Employment Law Blog

News, trends and analysis in employment law and HR

Jun 30, 2014

Electric company pays $1M to settle hiring discrimination claims

Affirmative ActionHiring 

Following a random audit by the Office of Federal Contract Compliance Programs (OFCCP), federal contractor Lincoln Electric agreed to pay $1 million in back wages to African American applicants it rejected for entry level positions.

Following a random audit by the Office of Federal Contract Compliance Programs (OFCCP), federal contractor Lincoln Electric agreed to pay $1 million in back wages to African American applicants it rejected for entry level positions. The money will be shared by a pool of 5,557 people who unsuccessfully applied for factory and production jobs. The company agreed to offer jobs to 48 of them as positions become available, and to revise its applicant testing and selection process. The OFCCP’s press release does not disclose the specific problems in the hiring process, but states that the company’s online and paper applications “created multiple barriers for African Americans.” It also indicates that the company used a test for applicants that resulted in adverse impact on the basis of race, and the test wasn’t properly validated as being job-related and consistent with business necessity.

Tips: Monitor your selection process to look for potential adverse impact in the hiring process on the basis of race or gender. The OFCCP is particularly suspicious of tests, so it’s important to be able to break down your data on your hiring process to determine whether individuals were disproportionately affected by the test in particular. If so, then you should either consider a different test, or take steps to ensure the test is validated—this may require contracting with an industrial psychologist or other expert. Or, a less expensive option is to use a test that actually replicates essential tasks performed on the job; the OFCCP is much less likely to question the validity of a test that measures the ability to perform actual tasks used on the job. Questions? Contact your Vigilant affirmative action representative.

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