April 9, 2008
Louisiana Liaison Group Meeting
Four Points Sheraton Hotel – Metairie, LA
Presenter: Mickey Silberman – Partner Jackson Lewis LLC (Denver, CO)
Welcome: Julia Fuentes (President-LLG)
Introductions: Valerie Vickers (LLG Board Member and NILG Chair, NILG
Constituency Information Committee
General LLG Business:
 Meetings for 2008
o July 9th – New Orleans-Zea’s Restaurant – OFCCP
Developments
 We will be collecting school supplies as well as new
books appropriate for second graders to give to two
worthy causes
o November 19th – Baton Rouge
 Survey will go out this week to obtain your feedback on
today’s meeting as well as to obtain suggestions on
topics for the November 19th meeting
 National Industry Liaison Group conference
http://www.pacificilg.org/ July 29-August 1st - Anaheim, CA
 Visit our website http://www.region6ilgs.org/swarm/llg/
 Membership Dues - $25.00; Join today in order to take advantage of
benefits such as
o Membership certificate
o Access to quarterly newsletters
o Access to minutes and handouts from quarterly meetings
o Ability to run for office/board member positions
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 We are giving out two $2500 scholarships again this year. If
someone is interested in the program, contact Lynne Broussard, LLG
VP, for more information. Scholarships are awarded due to financial
necessity, GPA (or ACT/SAT for high school seniors) and character.
Meeting highlights:
OFCCP is looking to find hidden barriers in discrimination whereas the EEOC is
reactive and claim driven.
For every female that has a sex harassment claim, it was found that 6 females feel
they have been harassed.
The OFCCP has been looking at pre-employment testing. There are times when
employers cannot defend the reason why they are using a particular test that has
caused disparate impact against a protected group. Disparate impact is an
unintentional negative impact against a group.
Systemic discrimination is found if a test has adverse impact against minorities or
females. Intent to cause an adverse impact is not required. However, if the test
is found to be predictive of job performance, then a company may be allowed to
continue to use that test (e.g. typing test for a Secretary position).
When a contractor completed the statistical and narrative portion of their
affirmative action plan, this should be viewed as the beginning process meant to
identify issues and address them.
Many audits this year will be “Contracts First” audits. “Contracts First” is a system
OFCCP has put into place to obtain information on all companies receiving
government contracts and subcontracts. They will use this method of securing
procurement information instead of relying on companies to correctly check off
the box on the EEO-1 report which asks if the company has federal contracts or
subcontracts. This way, many companies that were never audited might soon
find that they are on the OFCCP’s audit list. Many companies that have never
been audited before and large contractors are expected to be selected for
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reviews. 1/3 of non-FAAP (functional affirmative action plans) audits this year will
target contractors identified thru “Contracts First” initiative. Expect more FAAP
audits this year than in the past. The OFCCP projects there will be 7000 audits in
2008.
The EEO-1 reports will be phased out within the next 3-5 years as a selection tool
for selecting contractors for audits.
What is the definition of a subcontractor? A company that sells goods or services
to a government contractor or subcontractor that is necessary in whole or part in
fulfilling the government contract. (simply by doing business with a federal
government contractor would not automatically cause a company to be
considered a federal subcontractor for purposes of affirmative action obligations).
There is a renewed focus on good-faith efforts for disabled and veterans as well
as ensuring that contractors are positing job openings with job service. There is
also a focus on adverse impact.
The OFCCP is now checking for Beck compliance. When a contractor submits the
11 items for a compliance review, if they submit collective bargaining agreement
information (evidence of a union), this can trigger an OFCCP on-site review. Note
that at-will-states (such as Louisiana) do not need to post the Beck Order posting.
America’s Job Bank ceased operations in July 2007. Contractors are now required
to post job openings in states where there are job openings.
The “tipping point test” has changed in the middle of 2007 in determining
potential issues of pay inequities. The OFCCP came out with a new formula to
determine this. Contractors are required to do annual compensation analysis to
ensure females and minorities are paid equally. Item #11 in the OFCCP scheduling
letter requires that compensation information be submitted.
Up until recently, the OFCCP would analyze compensation data in whatever
manner it was submitted by a contractor. Mickey recommends that
compensation information always be submitted by job title. The OFCCP is using a
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3 tier approach in their salary review. If there is a red flag in Step 1 (30-10-3
analysis), they will perform a cluster regression analysis. If that analysis sends up
a red flag, they will do a full blown multiple regression analysis.
Step 1 of 30-10-3: Take the average pay of females and compare to average pay
of males (do the same for minorities vs. non-minorities); If the average pay
differs at least 5% (formerly it was 2%) between gender or race groups within the
same pay division and these differences negatively affect at least 30 females or
minorities, move on to Step 2
Step 2: If the number of females or minorities that fall into the negatively
affected pay divisions makes up at least 10% (formerly 30%) of the ENTIRE
workforce for that gender or racial group, move on to Step 3 (example, 60
females out of 300 females negatively impacted (20%))
Step 3: The percentage of the female or minority workforce in the affected pay
divisions is at least three times as large as the percentage of males or nonminorities in pay divisions where the males or non-minorities are negatively
affected.
If the contractor passes the 30-10-3 test, the OFCCP is likely not to investigate
further.
Note that the OFCCP is focusing on groups negatively impacted that consist of at
least 30 females or 30 minorities. They are NOT focusing on smaller groups
impacted. However, the EEOC could certainly build a case if even just 1 person
was negatively impacted by inequitable pay practices.
Question asked: Is it safe to state that small companies (less than 100) in a male
dominated industry will probably never have an issue with pay disparity against
females? This is more than likely the case due to the small numbers of females
within the workforce. Although the OFCCP offices received directive to all use 3010-3 test, they are allowed to use another test if they have a compelling reason to
do so. Therefore in the case of small number of females in the workforce, they
might decide to use a different test.
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Mickey recommends that information be submitted by job title even if the
contractor uses salary grades or bands. The OFCCP, however, might argue that
they cannot do a significant statistical analysis because of the number of people in
each job title is low. A contractor can be asked to put together comparable titles
(similarly situated) in order to have a large enough group to perform an analysis.
OFCCP is now looking at conducting pay analysis by Job Group. It is
recommended that contractors do the analysis in advance by Job Group to see
what results the OFCCP will come up with but not to turn in the information to
the OFCCP by Job Group since this is typically not representative of SSEG and have
the same pay. If you submit information up front by Job Group, you might have a
tough time later on defending your company against not using Job Group as a
reasonable means of conducting this pay analysis. However, if you submit by job
title up front and then are asked to submit information by Job Group, you can
submit that information requested by the OFCCP by Job Group but attach a letter
stating something to the effect “we are submitting this information to the OFCCP
in the spirit of cooperation. However, “Company” feels that it is inappropriate to
conduct a pay analysis by Job Group and would like the opportunity to discuss
further.”
If a company does not pass the 30-10-3 test, the OFCCP will ask for the following
information for employees in order to run a regression analysis.
Regression analysis is a mathematical model that looks at factors that affect pay.
1)
2)
3)
4)
5)
6)
Employee ID number
Gender
Race
Date of hire
Date in position
Date of birth
7)
8)
9)
10)
11)
12)
Current Salary
Part-time/Full-time Status
Exempt/non-exempt Status
Job Title
Salary grade or band level
Employee Location
Date of birth is a proxy for years of experience.
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If your company considers other factors in determining a person’s pay, you can
submit that information as well at the same time you submit the above 12 items.
Question: In the case of a merger or acquisition, do you use the original hire date
from the prior company or date of acquisition/merger? If the company carries
over the pay from the former company, it should try to capture the original hire
date. If it cannot capture that information, then they should explain that to the
OFCCP.
Question: Which date should a contractor use when submitting #11 for the desk
audit; information as of the date of the plan or current compensation
information? Prefer to give current information on the workforce especially if
salary adjustments were made after the plan date.
Question: How to you handle giving an appropriate starting pay especially when
it has been argued that men are better negotiators of starting pay then women?
It is fine to pay whatever it takes to get the talented applicant to come work for
your company. It is not an employer’s obligation to settle previous pay
discrimination. An employer typically would pay someone more than he/she is
currently being paid. However, an issue can occur if a company offers pay
increases that are in percentage form tied into their performance. So for
example, if a person is rated as a 1 that might mean that the person will get a 1%
raise. If that persons scores a 5 that might mean that the person will get a 5%
raise. The issue then over the long run is that because the increase is based on a
percentage basis tied directly to performance, over the long run the gap in pay for
the female that started out at $40,000 and the male that started out at $44,000 is
much more than 10% difference. A company in this case should have the HR
group, compliance group/legal group set aside money in an equity pool to bring
up the pay for females/minorities in order to be more equitable.
If in the above situation the OFCCP audits the company and find pay disparity, the
company can argue that they have a plan put in place to correct this issue over
time.
The OFCCP is also focusing on reviewing whether or not unionized contractors
have the Beck Order Poster appropriately posted. According to this law, union
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workers have the right to ask the union to break down for them where the union
dues are going towards (e.g. political causes vs. direct benefits for the union
workers.) The union employee only has to pay that amount directly impacting the
employee.
OFCCP received a directive that if they receive information for the desk audit
stage of a review and they get documentation that the site has a collective
bargaining agreement (proof of union), they will conduct an on-site review.
Employers have an obligation to post the Beck Order poster unless they are in a
right-to-work state (such as Louisiana). Most states are NOT right-to-work states.
However, even if you are in a right-to-work state, you must put the Beck Order
reference on purchase orders/contracts in case you are doing business with a
vendor which resides in another state.
The above information was obtained thru http://www.nrtw.org/rtws.htm
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While on-site reviewing the Beck Order posting, the OFCCP will also check to see if
the EEO policy statement is posted as well as the invitation for veterans and
disabled to self-identify. The OFCCP is also inspecting the facility for accessibility
to applicants and employees who are disabled. You do NOT have to make a
facility ADA accessible unless a request has been made for an accommodation.
The OFCCP is also reviewing good-faith efforts to recruit veterans and disabled.
They are also checking I-9s.
When referring to good-faith efforts, a contractor must 1) make good-faith
efforts; 2) prove that they made good-faith efforts thru proper documentation.
VEVRAA requires that employers post job openings with their state employment
office (job service) for EVERY opening unless it is senior management (not defined
by OFCCP-left up to the employer), a job lasting 3 or fewer days and a job filled
internally. The OFCCP could ask to see a listing of all hires that are not senior
management and ask for proof that each opening was posted with job service.
Note that if using a vendor to post these positions for you, the employer is still
responsible to ensure that they have a record showing when all the jobs were
actually posted with job service. Some vendors are having a difficult time
producing that evidence.
Two red flags can be raised when reviewing applicant data integrity:
1. Low applicant to hire ratios: are you tracking all applicants?
2. High percentage of unknowns: are you inviting all applicants to self-identify
Ratios should typically be at least 3:1 for applicants in order not to raise a red flag
(ex. 30 hires out of 90 applicants).
As of April 2004 OFCCP issued a directive NOT to guess applicant gender or race
when the applicant does not want to self-identify. However, if the applicant
comes in for an interview, you can visually guess at least the person’s gender.
In years past, the OFCCP used the 80% test (4/5s rule) to determine whether
there was adverse impact in selection decisions. Now they are using two
standard deviations test. Note that it is possible to pass the 80% test and still
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have two standard deviations. In this case, the OFCCP will go after you even
though you passed the 80% test.
When preparing a Hire analysis, you should NOT count internal applicants. When
you run a Promotion analysis, you should NOT count external applicants.
However, if you want to run a total placement analysis, then you can count
internal and external applicants but then you would compare against hires and
promotions/transfers.
According to the Uniform Guidelines on Employee Selection Procedures adverse
impact analysis should be conducted by job title. Nowhere does it make mention
of “Job Group”. Job group is an OFCCP-only term. If you have adverse impact by
job group, you should run the analysis by job title to determine if adverse impact
exists at that level.
Also, if you have adverse impact, you should perform an analysis of each step of
the employment process to see where the adverse impact occurred. Example, do
an analysis of all applicants and compare to those that passed the 1st step of the
applicant process (phone screen, interview, etc.); then compare those that passed
the 1st step of the process against those that passed the second step (2nd
interview, test, etc.), then compare those that passed the 2nd step against those
that passed the 3rd step (final interview, drug test, etc.).
If you determine that any of these steps produced adverse impact, check to see if
the step has been validated. If the step has been validated, check to see when it
was validated and if the job requirements have changed at all since the test was
validated. Example, a position might have required a person to manually log in
bookkeeping information and be able to perform mathematical calculations.
Therefore, a Math test was administered. However, in the past couple of years
the company did away with this manual process and purchased software that
automatically calculates these figures for you. The employee only needs to enter
the data into the spreadsheet.
Conclusion: Thanks given to meeting sponsors: Peopleclick and BlueCross and
BlueShield of Louisiana; Cheryl Hauver (New Orleans OFCCP) and Aida Collins
(Houston OFCCP) were introduced to the group and all were invited to visit the
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LLG website for information regarding upcoming, free seminars at the New
Orleans OFCCP office.
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