for inquiring about pay.

To resolve the allegations, Hospitality Logistics International entered into a conciliation agreement and agreed to pay the affected employee $100,000 with the signing of a release of claims form. They will provide a neutral reference if contacted by any third party and not bar the employee from re-employment. The contractor will also “revise and adopt a policy that: (1) does not prohibit employees or applicants from discussing or disclosing their compensation or the compensation of others and (2) prohibits discrimination against employees and applicants because they have inquired about, discussed, or disclosed their own pay or the pay of another employee or applicant.” The policy, including a pay transparency nondiscrimination provision, must be included in the company’s employee manual, handbook, and intranet site.

Hospitality Logistics International must also conduct transparency nondiscrimination training to all employees. Additionally, they must submit the name, title, resume and qualifications of the trainer, the proposed schedule of the training, the proposed training content, including all supporting materials. Within 30 days of the training delivery, they must provide the agency with the name and title of each employee who is to attend the training.

Hospitality Logistics International will provide the OFCCP with two reports, one within 90 days and the other within 120 days from the effective date of the agreement.

OutSolve’s Take 

This appears to be one of the first settlements associated with OFCCP’s final rule amending regulations to implement Executive Order 13665 – Prohibitions Against Pay Secrecy Policies and Actions. The final rule prohibits contractors, with contracts over $10,000 (after January 11, 2016) from discriminating or discharging any employee or applicant for employment for inquiring about, discussing, or disclosing the compensation of the employee or applicant or another employee or applicant. Contractors are also required to disseminate a Pay Transparency Policy Statement as prescribed by OFCCP. For more information, go to the OFCCP FAQs on Pay Transparency Regulations.

More recently, OFCCP published a revised Directive, Advancing Pay Equity Through Compensation Analysis, which enumerates the contractor’s compliance obligations to conduct an in-depth analysis of their total employment processes, as well as their compensation systems, to determine if there are impediments to equal employment opportunities. The Directive identifies the contractor’s obligations which includes identifying the method of analysis used, e.g., multiple regression, decomposition regression, eta-analytical tests of z-scores, etc. (See blog)

This settlement and revised Directive show OFCCP’s commitment to pay equity and pay transparency. It is important that contractors conduct Pay Equity Analyses in addition to complying with the Pay Transparency regulation. For clients who wish to take preventive measures to evaluate their pay practices, OutSolve’s Pay Equity Analysis Services are available. Additional information on OutSolve’s Pay Equity Analysis or other compliance services may be obtained at info@outsolve.com or by calling 888-414-2410.