Corporate Management Compliance Review Briefing

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Preparing for an OFCCP Corporate
Management Compliance Evaluation
2012 ILG National Conference
Waikoloa, Hawaii
August 28, 2012
Equal Employment Advisory Council
1501 M Street, N.W. | Suite 400
Washington, D.C. 20005
Presented by:
Jeff Norris
Chris Gokturk
The Equal Employment Advisory Council (EEAC) is a nonprofit
association of private sector employers dedicated exclusively to the
elimination of workplace discrimination through advancement of
practical and effective equal employment opportunity, affirmative action,
and diversity programs. The materials developed for this program and
the discussions based upon them are designed to provide accurate and
authoritative information regarding the subject matter covered. They
are provided with the understanding that EEAC is not engaged in
rendering legal, accounting, or other professional services. For legal
advice or other expert assistance, the services of a competent attorney
or other professional should be sought.
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 2
Agenda
•
History of OFCCP corporate headquarters
compliance evaluations
−
•
OFCCP scheduling procedures for corporate
headquarters compliance evaluations
−
•
Distinction between “routine” and “corporate
management” headquarters audits
Inclusion of headquarters establishments on recent
CSAL letters
Preparing the desk audit submission
−
Preparing your management and staff
−
Responding to the Scheduling Letter
−
Defining the scope of the audit
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 3
Agenda
•
Preparing for the onsite
−
Key focus areas
−
Marshall voluntary efforts beyond
technical compliance
−
Develop audit “themes”
•
Managing the onsite investigation
•
Closeout conference
−
•
OFCCP presentation
Concluding Q & A
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 4
History of OFCCP Corporate
Headquarters Compliance
Evaluations
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 5
History of OFCCP Corporate
Headquarters Compliance
Evaluations
• Pre 1990 all headquarters audits
“routine”
– No special focus on management positions
• “Glass Ceiling” initiative developed in
1990
– Addressed organizational and attitudinal
barriers to placement of women and
minorities in mid- and senior-level
management positions
– Focus on selections, development pipelines
and compensation
– Initially, big deals for OFCCP and contractors
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 6
CMCE Figures (FY 1991 – 2011)
•Glass ceiling audits (aka CMR or CMCE audits) now
conducted routinely:
60
50
40
30
44
20
52
47
37
36
40
42
36
50
42
31
27
10
35
34
32
26
13
© 2012 Equal Employment Advisory Council
10
11
06
07
08
09
01
02
03
04
05
9
97
98
99
00
91
92
0
6
93
94
95
96
8
50
2012 ILG National Conference | August 28, 2012 | Page 7
History of OFCCP Corporate
Headquarters Compliance
Evaluations
• Focus areas reflect Administration priorities
– Bush 1: individuals hitting the “glass ceiling”
– Clinton: individuals with their “feet stuck in the mud”
– Bush 2: victims of systemic discrimination
– Obama: renewed emphasis on affirmative action outreach for
veterans and individuals with disabilities
• Differences between routine headquarters and CMCE audits
today
– Technical compliance issues (AAPs, transactions analyses,
compensation) identical
– CMCEs address selection, development and compensation
practices for mid- and senior-level management positions
– CMCEs involve participation of senior OFCCP and contractor
management
• Consider a CMCE to be a routine audit with a corporate
management overlay
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 8
History of OFCCP Corporate
Headquarters Compliance
Evaluations
• Differences between routine headquarters and CMCE audits
today
– Technical compliance issues (AAPs, transactions analyses,
compensation) identical
– CMCEs address selection, development and compensation
practices for mid- and senior-level management positions
– CMCEs involve participation of senior OFCCP and contractor
management
• Consider a CMCE to be a routine audit with a corporate
management overlay
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 9
OFCCP Scheduling Procedures for
Corporate Headquarters
Compliance Evaluations
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 10
OFCCP Scheduling Procedures for
Corporate Headquarters Audits
•
Set out in 2001 in Directive 243
•
Separate procedures for routine audits and CMCEs
– Both start with FCSS evaluation of EEO-1, census, and other
appropriate data
– Establishments “flagged” for possible audit by FCSS placed on one of
two lists:
• Standard supply and service contractor scheduling list, or
• CMCE scheduling list
•
CMCE scheduling list limited to headquarters establishments of
corporations having:
– 4,000 employees or more, and
– More than one reporting contractor establishment
•
Headquarters establishments not meeting these criteria placed on
standard scheduling list
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 11
OFCCP Scheduling Procedures for
Corporate Headquarters Audits
• District and area offices instructed to schedule
audits sequentially off of both lists, but…
– For CMCEs priority given to headquarters
establishments not previously audited
• Corporate scheduling announcement letters
(CSALs) now provide pre-notification to
companies for both routine compliance
evaluations and CMCEs of headquarters
establishments
• Recommendation: if you receive a scheduling
letter for your headquarters contact OFCCP to
determine whether it is a routine audit or a CMCE
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 12
Preparing the Desk Audit Submission
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 13
Preparing the Desk Audit
Submission
• Confirm with OFCCP whether it is a
routine audit or CMCE
– Scheduling Letter might (or might not)
provide a clue
• Notify management and staff
– Management likely to be personally involved
(avoid surprises!)
– Several staff functions potentially involved
(compliance; legal; recruiting; executive
staffing; management development;
compensation)
– Essential that all work together as a team
– You have their attention – capitalize on it!
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 14
Preparing the Desk Audit
Submission
• Conduct early overview briefings (adjust detail to
audience)
– Federal civil rights laws
• EEOC and OFCCP enforced
– Requirements of federal contractors
• Nondiscrimination vs. affirmative action vs. diversity
• Standard of compliance (good faith efforts)
– OFCCP compliance evaluation process
• Desk audit, onsite, off-site analysis
– Likely areas of OFCCP focus
• Entire workforce under audit; not just management
positions
– Possible outcomes and remedies
• Monetary, programmatic, contract remedies
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 15
Preparing the Desk Audit
Submission
• Assign roles and responsibilities
– Team leader; information collection and coordination; role of counsel; etc.
– Establish legal privileges
– Establish team communication protocols
– Establish timelines for desk audit package
preparation
• Emphasize need for confidentiality
– Exchange information on a “need to know” basis
– Do not publicize or overdramatize audit
– If asked, indicate compliance audits are routine for
federal contractors; no big deal
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 16
Preparing the Desk Audit
Submission
• Develop strategy for defining the scope of the
audit
– OFCCP views entire corporation as potentially in
play
• Employees located elsewhere whose careers are
managed from headquarters
• Centrally-administered policies (e.g., compensation
and benefits; employment tests; recordkeeping; etc.)
– Encourage limiting scope of audit to individuals
encompassed by the corporate establishment AAP
• Corporate AAP is the castle
– But headquarters AAP likely to include some (perhaps
many) corporate initiative positions from the field
• Make OFCCP explain need for extending beyond
castle
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 17
Preparing the Desk Audit
Submission
• Prepare the desk audit submission
package
– Identical (structurally) for routine
headquarters evaluations and CMCEs
– Strive for a submission that shows OFCCP:
• You know what you are required to do as a
federal contractor
• Your corporate commitments exceed minimum
legal requirements
• You look forward to explaining your pro-active
employee development programs to OFCCP
– A timely and complete submission package
would be a good way to start
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 18
Preparing the Desk Audit
Submission
• Affirmative action plans
– Technically compliant
– Current data
– Narratives that address issues revealed in the data
– Do not underestimate the value of a well-written, neatlooking AAP
• Transactions data
– Check and double check data for accuracy
– Conduct both traditional (minority/non-minority) and
minority subgroup impact ratio analyses
– Consider pro-actively addressing in submission potentially
problematic statistical results
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 19
Preparing the Desk Audit
Submission
• Compensation data
– Check and double check data for accuracy
– Conduct thorough pre-submission analyses
• Base pay
• Variable pay
• Perquisites and other “add-ons”
– Attend this afternoon’s session on “Constructing and
Conducting a Compensation Analysis”
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 20
Preparing for the Onsite
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 21
Preparing for the Onsite
• Post-submission, pre-onsite is perhaps the most important
time in a CMCE (and can be important in a routine audit as
well)
• Try to anticipate where OFCCP might want to investigate
further based upon the desk audit submission
– Complete inquiry into any problematic selections revealed in
transactions data
– Finalize a preferred methodology for evaluating
compensation
• Cohort analyses are particularly important for management
positions
– Consider making appropriate pay equity adjustments
(regardless of the race, ethnicity or gender of the recipients)
– Address areas where good faith efforts may be marginal
(particularly with respect to individuals with disabilities and
protected veterans)
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 22
Preparing for the Onsite
• Estimate where glass “ceilings” or “walls” may exist
in your organization
– Drop off in women/minority representation by level
(ceilings) or by division, function or business unit
(walls)
– These may be areas where OFCCP auditors focus their
attention
• Develop an understanding of how individuals are
selected and developed for mid- and senior-level
management positions
– Recruitment and hiring practices
• External selections and internal promotions
– Performance appraisals and performance management
systems
• Review processes, documentation, indicators of adverse
impact in ratings
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 23
Preparing for the Onsite
• Develop an understanding of how individuals are
selected and developed for mid- and senior-level
management positions (cont’d)
– Formal human resource development systems
• Succession planning; mentoring; management
development programs; etc.
– Informal human resource development practices
• Special assignments; training; task force
participation
– Turnover and retention
• Are women and minorities leaving at unexpected
rates? Why?
• Evaluate female and minority participation rates
in these programs
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 24
Preparing for the Onsite
• Marshall voluntary efforts beyond technical compliance
(“good stories”)
– Want to demonstrate that mere compliance with regulations
not sufficient; additional voluntary efforts necessary to
accomplish company objectives
– Examples include:
• Development forums (with open participation)
• Employee engagement surveys
• College relations programs
– Secondary and college level partnerships
– Scholarships and grants (to individuals and organizations)
– School career initiatives
– Best if related to developing needed skills of current or
future workforce (not simply “nice to do” initiatives
unrelated to employment)
– Create “halo” effect
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 25
Preparing for the Onsite
• Based on investigation develop “themes”
for the audit
– Examples:
• CEO has demonstrated a firm personal
commitment to AA/EEO
• Company has developed and continues to
improve HR programs that will ensure employee
and company interests are aligned:
– Recruitment, outreach and selection…
– Employee development…
• Company has established a network of
partnerships with veteran and disability referral
organizations
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 26
Preparing for the Onsite
• Themes should highlight strengths and
indicate problem areas being addressed
• Themes serve as tool for ensuring that all
presentations, interviews, and
interactions with OFCCP convey a
consistent message
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 27
Managing the Onsite
Investigation
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 28
Managing the Onsite
Investigation
• Brief senior management
– Status of audit
• Onsite schedule and logistics
• OFCCP concerns and proposed responses
• Company concerns and proposed responses
• Company plan for managing onsite
– Opening and closing conferences
– Individuals to be interviewed
– Witness preparation (management and nonmanagement)
– Role to be played by senior management
– Plans for preparing managers assigned a role
in the audit
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 29
Managing the Onsite
Investigation
• Preparing for the Opening Conference
– Not consistently scheduled any more
– Regional Directors now more likely to show up at
closing conference than opening conference
– Consider asking for one:
• An opportunity to “put best foot forward,” including
CEO personal commitment
• Can proactively address issues of likely concern to
OFCCP
• Can provide a helpful framework for remainder of
onsite
• Location of opening conference
– Comfortable, but not ostentatious
– A relaxed atmosphere advantageous
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 30
Managing the Onsite
Investigation
•
Attendees at opening conference
– CEO participation expected by OFCCP
– Other senior management depending upon issues to be discussed
– Persons who will be interfacing with OFCCP
– Demographics of company representatives matters
– All who attend should be conversant with basic OFCCP requirements and
terminology
•
Opening conference agenda
– Welcome by CEO
– Opening statement by OFCCP
– Company presentation on such items as:
• CEO vision for company and importance of AA/EEO to accomplishment of that
vision (avoid “diversity” trap)
• Company programs that address (or will address when fully implemented) areas
of weakness (e.g., low female or minority representation at senior levels)
• Good stories
– Agreement on onsite logistics
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 31
Managing the Onsite
Investigation
• Post opening conference management of onsite
no different for routine headquarters and CMCE
audits than for regular establishment audits
– Establishing with compliance officer standards for
access to employees and secure areas of facility
– Conducting tours
– Responding to requests for additional information
– Scheduling interviews
– Preparing management and non-management
witnesses for OFCCP interviews
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 32
Closeout Conference
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 33
Closeout Conference
• May be scheduled at conclusion of onsite or
following completion of offsite analysis
• Opportunity for OFCCP Regional Director to
present agency findings
• CEO expected to attend
• Regional Director may offer suggestions for how
the company can enhance commitment to
AA/EEO
• A time more for listening than for debating
(particularly if the company has been found in
compliance)
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 34
Wrap-Up and Questions
[email protected]
[email protected]
© 2012 Equal Employment Advisory Council
2012 ILG National Conference | August 28, 2012 | Page 35
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