OFCCP rushes to extract settlements at close of FY 2021

The Office of Federal Contract Compliance Programs (OFCCP) raced to secure financial settlements from federal contractors at the close of the agency’s 2021 fiscal year, which ended on September 30, 2021. After conducting routine affirmative action audits of selected companies, the OFCCP alleged discriminatory practices in compensation and hiring. Each of the companies below agreed to sign conciliation agreements to settle the allegations, but didn’t admit liability.

• Aecom Management Services agreed to pay $205,000 in back wages and interest to resolve allegations that it discriminated against 67 Black applicants for Aircraft Worker positions in Virginia Beach, Virginia (press release 10/6/2021 and conciliation agreement 9/30/2021).
   
• Allan Baker, Inc. (formerly Korrect Optical) in Louisville, Kentucky, agreed to pay $227,636 in back pay and interest to resolve allegations that it discriminated against 401 Black applicants and 253 white applicants compared to similarly qualified Hispanic applicants for positions in the company’s Operatives job group (conciliation agreement 9/29/2021).
   
• Astra Zeneca agreed to pay $560,000 in back pay and interest to resolve allegations that its base salaries in Wilmington, Delaware, were discriminatory toward 23 Hispanic female employees in Primary Care Sales Representative Level 3 positions and 295 female employees in Specialty Care Sales Representative Level 4 positions (press release 10/4/2021 and conciliation agreement 9/30/2021).
   
• HM Health Solutions, Inc. a subsidiary of Highmark Health, agreed to pay $410,000 in back pay and interest to resolve allegations that its base pay for Associate Consultant and Consultant positions in Pittsburgh, Pennsylvania, favored Asian employees over 67 employees who identified as Black, white, or two or more races (press release 9/29/2021 and conciliation agreement 9/27/2021).
   
• IBM agreed to pay $350,000 in back pay and interest to settle allegations that it underpaid 115 female employees in Project Manager positions compared to their male counterparts. The settlement stemmed from the OFCCP’s review of one of IBM’s functional affirmative action plans (approved by OFCCP to be organized by business function rather than location) in Washington, D.C. (press release 10/4/2021 and conciliation agreement 9/30/2021).
   
• International Packaging Corporation (Interpak) agreed to pay $160,000 in back wages and interest to resolve allegations that it underpaid 176 female employees in Machine Operator 1 and Machine Operator 2 positions in Pawtucket, Rhode Island. The company also agreed to spend at least $100,000 on a third-party consultant, mutually agreeable to OFCCP, to improve its compensation system and clarify opportunities for advancement within the company (conciliation agreement 9/30/2021).
   
• Regus Management Group agreed to pay $900,000 in back wages and interest to settle allegations that its hiring practices in Addison, Texas, discriminated against Black and male applicants for the position of Community Associate and against Black applicants for the position of Community Manager (press release 10/4/2021 and conciliation agreement 9/30/2021).
   
• Serco Inc. agreed to pay $150,000 in back wages and interest to resolve allegations that it underpaid 35 female employees in Information Technology positions compared to similarly situated males at its location in Herndon, Virginia (press release 10/7/2021 and conciliation agreement 9/30/2021).
   
• Thomson Reuters Corp agreed to pay $550,000 in back wages and interest to resolve allegations that it underpaid 113 female, Black and Hispanic employees at its U.S. headquarters in New York City. The OFCCP reached its conclusions after analyzing three job groups in the company’s affirmative action plan (AAP): Administrative Professionals, Junior Administrative Professionals, and Technical Professionals (press release 10/6/2021 and conciliation agreement 9/30/2021).

Tips: Some of these conciliation agreements indicate the OFCCP made its pay comparisons using the job groups in the AAP, rather than job titles. Identifying which jobs are comparable in analyzing compensation is a contentious and difficult issue. The affirmative action regulations require AAP job groups to contain job titles with similar job content, wages, and opportunities for advancement, but that doesn’t mean the jobs are necessarily appropriate for pay comparisons. For example, a Professionals job group in an AAP might contain a Human Resources Professional, a Safety Professional, an Engineer, and an Accountant – none of whom should be compared when setting wages, because their job responsibilities are too different. If you use Vigilant to prepare your AAPs, your Vigilant affirmative action representative will help you determine how to organize your job groups for AAP purposes. In the event of an OFCCP audit, though, you may need to provide specific information explaining how you set pay rates and what jobs (if any) you compare to do so.