Friday, December 21, 2012

PAY EQUITY VOLUNTARY COMPLIANCE & MONITORING TIPS FROM OFCCP SENIOR STAFF

by Yevonessa Hall, Amanda Shapiro, Joanna Colosimo, Eric Dunleavy and David Morgan, DCI Consulting Group

On Nov. 15, 2012, OFCCP’s Senior Program Advisor Pam Coukos and Mid-Atlantic Regional Director Michele Hodge presented at the Washington Metro Industry Liaison Group (WMILG) meeting. Baltimore District Director Tom Wells and Arlington Area Director Andrew Ransome were also in attendance. The presentation focused on pay equity enforcement, and included both broader philosophical considerations and narrower practical and audit-focused guidance.

As expected, many in attendance were interested in the fate of proposed regulations now that the election is over. Unfortunately, , there were no post-election updates regarding any proposed regulatory changes, including the proposed rescission of the Standards and Guidelines or other compensation-related initiatives. However, Pam Coukos advised the group that closing the pay gap is still a major priority at OFCCP.

Ms. Coukos kicked off the discussion by stressing the importance of voluntary compliance and monitoring, and emphasized that it should be conducted prior to an audit. She noted three reasons why federal contractors should implement this practice in their organizations:
  • It’s the right thing to do. Contractors should review their compensation practices because they should want to be aware of potential inequities. 
  • It helps when the OFCCP “knocks on the door” for a compliance evaluation. 
  • Even if the OFCCP isn’t looking, other people are. Employees have more tools than ever to assess their situation and they are sharing more amongst each other. 
Ms. Coukos noted that contractors can and should accept the technical assistance that the OFCCP provides. Although OFCCP cannot be “consultants” once a compliance evaluation has started, contractors can seek assistance up to 15 days before the evaluation commences. Coukos further explained how to best achieve voluntary compliance and monitoring:
  • Read and follow regulations as they relate to compensation. Implement an in-depth annual analysis, look at race and gender specifically, and turn results into an action plan
  • Follow your own business practices. Is the process on paper the same as what people are actually doing? 
  • Don’t use an Equal Pay Act yardstick. OFCCP enforces Title VII, not the Equal Pay Act, and Title VII requires a higher threshold for identifying pay disparities. 
This advice was particularly interesting, because in recent years we have noted that the vast majority of pay equity settlements have read more like individual Equal Pay Act violations than systemic discrimination Title VII violations.

Ms. Coukos advised attendees to look not just at the job title level when conducting compensation analyses, but to also consider larger groupings such as SSEGs, EEO-1 categories, and even AAP job groups. Additionally, Coukos recommended considering the larger company structure too—“don’t just look at the establishment.” Interestingly, she noted that in some cases a proactive analysis may be different from what is required under the OFCCP standards for enforcement purposes.

Regional Director Michele Hodge complemented the discussion by sharing her field experiences and insights regarding why voluntary compliance is important. She noted that, during a compliance evaluation, OFCCP often receives data that changes multiple times. She recommended that contractors have processes in place to proactively monitor and analyze the data. She advised that this would help those that are “at the table” during a compliance evaluation and noted that contractors should include all knowledgeable parties (e.g., HR, compensation, IT, etc.) in the conversation. Ms. Hodge also reminded everyone that the Arlington, VA office is open and in full operation.

Readers of this blog should expect OFCCP to continue to prioritize the investigation of pay equity. At this stage federal contractors remain in a state of ambiguity; the possibility of new compensation standards and a pay survey tool seem more likely post-election, yet at the same time the 2006 Interpretive Standards are still the legal standards that OFCCP is bound by for enforcement purposes. Until the situation changes we suggest that federal contractors continue to monitor these issues and conduct proactive analyses according to the 2006 Standards.

1 comment:

Stan said...

And we still come down to the fact that, when all factors affecting pay are considered, the "pay gap" is around 6 to 6.6 cents. Is this trip really necessary?