Affirmative Action: More perspective on OFCCP’s new compensation analysis

Presentations by the Office of Federal Contract Compliance Programs (OFCCP) have shed more light on its new compensation directive. As we reported in on our Employment Law Blog on 3/14/13, the agency has given itself total flexibility in grouping jobs into “pay analysis groups” for “comparable” employees. The new process applies to affirmative action audits of federal contractors scheduled on or after February 28, 2013 (OFCCP Directive 307).

Interestingly, there is no longer any particular threshold for testing whether a difference in pay between comparable employees of different race/ethnicity or gender is suspicious. Any difference in compensation may result in the agency asking the employer to provide proof of the job-related reasons for the difference.

Under the OFCCP’s approach, an employee might fit into multiple “pay analysis groups” depending on how the OFCCP wants to analyze a particular aspect of pay. For example, a front-line supervisor in a production department might be grouped with all front-line supervisors in the production department; all front-line supervisors in the entire facility; all supervisors and managers in the facility; and all staff who are exempt from overtime.

Part of the agency’s analysis will include looking for departments or job groups where people are disproportionately represented by a particular race/ethnicity or gender. What they’re really examining is your decision-making process, asking how workers are selected to go into these departments or job groups.

Tips: The OFCCP has posted detailed FAQs, as well as the slides from its webinars on this subject, on its website. It will take some time for the agency to train all its compliance officers in the new procedures, but you should take steps now to review your reasoning and documentation in employee job placement as well as compensation. We don’t recommend trying to speculate on all the possible ways the agency could try to group your jobs. Instead, get a firm handle on what jobs logically should be compared. Also, be aware of what factors affect pay at your organization. The answer will likely be different for different types of jobs. As a general rule, you should be comparing jobs with the same job titles. The OFCCP may not initially agree, but if you marshal your arguments in a well-reasoned and documented approach, you will have a better chance of persuading them to your point of view. If you have questions, contact your Vigilant affirmative action representative.

This website presents general information in nontechnical language. This information is not legal advice. Before applying this information to a specific management decision, consult Vigilant or legal counsel.