Transcript
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
OFCCP Audits
5 Reasons They Fail
Grace ContiDirector, Affirmative Action Compliance,Portnoy, Messinger, Pearl & Associates
Gary CowanDirector of Compliance, America's Job Exchange
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
PMP Presenter
Grace M. Conti Executive VP & Director, Affirmative Action Compliance Departmentgconti@pmpHR.comMs. Conti has been with Portnoy, Messinger, Pearl & Associates, Inc.(“PMP”) since 1993. Ms. Conti holds a degree in Human Resources/Labor Relations from the State University of New York and has also taken courses at Cornell University. She has been re-elected three times as Co-Chair of the Long Island ILG. Ms. Conti is perhaps best known for her expertise in Affirmative Action rules and regulations. Often called the “Affirmative Action Guru” by her clients, she is proud of her exceptional record of successfully closed OFCCP audits. Grace has developed comprehensive programs tailored specifically for those companies which have or are seeking Federal government contracts. Ms. Conti regularly holds training workshops throughout the country on the various affirmative action compliance matters. Her clients come from a variety of industries including aircraft, communications, manufacturing, hospitality and various other industries.
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
The confidential materials contained in this training seminar were prepared by:
Portnoy, Messinger, Pearl & Associates, Inc.
as reference for the attendees. Comments offered during this seminar may be affected as regulations develop. The materials represent the speaker’s views and are not to be considered legal advice. These copyrighted materials may not be reproduced, copied or used without prior permission from PMP.
Disclaimer
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Current Leadership
The coming election will result in a change ofleadership at the OFCCP – how quickly after the
election that will happen is uncertain.
“We are going to be extremely proactive and aggressive. The message is it's a new day at the Department of Laborand it's a new day at the OFCCP" Feb. 16, 2010
“For the first time in more than 45 years, the Equal Employment Opportunity Commission, the Department of Justice and the
Department of Labor are working to build a true partnership.”Keynote speech NILG 2011
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
How Are Contractors Selected for a
Compliance Review (aka audit)?
Q: How does OFCCP select a federal contractor’s establishment for a compliance evaluation?
A: OFCCP's Federal Contractor Selection System (FCSS) is aneutral selection system that identifies federal contractorestablishments for compliance evaluations. The FCSS processuses multiple information sources such as federal acquisitionand procurement databases, EEO-1 employer informationreports, Dun & Bradstreet data, Census data, as well asstatistical thresholds such as industry type and employeecounts of federal contractor establishments.
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Types of Audits
Desk Audit
• Submission of AAPs and supporting documents to the OFCCP based on Scheduling Letter’s itemized Listing
• May include further data requests and telephone calls to clarify data submitted
On-site Audit
• Conducted at the contractor’s facility
• Inspection of company’s employment practices, documents
• Involves interviews of management and current employees
• Can involve telephone interviews with applicants or former employees
• Usually 1-3 day process
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Revised OFCCP LetterRevised on: October 15, 2014 | Extended to: June 30, 2019
Section 503(new regulations/outreach)
VEVRAA(new regulations/outreach)
Job Descriptions
Compensation, performance reviews, pay
increases, bonus payments,how overtime is assigned
Itemized listing of items to be submitted increased from 11 items to 22 items
Added Focus On:
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Litigation and penalties
Risks of Non-Compliance
Class Action lawsuits
Negative press for company
Suspension, cancellation, termination of current contracts and debarment from future contracts
Risk of additional charges brought bycurrent and former employees
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
OFCCP Regulations
Effective 3/24/2014
VEVRAAProtected Veterans
A hiring benchmark of 6.9%**for protected veterans
(based upon national percentage of veterans in the workforce)
NOTE: Small applicant pools have a negative impact on reaching 6.9%
**Updated benchmark is effective 03/04/16
Section 503Individual with Disability (IWD)
Survey workforce and analyze your progress toward utilization goal of IWD
at the beginning of each plan year
7% utilization goal per job group if more than 100 employees
Fewer than 100 employees: 7% goal applies to the entire workforce
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
VEVRAA and Section 503
Data Collection Requirements/Reporting
Applicants vs Hires comparisons:• Total # of job openings and # of jobs filled
• Total # of “applicants” for all job groups
• Total # of applicants who self-identify
• Total # of applicants hired
• Total # of protected veterans and IWD hired
All data must be maintained for 3 years
It is the contractors responsibility
(even when using an outside agency)
to have this data for all new hires
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Updated Sex Discrimination Guidelines
Family and/or medical leave may not be denied or provided differently on the basis of gender
Effective August 15, 2016, regulations updatedanti-discrimination guidance for:
• pregnancy • childbirth• related medical conditions• gender identity• transgender • sex stereotyping (restricting job classifications on the basis of sex)
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Executive Order #13658 – Established minimum wage effective1/1/2015 of $10.10; as of 1/1/2016 = $10.15 (applies to Davis-Bacon Act,
Service Contract Act and certain concession type contractors)
Executive Orders for Federal Contractors
Executive Order #13672 – added “sexual orientation” and “gender identity” to the list of protected categories. All EEO statements in policies, new or modified contracts and
subcontracts, purchase orders, AAPs, etc. Effective 4/8/2015
PENDING: Executive Order #13706 – Paid Sick Leave may become effective 1/1/2017(for Davis-Bacon Act, Service Contract Act, certain concession type contractors)
Executive Order #13665 – for contracts greater than $10K entered into or modified on or after 1/11/2016 - Prohibition Against Pay Secrecy Policies and Retaliation. Mandated language on
Careers website, intranet, bulletin boards, update all EEO statements in policies, etc.
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Executive Order #13673
Fair Pay & Safe Workplace
Effective 10/25/2016 – Contractors bidding on government contracts of $50million or more must report any non-compliance violations (14 workplace
laws) received within one year prior to the start of the contract bid
For contractors with bids under $50million,no disclosure is required until 4/25/2017
For subcontractors – Effective 10/25/2017 - report violations to DOLand report to primes on DOL findings
Reporting period will be phased in 1 year at a timeto 3-year look back by 10/25/2018
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Paycheck Transparency: Employees working on the contract or subcontract must be provided with wage statements showing hours
worked, overtime hours (broken down on a work week basis), rate of pay, gross pay, itemized deductions from gross pay
Effective 1/1/2017: contractors and subcontractors must provide independent contractors a document informing them of this
relationship, where applicable
Executive Order #13673
Pay Transparency
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Review Data on a Regular Basis
Applicant flow
New Hires Terminations
PromotionsProgress to
GoalsJob
Descriptions
Effectiveness of Outreach
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Applicant Pool vs. Hires
Promotions Terminations
OFCCP and Adverse Impact
2-Standard DeviationOFCCP’s current “analysis of choice”
Used to Analyze
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Job Posting and Outreach Responsibility
You must prove that every job (with a few exceptions) was listed with the appropriate ESDS (Employment Service Delivery System)
where the job is located
You must be able to prove that you have a “relationship” with local organizations that assist veterans and IWD in their job search (in your RRA)
If these organizations are not successful in providing qualified applicants, it’s your responsibility to seek other organizations
Depending on company goals, additional outreach to female andminority organizations should be included
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Why Do an Analysis?
41 CFR 60-271(b)(3) currently requires contractors to perform in-depth analysesthat include an analysis of their compensation system(s) to determine
whether there are gender, race or ethnicity-based disparities
Directive 307 reinforces this (2/28/2013)
Pay Gap - heightened focus of OFCCP and EEOC
Pending EEO-1 revised reporting requirements
Do it before the OFCCP letter arrives!
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Do It!
Minimizes the risk of possible
plaintiffs’ claims under the Lilly Ledbetter Fair Pay Act, other
equal pay regulations and scrutiny during OFCCP audits
Assists your company in discovering
whether hiring and retention issues may be
related to compensation
Assure that you policies address starting salary,
merit increases, bonuses,
overtime – and that these are
applied consistently
Comprehensive analysis should be conducted
under as much attorney/client
privilege as allowable by law
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Where a wage difference may exist: can your records defend and prove that the difference is based on genuine business
reasons, related to job requirements and characteristics,and is not based on gender, race, ethnicity, etc.?
Wage Difference
Go beyond the market survey data: drill down andreview employees in similar job titles or
within groups of employees doing similar work
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Compensation Information Request#19 on Audit Letter
Employee ID# Gender Race/Ethnicity Date of Hire
Date of last change in grade, job title
or position
Job Title &Job Group
Department F/T or P/T
Exempt or Non-Exempt
Salary Grade or Code
Base Salary orWage Rate
Hours worked (typical) week
Overtime Pay Bonus Pay Incentive Pay Shift Differential Pay
Commission(if applicable)
Merit Increase Location Annotate Union
(if applicable)
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Hiring team doesn’t know difference between “job seeker” and “applicant”
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
8/2016 – Colonial Parking pays $250k to settle allegations of pay discrimination. Allegeddiscrimination against black applicants and paying black parking valet attendants less thancomparable Hispanic employees
Recent OFCCP Cases
7/2016 – Div. of Norfolk Southern will pay $492K to African-American applicants due to allegedrace-based hiring discrimination in the laborer position
6/2016 – Aqualon (subsid. of Ashland) will pay $175K in alleged failure to provide 660 AfricanAmerican applicants for entry-level transition operator positions
7/2016 – Jennie-O-Turkey Inc. agreed to hire 53 women and will pay $491,861 in back wages to339 female job applicants for allegations of denied entry-level jobs
11/2015 – G&K Services, Inc. will pay more than $1.8-million for systemic hiring and paydiscrimination to 444 female employees steered to lower paying jobs
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Class Member Locator(a new OFCCP “tool” on their website)
Current or former employees can go to the websiteand look at the list of contractors who have beenaudited and charged with discrimination and add
themselves to the pending class action lawsuit
OFCCP Member Locator
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
“Internet Applicant”
The contractor considers the individual for employment in a particular position
The individual’s expression of interest indicates the individual possesses the basic qualifications for the position; and,
The individual at no point in the contractor’s selection process prior to receiving an offer of employment from the contractor, removes himself or herself from further consideration or otherwise indicates that he or she is no longer interested in the position.
The individual submits an expression of interest in employment through the Internet or related electronic data technologies
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Application Flow Data
• A non-discriminatory data management technique can control the number of job seekers you review for each position
• Your applicant flow charts must show all applicants that were considered for the open position…whether they were interviewed or not
• You must show a (defendable) reason for rejection of every applicant
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
A contractor is presumed non-compliant unless it can prove, by its record-keeping, that it is in compliance.
Important!
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Personnel Decisions
Records should prove non-discriminatory reasons for selection of:
Applicants Interview
HirePromotions
TerminationsBonuses,
% increases, overtime
↓
↓
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Importance of Training
One of the best investments a company can make is to train their recruiters, hiring managers and HR staff on:
OFCCP regulations and requirements
How to properly review and dispose of applicants
How to write good, defendable records to supportall personnel decisions and selections
Interviewing skills and questions they can and cannot ask
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Portnoy, Messinger, Pearl & Associates, Inc. (PMP)
“Educate don’t Litigate”
PMP is proud to be celebrating its 52nd year of providing clients with practical guidance on all aspects of the employer/employee relationship. PMP is a unique HR outsourcing firm. Our staff consists of both HR subject matter experts and labor attorneys. This combination of HR Professionals and staff labor attorneys helps clients navigate through the maze of regulations and laws governing the workplace in a very cost effective way.
PMP provides services to a broad spectrum of clients in both the public and private sector, union and non-union, including small local businesses and multinational Fortune 500 companies.
Follow PMP on social media and sign up to receive our free monthly HR Update electronic newsletter by visiting us at: http://www.pmphr.com/contact-us.html
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
America’s Job Exchange has been a pioneer in online recruitment and compliance from the very beginning, having evolved from America’s Job Bank which was
founded by the Department of Labor in 1995. We keep true to the original mission of America’s Job Bank assisting Federal Contractors meet OFCCP regulations for
online job postings and distribution.
OUR MISSION
We believe that a diverse workforce is beneficial to every company and its employees. Our mission is to provide the best tools, resources and
information to connect employers and diverse job seekers.
About America’s Job Exchange
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
We Support Our Customers
AJE’s OFCCP Audit Team is led by Gary Cowan, 25+ years with the Department of Labor
as an auditor, trainer and director
Beginning to end audit support:
• Coordinate with OFCCP auditors, attorneys and AAP providers
• All audit requests are responded to within one business day
Audit reports include:
• Job Summary Reports (PDF and excel)
• Job Summary Distribution Reports
• Individual Job Reports
• Outreach Reports
• AAP Summary Reports
Individual Reports include:
• Copies of every mail sent to One Stop Career Centers and CBOs
• State website posting verification number for every job
• Screenshots of jobs posted to diversity partner websites
Summary Reports include:
• Complete distribution summary
• Links to individual reports
• List of all organizations that receive jobs
All reports and records are retained indefinitely.
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Grace M. ContiExecutive VP & Director,Affirmative Action Compliance Department
gconti@pmpHR.comwww.pmphr.com
Contact Information
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Gary CowanDirector of Compliance, America's Job Exchange
gcowan@americasjobexchange.com(o) 978-946-7928(c) 617-997-6477www.americasjobexchange.com
Contact Information
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
Our Webinars Have Gone Monthly
AAP’s are fixed documents with standards and requirements. Contractors are challenged with the many steps involved in executing these plans. We can help you manage the steps involved!
How to Properly Implement aCompleted Affirmative Action Plan
Chris LindholmVice President of Compliance
OutSolve
Presenters
Tune into our next webinar to find out how managers can remove the gray areas implementing Affirmative Action Plans.
October 18, 2016 1:00-2:00pm ET
Jeremy MancheskiPrincipal and Founder
OutSolve
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
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WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
OFCCP Audits5 Reasons They Fail
September 20, 2016
Speakers:
Gary CowanCompliance Director
America's Job Exchange
Grace ContiPortnoy, Messinger, Pearl &
Associates, Inc.
Copyright, 2016
America’s Job Exchange is recognized by SHRM to offer Professional Development Credits (PDCs) for the SHRM-CP(SM) or SHRM-SCP(SM) . This program is valid for 1 PDC (Activity ID: 16-J0RIK) for the SHRM-CP(SM) or SHRM-SCP(SM) . For more information about certification or recertification, please visit www.shrmcertification.org.
WEBINAR – OFCCP Audits - 5 Reasons Why They Fail
OFCCP Audits5 Reasons They Fail
September 20, 2016
Speakers:
Gary CowanCompliance Director
America's Job Exchange
Grace ContiPortnoy, Messinger, Pearl &
Associates, Inc.
Copyright, 2016
This program, Activity ID: 293641, has been approved for 1.0 (General)recertification credit hours toward PHR, SPHR and GPHR recertificationthrough the Human Resource Certification Institute (HRCI). Please be sure tonote the program ID number on your recertification application form. For moreinformation about certification or recertification, please visit the HRCertification Institute website at www.hrci.org.
The use of this seal is not an endorsement by the HR Certification Institute of the quality of the program. It means thatthis program has met the HR Certification Institute’s criteria to be pre-approved for recertification credit.
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