A New OFCCP EraShakeups, Breakups, and Mergers – Oh, My!

Allen Hudson, SHRM-CP, PHRDirector of Corporate Communications - HudsonMannOctober 17, 2017

Session Agenda

CurrentState of OFCCP

OFCCP Audit Stats & Trends

Regulatory Updates

Your Questions

Current OFCCP StatusPart 1

DOL LeadershipPresident• Donald Trump

Secretary of Labor• Alex Acosta

OFCCP Director• VACANT (Acting Director, Thomas Dowd)

OFCCP Deputy Director• Thomas Dowd

To Merge, or Not to Merge?Merger reported to be off the table

US Chamber and many advocacy groups against it

Not much support in the government (including EEOC & OFCCP).

So what will OFCCP Look like under the Trump administration?

Thomas Dowd at NILGRecurring themes:

- Quality of Audits

- Compliance Assistance

Quality of Audits – Tom DowdQuality more important that quantity of audits

Secretary Acosta is no stranger to civil rights and Affirmative Action

Asserted OFCCP’s jurisdiction

Doesn't believe in doing more with less

OFCCP Agency Trends 2016 - 2018

105.4 105.2

94.5

88

90

92

94

96

98

100

102

104

106

108

FY 2016 FY 2017 FY 2018

Dol

lars

(in

Mill

ions

)

OFCCP BUDGETBudget Amount

615

571

563

530

540

550

560

570

580

590

600

610

620

FY 2016 FY 2017 FY 2018

# F

TE

Empl

oyee

s

OFCCP HEADCOUNTFTE Employees

Compliance Assistance – Tom DowdCompliance assistance does not get you on the audit list

Ideas for voluntary training programs

Reinforced the concept of VOLUNTARY compliance

Applauded contractors for their work against discrimination

“If you’re timely, accurate, and work with us on data, chances are you get a letter of compliance.”- Thomas Dowd at 2017 NILG Conference

Compliance Assistance – Debra CarrWhat can OFCCP do to incentivize compliance outside of a compliance evaluation?

Past Compliance Assistance activities included: FAQs, speaking, website, etc.

Ideas for future activities:1) training2) national training conference3) awards4) registered agent of service for scheduling letters?5) town halls for feedback

Compliance Assistance – Debra CarrAcknowledged aspirational nature of Veteran and IWD goals and benchmarks

3% response rates on Contractors survey (sent to 6600)

Halted national office training for COs

Will attach expertise to performance standards and the work they are assigned

“Compliance alone won't change the employment picture for underrepresented groups.“- Debra Carr at 2017 NILG Conference

Still In FocusPay Discrimination

Mega Construction Projects

Skilled Regional Centers (New York & San Francisco)

High Quality Compliance Evaluations

SpeculationACM vs. ACE – where do we go next?

U.S. Chamber of Commerce on OFCCP“Right Mission, Wrong Tactics” report

Criticized OFCCP for adversarial approach & lack of transparency

Recommends OFCCP:

- adopt a more neutral enforcement approach

- increase compliance assistance activities

Audit Trends and Focus AreasPart 2

OFCCP By the Numbers

Source: www.dol.gov/ofccp/BTN/index.html

3975

4923

4333

3907

4942

4007 4000 4100

3802

2602

1696

1057

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

OFCCP AUDITS BY FISCAL YEAROFCCP Audits

Source: OFCCP Enforcement Database

Audit OutcomesCompletion Type FY 2017 (Q1-Q3) Avg. FY07-FY16

Conciliation Agreement or Consent Decree

18.5% 17.1%

EO 11246 Violation 18.5% 13.8%Section 503 Violation 6.6% 9.7%Section 4212 Violation 9.1% 12.3%Discrimination Violation 3.6% 1.8%

Source: www.dol.gov/ofccp/BTN/index.html

1,057 Compliance ReviewsFiscal Year 2017

816Notice of Compliance

206Conciliation Agreements

30Financial Agreements

5Consent Decree

77% 19%

2.8% <1%

Source: OFCCP Enforcement Database

FY 2017 monetary relief (Q1-Q3)$10.5 M in FY 2016$6 M in FY 2015

New Audit Scheduling LetterRequires additional compensation information

Updated for new VEVRAA and Section 503 regulations

Must show detailed race/ethnicity counts in activity reports

Audit Trends and Focus AreasAdverse Impact in Hiring

Compensation and Pay Equity

Job Steering

Outreach

Recordkeeping

of discrimination findings are from hiring discriminationFY 2017

Case Study – Beverage DistributorConsent decree for $175,000

Alleged hiring discrimination against black applicants

Violations included:- failing to keep complete & accurate records - failing to evaluate selection procedures

Avoiding Hiring DiscriminationSolid job descriptions

Consistent hiring process

Use disposition codes

Annual adverse impact analysis

Validate all assessments and tests

of discrimination findings are from compensation issuesFY 2017

Compensation TrendsCompensation Interviews:

20 minutes – 3 hours longDetailed, repetitive questions on pay policies and procedures

Pay Analysis Groups

Compensation Interview Questions

Does your company have written guidelines on compensation administration?

Who determines the starting salary for a new employee?

Are there annual performance increases?

How do you ensure fair pay?

Do you provide training on compensation administration?

Complaint InvestigationsNew electronic filing form and system

$50K settlement from disability complaint

$19,600 average monetary relief (FY 2007-FY 2016)

79 Investigations FY 2017 Q1-Q3 (4 with monetary relief)

Race29%

Sex19%

Disability18%

National Origin12%

Veteran11%

Religion4%

Color4%

Gender Identity2%

Sexual Orientation1%

Complaints by Basis FY 2017 (Q1-Q3)

recent job steering settlement amountFY 2015

Job Steering Case Study444 women steered into “light-duty” jobs with lower wages

Adverse impact in hiring on males, African-Americans and Caucasians

Settlement from reviews at nine separate facilities

Avoiding Steering IssuesRequire applicants to apply for specific positions

Document applicant choice

Defined application process

Outreach & Documentation Violations

Ensure mandatory job listings are occurring

Document specific outreach towards women, minorities, veterans and individuals with disabilities

Maintain 3 years’ of employment and recruitment data

How Do You Minimize Potential Liability?•Follow a formal application process

•Utilize disposition codes

•Avoid “informal” expressions of interest

•Set up an active consideration period

•Don’t accept applications for “any opening”

•Posting temp to hire opportunities

•Review employee referral selection process

•Set and utilize minimum qualifications – track outcomes

•Review testing validation

Regulatory UpdatesPart 3

Recent ChangesFair Pay and Safe Workplaces rescinded

EEO-1 Report (pay data component shelved)

Paid Sick Leave for Federal Contractors here to stay

Minimum Wage for Federal Contractors Increasing in 2018

Your questionsPart 4