Preparing for OFCCP Compliance: Current Trends · Nina Le-Tse ([email protected]) ... CFR 60-3.15A(2)(a) and UGESP Q&A # 16 “Q16. Should adverse impact determinations be made for all

Preparing for OFCCP Compliance: Current Trends

November 05, 2013

Overview of Biddle Consulting Group, Inc.Affirmative Action Plan (AAP) Consulting and

Fulfillment

• Thousands of AAPs developed each year• Audit and compliance assistance

• AutoAAP™ Enterprise software

HR Assessments

• AutoGOJA™ online job analysis system

• TVAP™ test validation & analysis program• CritiCall™ pre-employment testing for 911 operators

• OPAC™ pre-employment testing for admin professionals• Video Situational Assessments (General and Nursing)

Custom Test Development

& Validation

•“High stakes” test development

•Validation studies in response/prevention to litigation

EEO Litigation Consulting

/Expert Witness Services

• Over 200+ cases in EEO/AA (both plaintiff and defense)

• Focus on disparate impact/validation cases

Compensation Analysis• Proactive and litigation/enforcement pay equity studies• COMPare™ compensation analysis software

Publications/Books• EEO Insight™: Leading EEO Compliance Journal

• Adverse Impact (3rd ed.) / Compensation (1st ed.)

BCG Institute for Workforce Development

• 4,000+ members• Free webinars, EEO resources/tools

Speaking and Training • Regular speakers on the national speaking circuit

Biddle Consulting Group, Inc.

193 Blue Ravine, Suite 270

Folsom, CA 95630

916.294.4250

www.biddle.com | www.bcginstitute.org

Nina Le-Tse ([email protected])

Jeff Davies ([email protected])

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CONTACT INFORMATION

Copyright (c) 2013 Biddle Consulting Group, Inc

1.

The Audit Letters Keep Coming…

4Copyright (c) 2013 Biddle Consulting Group, Inc

• OFCCP’s Fiscal Year began October 2013

– Audit letters continue to arrive from previous fiscal

year

• CSAL/Audit letters received in heavy doses

during December 2012

• Second batch of CSAL/Audit letters sent out the

end of March 2013

– A few requests for extension have been granted;

most continue to be denied

1. The Audit Letters Keep Coming…


• CSAL’s are now being received by the actual

location (no longer by HQ)

- CO’s typically give a courtesy call to let the

location know that the official letter is coming

- It is also a way for the CO to confirm that the

address is correct

- More recent audit letters bear a tracking

number

1. The Audit Letters Keep Coming…


2.

Updated Census Data


• Release of “2010” Census EEO tabulation on

November 29, 2012.

– Posted on the American Fact Finder webpage (http://factfinder2.census.gov)

• Notice given in May 2013 that all AAP’s created

on or after January 1, 2014 must utilize new data

– Updated data may be used immediately

– Crosswalk available to help contractors with

transitioning

2. Use of Updated Census Data


3.

More Adverse Impact Scrutiny


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3. More Adverse Impact Scrutiny

Findings of Violation (2004-2011)


2004-2007 data provided by the Center for Corporate Equality 2012

2008-2013 data provided by USDOL (http://ogesdw.dol.gov/search.php)

Hiring Promotion Termination Selection Salary Total

Year (#) (%) (#) (%) (#) (%) (#) (%) (#) (%) (#) (%)

2004 50 87.7% 0 0.0% 1 1.8% 1 1.8% 5 8.8% 57 100.0%

2005 41 80.4% 0 0.0% 0 0.0% 1 2.0% 9 17.6% 51 100.0%

2006 61 87.1% 0 0.0% 0 0.0% 3 4.3% 6 8.6% 70 100.0%

2007 57 86.4% 0 0.0% 0 0.0% 5 7.6% 4 6.1% 66 100.0%

2008 72 76.6% 4 4.3% 3 3.2% 8 8.5% 7 7.4% 94 100.0%

2009 79 79.0% 2 2.0% 0 0.0% 11 11.0% 6 6.0% 100 100.0%

2010 66 64.1% 4 3.9% 2 1.9% 6 5.8% 18 17.5% 103 100.0%

2011 83 57.2% 11 7.6% 9 6.2% 12 8.3% 30 20.7% 145 100.0%

2012 94 57.3% 10 6.1% 9 5.5% 14 8.5% 43 26.2% 164 100.0%

2013 18 42.9% 6 14.3% 3 7.1% 3 7.1% 12 28.6% 42 100.0%

Total 621 69.6% 37 4.1% 27 3.0% 64 7.2% 140 15.7% 892 100.0%

• OFCCP continues to rely upon group with

highest selection rate as reference group, not just

the historically advantaged group.

–Any groups can be compared (Asians vs. Whites,

Blacks vs. Hispanics, etc.)

o ALJ decision on August 5, 2013 sets limits on aggregating for analyses.

–Highest selection rate is not always the most appropriate analysis!



Traditional


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Group with Highest Selection Rate

Be Careful! Is the group with the Highest Selection Rate truly the

appropriate reference group?


More Appropriate Reference Group



CFR 60-3.15A(2)(a) and UGESP Q&A # 16

“Q16. Should adverse impact determinations be made for all groups

regardless of their size?

A. No. Section 15A(2) calls for annual adverse impact determinations to be made for each

group which constitutes either 2% or more of the total labor force in the relevant labor area,

or 2% of more of the applicable workforce. Thus, impact determinations should be made

for any employment decision for each group which constitutes 2% or more of the labor force

in the relevant labor area. For hiring, such determination should also be made for groups

which constitute more than 2% of the applicants; and for promotions, determinations

should also be made for those groups which constitute at least 2% of the user's workforce.”

• Compliance Officers are starting to ask for

“internal audit reports” (i.e. adverse impact

analyses and compensation analyses)

–Previously not standard practice, yet within their reach!

o “Self-monitoring techniques” are required; now the OFCCP

wants to see them

–Huge concern for contractors in doing self-evaluations

o “Will this be used against me?”

o Are the analyses properly run?



4.

Basic Math is Revived


4. Basic Math is Revived

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Hires, Terms, Promos

This Year’s WF

Last Year’s WF

– Does not take into consideration transfers, demotions and other movements within the organization

– It will be up to the contractors to provide really good explanation/documentation to support the data included in the

AAP

– Reconcile the data!


5.

Directive 307

Compensation Analysis Impact


5. Directive 307


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• Directive 307

–Effective upon release February 28, 2013

– Previous standards and guidelines were also

rescinded as “too restrictive”

–Articulated OFCCP’s widened approach in

evaluations of compensation

o A variety of tools used on a case-by-case basis

o Systemic, small group, and individual discrimination

o Contractor-supplied factors explaining differences in pay

will be reviewed, and may be rejected


5. Directive 307


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• Directive 307

–Pay Analysis Groups

o Job groups, job titles, units, categories or other

unspecified groupings used to evaluate compensation

o OFCCP may choose to define groupings themselves!

• Variables “statistically controlled”

o Document all factors used in determining compensation

• OFCCP is soliciting and using this information in evaluations


5. Directive 307


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Pay Analysis Group Examples


Across 40 Locations

OFCCP gains

statistical power

using contractor’s

job titles!

Sizeable

differences across

job titles!

5. Directive 307


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• Will the OFCCP be successful in

implementing these changes?

–Possibly, but not right away

o Must acquire/train more qualified statisticians for analyses

o Systems and techniques are being implemented and

refined

–Contractors are still left with navigating murky

audits now!

o Be prepared for lengthy audits (1-2 yrs) and increased costs to explain your practices


6.

New Regulations

(Persons with Disabilities and Covered Veterans)


6. New Regulations (503 & 4212)

• April 2011: Notice of Proposed Rulemaking –

Veterans (final rule sent to OMB July 30, 2013)

– Significant changes to outreach/recruitment/record

retention

– Self-identification of “Protected Veterans” pre-offer

– New quantitative analyses to include hiring goals



• December 2011: Notice of Proposed

Rulemaking – Individuals with Disabilities (final

rule sent to OMB July 31, 2013)

– Significant changes to outreach/recruitment/record

retention

– Hiring goals of ~7% per job group within each AAP

– Self-identification pre-offer

– New quantitative analyses of applicants, hires,

workforce


• New Regulations for Persons with Disabilities

and Covered Veterans published Sept. 24, 2013.

– Systems must be ready to track by March 24, 2014.

– Reports are required in the next reporting cycle following one year of data collection.

• 8% Hiring benchmark for Covered Veterans

• 7% Utilization goal for Persons with Disabilities



7.

OFCCP Requests During Audit


7. OFCCP Requests During Audit

• Resubmit compensation data to include job

groups or pay bands; include any other factors

used by the federal contractor to determine pay

• Submission of self-monitoring reports (i.e.

adverse impact and compensation analyses)

• Job Group Analysis from previous year

• Copy of contractor’s FMLA policy



• Copy of filed EEO-1 reports

• Copy of VETS-100/100A reports

• Evidence of outreach

• Evidence of job openings being posted

• Copy of contractor’s policy regarding

background checks

• EEOC recently changed its policy on use of criminal history

in the selection process



• Some CO’s started sending out confidentiality

letters to contractors

• Some CO’s are asking for mid year employee file

• At least in one region: CO’s are instructed to ask

for the same data/information for all audited

locations within the same organization

• OFCCP is looking to consolidate audits from an

organization to a single CO.



• Compensation factors and data from the time

each employee started work (up to 10 years in

some cases)

• Background information regarding the audited

location (when was it acquired, how many

employees were laid-off due to acquisition, etc.)

• Proof of outreach, recruitment, and supporting

data for job groups with only 1 hire but observed

to have very few applicants30



Documents

Preparing for OFCCP Compliance: Current Trends · Nina Le-Tse ([email protected]) ... CFR 60-3.15A(2)(a) and UGESP Q&A # 16 “Q16. Should adverse impact determinations be made for all