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May 05, 2022

Federal contractors settle group hiring and pay claims with OFCCP

Affirmative ActionHiringWage and Hour 

The Office of Federal Contract Compliance Programs (OFCCP) recently secured three significant settlements from employers with federal contracts. The companies didn’t admit liability, but signed conciliation agreements after routine affirmative action audits uncovered disparities in hiring and compensation.

  • IQVIA Inc. agreed to pay $550,000 in back wages and interest to resolve allegations that it discriminated against 984 qualified female and Black applicants for positions as associate sales consultants at its Parsippany, New Jersey, facility. The company proactively addressed the hiring shortfall identified by the OFCCP by hiring 12 female and 6 Black applicants from the pool of individuals who were originally rejected. IQVIA provides biopharmaceutical development and commercial outsourcing services (press release 4/25/2022 and conciliation agreement 4/19/2022).
  • LinkedIn Corporation agreed to pay $1.8 million in lost wages and interest to a total of 686 female employees at its facilities in Sunnyvale and San Francisco, California. The settlement resolves allegations that the company underpaid women compared to men in its job groups containing engineering, “product,” and marketing positions (press release 5/3/2022 and conciliation agreement 4/27/2022).
  • Rockland Bakery Inc. agreed to pay $850,000 to resolve allegations that it discriminated against 151 female, Black, and Asian applicants for positions as cashiers, packers, and bakers at its facility in Nanuet, New York. OFCCP determined that the company’s reliance on word-of-mouth recruiting contributed to the hiring disparities. The company also agreed to offer jobs to 52 of the applicants. The company has a federal contract to provide baked goods to West Point Academy (press release 4/28/2022 and conciliation agreement 4/28/2022).

Tips: The “word-of-mouth” hiring case offers especially useful lessons. There’s nothing wrong with encouraging workers to refer family and friends they think would be a good fit with your company. If that’s your primary recruiting method, though, it will most likely result in an applicant pool that’s very similar to the race and gender makeup of your current workforce. Unless your current workforce approximately reflects the availability of qualified workers in the relevant recruiting area, that could pose a problem. Also, if you give preference to applicants referred by your employees, you may end up disproportionately hiring applicants of a certain race or gender, compared to their presence in your applicant pool.

As an employer with covered federal contracts, you should identify specific organizations that can help you find qualified candidates to meet your affirmative action outreach objectives. If you hold a federal contract worth at least $150,000, your state or local employment office is a mandatory recruitment source. OFCCP regulations require you to list all external job openings (with limited exceptions for executive and top management positions and for jobs lasting three days or less) with the employment office. The purpose of this mandatory listing is to improve your outreach to protected veterans. Need help identifying recruitment sources? If you use Vigilant to prepare your written AAP, your Vigilant affirmative action representative can help you explore ideas.

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