A recap of OFCCP settlements & regulatory changes from 2014
As Martin Luther King Jr.’s birthday draws near during these turbulent times, it leads me to reflect on the recent changes seen in affirmative action compliance as they relate to his dreams of a nation where all men are created equal. Note that 2014 marks the 50th anniversary of the 1964 Civil Rights Act and it’s interesting to make comparisons from the 1960’s to now . Martin Luther King Jr. (MLK Jr.) was dedicated to equality and was present as Lyndon Johnson signed the Civil Rights Act dedicated in part to address race and sex discrimination in employment. The Office of Federal Contract Compliance Programs (OFCCP) is the Federal agency tasked with enforcing regulations mandating that Federal contractors provide affirmative action and equal employment opportunity to their employees. Below is a brief look at activities we identified as newsworthy from 2014. We will keep MLK Jr.’s perspective in mind when reading the list below:
2014 Hiring Settlements • Parsons Brinckerhoff – Race/ethnicity discrimination case involving 247 Hispanic, Asian-American, African-American, Native-American, and mixed race applicants rejected for assistant engineering jobs. The company must pay $188,000 in back wages and interest to affected individuals. • Lincoln Electric Company – Race discrimination case involving 5,557 African-American applicants who were rejected for entry-level factory and production positions. The company must pay $1 million in back wages and interest to the affected individuals • Westat - Race/ethnicity discrimination case involving 3,651 African American, Asian American, Hispanic, and female applicants. The company must pay a total of $1,500,000 in back wages and interest.
These three (3) hiring settlements are evidence that the OFCCP is busy investigating the hiring practices of federal contractors. Why? Because it is well known that the entry level hiring continues to be an area where the OFCCP finds high-volume discrimination during the selection process and record keeping, or lack thereof, is a big part of the problem. The companies mentioned will be revising their selection processes to be blind of the gender and/or race/ethnicity of employees or applicants. Federal contractors continue to struggle with the ever increasing record keeping regulations – and tracking and dispositioning applicants / hires is one of the most important components.
2014 Compensation Initiatives
• Minimum wage increased to $10.10 for federal contractors and subcontractors.
• Presidential Memorandum titled “Advancing Pay Equity Through Compensation” • Non-Retaliation for Disclosure of Compensation (revision to Executive Order 11246) • NPRM published by OFCCP “Government Contractors, Requirement to Report Summary Data on Employee Compensation”
The White House has been touting systemic compensation issues since 2008 when Barack Obama was elected president. At the same time, compensation has been a priority for the OFCCP for more than a decade. During OFCCP compliance audits, they leverage Directive 307 (http://www.dol.gov/ofccp/regs/compliance/directives/dir307.htm) to investigate compensation practices for any evidence of discrimination. The OFCCP is not only looking at differences in base salary per their previous practice; rather the OFCCP is leveraging detailed data to seek evidence that the contractors’ compensation process may not be fair and objective. The four (4) initiatives listed above are a clear indication that compensation practices continue to be carefully scrutinized.
So much has changed in the past fifty years since MLK Jr. advocated for civil rights for all. According to the Bureau of Labor Statistics in 1950, only one in three women participated in the labor force. Now, the population of women in the workforce hovers around 50%. More is at stake for women now, particularly if compensation practices are not fair. Record keeping again plays a heavy hand for federal contractors during OFCCP audits. At the end of the day, statistical analyses are dependent upon vigilant record keeping where job related factors contribute to employee compensation.
2014 OFCCP Regulatory Changes & Directives • Banning Discrimination by Federal Contractors Against Gay, Lesbian, Bisexual and Transgender Employees (Executive Order 13672) – Federal contractors and subcontractors will now prohibit discrimination against applicants and employees based on sexual orientation and gender identity, in addition to the other categories currently covered by EO 11246. • Significant Changes Section 503 of the Rehabilitation Act of 1973, as amended (Sec 503) • Vietnam Era Veterans’ Readjustment Assistance Act, as amended (VEVRAA)
There were many changes in compliance requirements for Federal Contractors in 2014. Listed above are three (3) significant regulatory changes that will require additional record keeping and significantly more time and resources. Equal employment opportunity (EEO) in practice means hiring, promoting, compensating etc. without regard to race, color, religion, sex, sexual orientation, disability status, gender identity, national origin, or protected veteran status. The OFCCP expects that employers will demonstrate EEO by making employment decisions specific to job-related criteria leaving any chance of discrimination behind. Also, because of the changes to Section 503 and VEVRAA (referenced above) employers are mandated to give more attention to their EEO practices and opportunities related to individual with disabilities and protected veterans.
Sexual Harassment • Constructora Santiago II Corp – Female carpenters were sexually harassed, retaliated against, and denied regular and overtime work hours comparable to those of their male counterparts. The company will pay three (3) females $40,000 and make other changes to accommodate female employees.
Most people would agree that women deserve to go to work without fear of being harassed or retaliated against based solely on their gender. Even today, there are jobs where women are not accepted by their peers. In the case mentioned, women were harassed, retaliated against, and denied regular and overtime work. Affirmative action and equal opportunity compliance is very time consuming and costly, however, financial settlements and public scrutiny are worse.
Martin Luther King Jr. would have been 86 this month and every day we work to get a little closer to fulfilling his dream. Part of the dream was “…one day this nation will rise up and live out the true meaning of its creed: 'We hold these truths to be self-evident: that all men are created equal.” Happy birthday to MLK Jr. and his dream. Our progress toward equal employment opportunity has made significant strides over the last fifty years, but there is still significant room for improvement. To learn more about the regulatory changes mentioned in this article, please see the forthcoming article by OutSolve’s Vickie LeNormand.
Author: Desiree Throckmorton Director, OutSolve West