The Storm Arrives

by Osterndorf, Bill Tuesday, April 10, 2012
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The Storm Arrives

At HR Analytical Services, we have been predicting major changes in the way that the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) would approach affirmative action compliance reviews. We are now seeing evidence of those changes. Among the recent requests that have been made of companies during OFCCP reviews are the following:
  • • Multiple companies have been asked to provide extensive compensation-related information on all employees

  • • Multiple companies have been asked for lists of employees with disabilities, including employees who did not self-identify as having a disability

  • • Multiple companies have been asked for proof of outreach efforts made to find persons with disabilities and veterans for specific open positions

  • • Companies have routinely been selected for on-site reviews, even when the company had a small number of employees at the relevant facility and/or a small number of hires at the facility

  • • Companies have been asked to provide screen shots demonstrating that positions were listed with the relevant state employment service office

  • • Companies have been asked to provide information on a group of positions where minority applicants were statistically favored over white applicants
All of these actions directly correlate with OFCCP’s new initiatives and objectives. Among these major initiatives are the following:
  • • OFCCP intends to focus on compensation. OFCCP withdrew its 2006 documents that provided guidance regarding compensation and has not provided any formal guidance in place of those documents. However, the agency is clearly using both multiple regression analyses and cohort (i.e. one-to-one) analyses to determine whether there is any compensation discrimination against minorities and/or females. We expect that every compliance review will include questions about compensation.

  • • OFCCP intends to focus on issues concerning persons with disabilities and veterans. OFCCP’s proposed regulations regarding both groups have not been published in final form. However, the agency has moved forward to enforce the existing regulations concerning these groups and has incorporated some elements of the proposed regulations into its compliance reviews.

  • • OFCCP intends to focus on outreach. While much of this focus on outreach is centered on veterans and persons with disabilities, the agency does expect some outreach to minorities and females when there are placement goals for these groups. OFCCP not only expects outreach; it expects documentation of this outreach. This documentation must demonstrate that there were specific outreach efforts made for each open position.

  • • OFCCP will investigate situations where there is statistically significant adverse impact involving race/ethnicity or gender. During the first decade of the 21st century, OFCCP was primarily focused on finding situations where minorities or females as a class were the possible victims of discrimination in hiring. This focus was most prominently reflected in the agency’s Internet Applicant rule, which came into effect in 2006. While the agency now has other priorities, it continues to seek out situations where there is discrimination involving a class of employees or applicants. However, OFCCP will now investigate situations involving one race/ethnicity group (including whites) and either gender rather than focusing solely on minorities as a whole or on females.
In July of 2011, the head of OFCCP, Patricia Shiu, said that “Affirmative action can no longer be measured by good faith efforts.” Director Shiu was sending a strong message that the agency now expects results from federal contractors and subcontractors. That message has been reinforced by the agency’s regularly stated position that “Federal contracts are a privilege and not a right.” As 2012 continues, we expect to see OFCCP maintain its aggressive enforcement of the affirmative action regulations.

Did You Know…that 2012 will be one of the most tumultuous times in OFCCP’s history? Between the number of new initiatives and the agency’s changed behavior during compliance reviews, reviews are likely to be more contentious and unpredictable than ever.

For more information on where OFCCP stands and how OFCCP is approaching compliance reviews, contact Bill Osterndorf at wosterndorf@hranalytical.com.

Please note: Nothing in this article is intended as legal advice or as a substitute for any professional advice about your organization's particular circumstances. All original materials copyright HR Analytical Services Inc.