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Dec 01, 2022

OFCCP kicks off 2023 fiscal year with settlements

Affirmative ActionHarassment & DiscriminationHiringTermination & ResignationWage and Hour 

The Office of Federal Contract Compliance Programs (OFCCP) recently announced the following financial settlements with federal contractors, as the result of routine affirmative action audits. These are the first settlements to be announced during the agency’s 2023 fiscal year, which began on October 1, 2022. In each case, the company signed a conciliation agreement with the agency but did not admit liability.

Bank of New York Mellon Corporation agreed to pay $1.925 million to resolve pay discrimination allegations at its facility in Jersey City, New Jersey, based on gender and race/ethnicity. The OFCCP determined that 120 female workers in investment services technology positions were underpaid compared to their male counterparts. The agency also determined that 47 Black and 26 Hispanic workers in the company’s technology services group were paid less than their Asian counterparts. The company agreed to update its compensation system and to conduct regular compensation analyses (press release 11/21/22 and conciliation agreement signed 11/21/22).

Cooper Health System agreed to pay $625,000 to resolve claims of discrimination in both hiring and compensation at its teaching hospital and biomedical research facility in Camden, New Jersey. The OFCCP alleged that the company discriminated against 64 female, Black, and Hispanic applicants for nurse associate PRN positions. The OFCCP also alleged that the company discriminated against 337 female employees in supervisory, nursing, and clerical positions by paying them less than comparable male employees. The company agreed to discontinue use of the test it was using to select nurse associate PRNs and to revamp its hiring process (press release 11/21/22 and conciliation agreement signed 11/21/22).

Hospitality International agreed to pay $100,000 to compensate an employee it allegedly terminated for inquiring about their compensation. The company also agreed to update its policies and train all its employees on their pay transparency rights under Executive Order 11246, i.e., their rights to inquire about, discuss, or disclose their own pay or the pay of other employees or applicants (conciliation agreement signed 10/4/22).

LAZ Parking California LLC, agreed to pay $320,000 to resolve allegations of hiring discrimination at facilities in Los Angeles, Orange County, Riverside, and San Diego, California. The OFCCP alleged that the company discriminated against a total of 678 applicants (Black and/or female) on the basis of race and/or gender for valet, shuttle driver, and customer service representative positions. The company also agreed to extend job offers to 49 of the affected applicants as opportunities become available (press release 11/14/22 and conciliation agreement signed 11/8/22).

Tips: The OFCCP doesn’t receive many individual complaints, so the $100,000 award to the employee allegedly fired for inquiring about their pay was unusual, but it illustrates how expensive it can be to terminate a worker for exercising a protected right. There is a limited exception to this right, which generally obligates employees who have access to coworkers’ pay data as part of their essential job responsibilities to keep that information confidential. Companies with federal contracts or subcontracts worth $10,000 or more must display a pay transparency poster and incorporate the title and accompanying paragraph in employee handbooks. You may use the OFCCP’s sample poster (available here), but we suggest instead putting the required paragraph on company letterhead; you have no obligation to include the OFCCP’s contact information, which is on their sample poster.

Federal contractors aren’t the only companies subject to pay transparency restrictions. All employers in California, Oregon, and Washington are prohibited by state law from taking adverse action against workers who ask about or share pay information. If your employee handbook contains language stating that employees are obligated to keep their compensation confidential, ask your Vigilant Law Group employment attorney for advice on bringing it in line with any appliable law.

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.

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