Affirmative Action Planning Methodology 101 Part II

Transcription

1 Affirmative Action Planning Methodology 101 Part II November 12, 2014 Fue Lo Mackenzie Martin Contact Information Biddle Consulting Group, Inc. 193 Blue Ravine, Suite 270 Folsom, CA Fue Lo Mackenzie Martin 2 1

2 Agenda: Part II Recap Data Specifications Plan Implementation Audit Review Compensation OFCCP Updates Resources Questions and Answers 3 Recap 1) Types of AAPs Establishment Functional Roll-Up 2) Number of AAPs to Develop Pros and Cons of a Roll-Up AAP 3) Required Components of the AAPs Narrative Technical Components 4) Developing Job Groups Number that you look like 4 2

3 Recap 5) Determining the Availability Identifying the Factors and the Factor Weights External Factor Internal Factor Coming up with the number that you should look like 6) Setting Goals Answers the question: Where are we at? 7) Adverse Impact Analysis Answers the question: How did we get here? 5 Data Specifications 6 3

4 Data Specifications Data required to complete an AAP: 1) Job File (Optional) 2) Employee file 3) Applicants 4) Hires 5) Promotions 6) Terminations 7 Data Specifications Jobs File Master list of all Job Titles 8 4

5 Data Specifications Sample Jobs File Important to have all Job Titles listed here as it will help reconcile the rest of the data specifications 9 Data Specifications Jobs File Job Code The code assigned to each unique job title Job Title The title of the employee s job Census Code The Census occupation code that applies to the job title Job EEO Category The EEO Category for the job title EEO Categories for Private Employers: 1.1 Executive/Senior Level Officials & Managers 1.2 First/Mid Level Officials & Managers 2 Professionals 3 Technicians 4 Sales Workers 5 Administrative Support Workers 6 Craft Workers 7 Operatives 8 Laborers & Helpers 9 Service Workers Job Group Code A code indicating the Job Group to which the employee s Job Title belongs Job Group Name The name of the job group that matches the Job Group Code for the job 10 5

6 Data Specifications Employees File Includes all active employees on your payroll as of the snapshot date 11 Data Specifications Employees File Employee Identifier A unique identifier for each employee (e.g., Last four digits of SSN) Last Name Employee s last name First Name Employee s first name Employee Zip Code The zip code where the employee lives. This can be used to create Local Labor Areas if applicant flow data is not available (Optional) Hire Date The date the employee was hired Gender Sex of employee (M/F) Race Employee s ethnicity (W, B, H, A, I, 2+, HW) Protected Veteran Employee s veteran status (Y/N) Disability Employee s disability status (Y/N) Job Code The code assigned to each unique job title Job Title The title of the employee s job Job EEO Category The EEO Category for the job title Wage Type The time interval of the amount shown in the Salary field (e.g., A Annual, M Monthly, S Twice-monthly, B Bi-weekly, W Weekly, H Hourly, O Other) *The type entered must match the Salary amount Base Salary The dollar amount that matches the employee s Wage Type (e.g., if wage type is A for annual, this field must contain an annual amount) Reporting Site AAP reporting location Physical Work Site Where employee is physically located Organizational Unit The employee s department 12 6

7 Data Specifications Employees File Required Additional Data Fields: Includes all active employees on your payroll as of the snapshot date 13 Data Specifications Employees File Required Additional Data Fields: Pay Grade Salary band Employee Type Full-Time, Part-Time, Contract, Per Diem or Day Labor, Temporary Typical Workweek Hours Number of hours worked in a typical workweek Bonuses (If Applicable) Total additional compensation (in the form of commission) that the employee received: holiday bonuses, quarterly bonuses, annual bonuses, etc. Incentives (If Applicable) Providing employees with incentives to receive pay increase Commissions (If Applicable) Total additional compensation (in the form of commission) that the employee received. Merit Increases (If Applicable) Performance appraisals Locality Pay or Overtime (If Applicable) Surrounding labor market value or overtime compensation 14 7

8 Data Specifications Applicants File Includes all applicants associated with all your hires, within your transaction period 15 Data Specifications Internet Applicant Required Optional Solicit Race/Ethnicity & Gender 1. Individual Submits Expression of Interest (Electronic) 2. Contractor Considers Individual for a Particular Position 3. Individual Possesses Basic Qualifications 3 Conditions of BQ: Non- Comparative Objective Relevant 4. Individual Does NOT Self- Eliminate Before Offer is Made Individuals who meet all 4 prongs are applicants and will be included in the Personnel Transactions and Adverse Impact Analyses 5. Individual is an Applicant Retain Records 16 8

9 Data Specifications Applicants File Includes all applicants associated with all your hires, within your transaction period 17 Data Specifications Applicants File Requisition # An internal code assigned to a job opening (Optional) Applicant Identifier Applicant s unique identifier (Optional) Last Name Applicant s last name First Name Applicant s first name Race Applicant s ethnicity (W, B, H, A, I, 2+, HW, U) Gender Sex of applicant (M/F & U) Protected Veteran Employee s veteran status (Y/N) Disability Employee s disability status (Y/N) Job Code The code assigned to each unique job title Job Title The title of the applicant s job Job EEO Category The EEO Category for the job title Reporting Site AAP reporting location Disposition Code/Name Hired, interviewed, rejected, etc. (Optional) Applicant Type indicate whether the applicant is internal/external (Optional) Applicant Zip Code The applicant s zip code (Optional) Applicant Date The date the applicant applied 18 9

10 Data Specifications Hires File Includes all new hires or rehires made within the transaction period 19 Data Specifications Hires File Requisition # An internal code assigned to a job opening Hire Identifier Hire s unique identifier (Optional) Last Name Last name First Name First name Gender Sex (M/F) Race Ethnicity (W, B, H, A, I, 2+, HW) Protected Veteran Employee s veteran status (Y/N) Disability Employee s disability status (Y/N) Job Code The code assigned to each unique job title Job Title The title of the new hire s job Job EEO Category The EEO Category for the job title Reporting Site AAP reporting location Hire Date The date the employee was hired, not necessarily the first day of work 20 10

11 Data Specifications Promotions File Includes all promotions made within transaction period. OFCCP defines a promotion as an increase in responsibility, wage rate, and change in job title. 21 Data Specifications Promotions File Employee Identifier A unique identifier for promoted employee Last Name Employee s last name First Name Employee s first name Gender Sex of employee (M/F) Race Employee s ethnicity (W, B, H, A, I, 2+, HW) Protected Veteran Employee s veteran status (Y/N) Disability Employee s disability status (Y/N) Job Code From The code assigned to the employee s previous job, the one promoted from Job Title From The title of the job from which the employee was promoted from Job EEO Category From The EEO Category for the job title Job Code To The code assigned to the job to which the employee was promoted Job Title To The title of the job from which the employee was promoted to Job EEO Category To The EEO Category for the job title Reporting Site From Previous AAP reporting location Reporting Site To Current AAP reporting location Promotion Type Competitive or Non-competitive (if applicable) Promotion Date The date the employee was promoted **Must include company s definition of a promotion in Narrative 22 11

12 Data Specifications Terminations File Includes all terminations made within the transaction period 23 Data Specifications Terminations File Employee Identifier A unique identifier for promoted employee Last Name Employee s last name First Name Employee s first name Gender Sex of employee (M/F) Race Employee s ethnicity (W, B, H, A, I, 2+, HW) Protected Veteran Employee s veteran status (Y/N) Disability Employee s disability status (Y/N) Termination Code The type of termination (e.g., voluntary, involuntary) Termination Reason Describe the reason for termination (Optional) Job Code The code assigned to each unique job title Job Title The title of the employee when terminated Job EEO Category The EEO Category for the job title Reporting Site AAP reporting location Termination Date Date the employee was terminated 24 12

13 Data Specifications Applicants File Hires File Employees File Jane applied for an open position and was hired within the transaction period. 25 Data Specifications Applicants File Hires File Terminations File Employees File Jane was terminated within the transaction period

14 Data Specifications Promotions File Employees File: reflect current jobs information Jane was promoted within the transaction period. 27 Plan Implementation 28 14

15 Plan Implementation Designation of Responsibility and Accountability : CEO, Human Resource, Managers Be aware of each individual s role within the AAP Know the AAP and be informed of problem areas: Personnel activity, personnel procedures, and selection disparity Compensation disparity Develop and implement an auditing system that measures the effectiveness of its AAP: Monitor records of personnel activities -hires, promotions, terminations- and compensation. If an X-Ray diagnosed a broken bone, wouldn t you want to fix it? 29 Plan Implementation Action Oriented Program (AOP) Develop and execute AOPs to correct any problem area Update annually to reflect procedures that produce measurable results Document ALL good faith efforts Remove identified barriers Expand employment opportunities 30 15

16 Plan Implementation 31 Plan Implementation 32 16

17 Plan Implementation 33 Plan Implementation 34 17

18 Plan Implementation 35 Plan Implementation 36 18

19 Plan Implementation

20 Audit Review 1) Types of Audits 2) Audit Process 3) The Desk Audit Letter 4) Audit Checklist 5) Recommendations 39 Audit Review What is a Compliance Evaluation or Audit? An evaluation to determine if the contractor maintains nondiscriminatory hiring and employment practices and is taking affirmative action to ensure that the contractor does not make employment decisions with regard to race, color, religion, sex, and national origin. What information does the OFCCP have access to during a compliance evaluation? Applicants Hires Promotions Terminations Utilization Compensation 40 20

21 Copyright Biddle Consulting Group, Inc. Audit Review Types of Audits 1) Compliance Evaluation Desk Audit Submission of AAPs and supporting documents to the OFCCP Review of documents at OFCCP s Office On-Site Audit Conducted at the contractor s facility Inspection of company s personnel and employment practices, documents Can involve personnel interviews 2) Corporate Management Compliance Evaluation Review to ensure that there are no barriers to women/minorities when it comes to advancement within the organization 41 Audit Review FCSS (ID s Contractors for Audit) Corporate Scheduling Announcement Letter (ID s Contractor s AAPs for Audit in a 12-month period) Desk Audit Letter Contractor Submits AAP Results: 1. No Apparent/No Technical Violation 2. Notice of Violation (Conciliation Agreement) 3. Show Cause/Recommendation for Enforcement OFCCP Reviews AAP Problem Areas/Triggers No OFCCP Provides Audit Result(s) Yes Additional Data/ OFCCP On-Site 42 21

22 10 Minute Break: Do Not Sign Off From GoToWebinar 43 Audit Letter and Checklist 44 22

23 Audit Letter and Checklist Addressed to the highest ranking official at the audit location. * Tip: Route memo/ to anyone who may receive the Scheduling Letter informing them to immediately forward it to the proper personnel. 45 Audit Letter and Checklist Itemized Listing: Executive Order An Organizational Profile prepared according to 41 CFR The Workforce Analysis/Organization Profile 46 23

24 Audit Letter and Checklist 2. The formation of job groups (covering all jobs) consistent with criteria given in 41 CFR For each job group, a statement of the percentage of minority and female incumbents as described in 41 CFR and 3. The Job Group Analysis/Report 47 Audit Letter and Checklist 4. For each job group, a determination of minority and female availability that considers the factors given in 41 CFR (c)(1) and (2). 4. Availability Analysis 48 24

25 Audit Letter and Checklist 5. For each job group, the comparison of incumbency to availability as explained in 41 CFR Placement goals for each job group in which the percentage of minorities or women employed is less than would be reasonably expected given their availability as described in 41 CFR Comparison of Incumbency to Availability Report 6. Placement Goals Reports 49 Audit Letter and Checklist Itemized Listing: Section Results of the evaluation of the effectiveness of outreach and recruitment efforts that were intended to identify and recruit qualified individuals with disabilities (IWDs) as described in 41 CFR (f). 8. Documentation of all actions taken to comply with the audit and reporting system requirements described in 41 CFR (h). 7. and 8. Written response in Narrative. How are you assessing your recruitment efforts towards IWD? Track recruitment sources from ALL applicants

26 Audit Letter and Checklist 9. Documentation of the computations or comparisons described in 41 CFR (k)for the immediately preceding AAP year and, if you are six months or more into your current AAP year when you receive this listing, provide the information for at least the first six months of the current AAP year. 10. The utilization analysis evaluating the representation of IWDs in each job group, or, if appropriate, evaluating the representation of IWDs in the workforce as a whole, as provided in 41 CFR If you are six months or more into your current AAP year on the date you receive this listing, please also submit information that reflects current year progress. 9. and 10. Technical Reports for IWD 51 Audit Letter and Checklist Itemized Listing: Section 4212 (VEVRAA) 11. Results of the evaluation of the effectiveness of outreach and recruitment efforts that were intended to identify and recruit qualified protected veterans as described in 41 CFR (f). 12. Documentation of all actions taken to comply with the audit and reporting system requirements described in 41 CFR (h). 11. and 12. Written response in Narrative. How are you assessing your recruitment efforts towards VETS? Track recruitment sources from ALL applicants

27 Audit Letter and Checklist 13. Documentation of the computations or comparisons described in 41 CFR (k) for the immediately preceding AAP year and, if you are six months or more into your current AAP year when you receive this listing, provide the information for at least the first six months of the current AAP year. 13. Technical Report VETs 14. Documentation of the hiring benchmark adopted, the methodology used to establish it if using the five factors described in (b)(2). If you are six months or more into your current AAP year on the date you receive this listing, please also submit information that reflects current year results. 14. Are you going to use the Civilian Labor Force % (BCG s Recommendation) or create your own hiring benchmark? 53 Audit Letter and Checklist Support Data 15. Copies of your Employer Information Report EEO-1 (Standard Form 100 Rev.) for the last three years. 41 CFR Copies of your EEO-1 Reports (3 years) A copy of your collective bargaining agreement(s), if applicable. Include any other documents you prepared, such as policy statements, employee notices or handbooks, etc. that implement, explain, or elaborate on the provisions of the collective bargaining agreement. 16. Collective Bargaining Agreements (if applicable) 54 27

28 Audit Letter and Checklist 17. Information on your affirmative action goals for the immediately preceding AAP year and, where applicable (see below), progress on your goals for the current AAP year. For the immediately preceding AAP year, this report must include information that reflects: a. job group representation at the start of the AAP year, (i.e., total incumbents, total minority incumbents, and total female incumbents); b. the percentage placement rates (% goals) established for minorities and women at the start of the AAP year; and c. the actual number of placements (hires plus promotions) made during the AAP year into each job group with goals (i.e., total placements, total minority placements, and total female placements. For goals not attained, describe the specific good faith efforts made to achieve them. If you are six months or more into your current AAP year on the date you receive this listing, please also submit information that reflects progress on goals established in your current AAP year, and describe your implementation of action-oriented programs designed to achieve these goals (Cont.) Audit Letter and Checklist For the preceding AAP year, this report must include information that reflects: a. Job group representation at the start of the AAP year, (i.e., total incumbents, total minority incumbents, and total female incumbents). This report shows job groups with goals from previous reporting period only (e.g., previous AAP year). Actual hires and promotions into the job groups are also shown. Goals are achieved if placement rate is equal or greater than goal/availability

29 17. (Cont.) Audit Letter and Checklist b. The percentage placement rates (% goals) established for minorities and women at the start of the AAP year. This report shows job groups with goals from previous reporting period only (e.g., previous AAP year). Actual hires and promotions into the job groups are also shown. Goals are achieved if placement rate is equal or greater than goal/availability (Cont.) Audit Letter and Checklist c. The actual number of placements (hires plus promotions) made during the AAP year into each job group with goals (i.e., total placements, total minority placements, and total female placements. For goals not attained, describe the specific good faith efforts made to achieve them. This report shows job groups with goals from previous reporting period only (e.g., previous AAP year). Actual hires and promotions into the job groups are also shown. Goals are achieved if placement rate is equal or greater than goal/availability

30 17. (Cont.) Audit Letter and Checklist If you are six months or more into your current AAP year on the date you receive this listing, please also submit information that reflects progress on goals established in your current AAP year, and describe your implementation of action-oriented programs designed to achieve these goals. This report shows job groups with goals from previous reporting period only (e.g., previous AAP year). Actual hires and promotions into the job groups are also shown. Goals are achieved if placement rate is equal or greater than goal/availability (Cont.) Audit Letter and Checklist If you are six months or more into your current AAP year on the date you receive this listing, please also submit information that reflects progress on goals established in your current AAP year, and describe your implementation of action-oriented programs designed to achieve these goals. This report shows job groups with goals from previous reporting period only (e.g., previous AAP year). Actual hires and promotions into the job groups are also shown. Goals are achieved if placement rate is equal or greater than goal/availability

31 Audit Letter and Checklist 18. Data on your employment activity (applicants, hires, promotions, and terminations) for the immediately preceding AAP year and, if you are six months or more into your current AAP year when you receive this listing, provide the information in (a) through (c) below for at least the first six months of the current AAP year. You should present this data by job group (as defined in your AAP) or by job title. a. Applicants and Hires: For each job group or job title, this analysis must consist of the total number of applicants and the total number of hires, as well as the number of African- American/Black, Asian/Pacific Islander, Hispanic, American Indian/Alaskan Native, White, and the number of female and male applicants and hires. For each job group or job title applicants for whom race and/or sex is not known, should be included in the data submitted However, if some of your job groups or job titles (most commonly, entry-level) are filled from the same applicant pool, you may consolidate your applicant data (but not hiring data) for those job groups or titles. For example, where applicants expressly apply for or would qualify for a broad spectrum of jobs (such as Production, Office, etc.) that includes several job groups, you may consolidate applicant data (Cont.) Audit Letter and Checklist a. Applicants and Hires: The regulations at 41 CFR (b) and (d) require an analysis of your selection process, including whether the process eliminates a significantly higher percentage of minorities or women than non minorities or men. OFCCP s Focus 62 31

32 OFCCP s Focus Audit Letter and Checklist Example of Summary of Personnel Transactions 63 Audit Letter and Checklist 18. (Cont.) b. Promotions: For each job group or job title, provide the total number of promotions by gender and race/ethnicity. Also, include a definition of promotion as used by your company and the basis on which they were compiled (e.g., promotions to the job group, from and/or within the job group, etc.). If it varies for different segments of your workforce, please define the term as used for each segment. If you present promotions by job title, include the department and job group from which and to which the person(s) was promoted. The term race/ethnicity as used throughout the Itemized Listing includes these racial and ethnic groups: African-American/Black, Asian/Pacific Islander, Hispanic, American Indian/Alaskan Native, and White

33 Audit Letter and Checklist 18. (Cont.) b. Promotions: The regulations at 41 CFR (b) and (d) require an analysis of your promotion practices to determine if upward mobility of minority or female employees is occurring at a lesser rate (compared to workforce mix) than non minority or male employees. How are promotions defined? An increase in responsibility, wage rate, and change in job title. Include definition of promotion in Narrative. 65 Audit Letter and Checklist Example of Summary of Promotions 66 33

34 Audit Letter and Checklist 18. (Cont.) c. Terminations: For each job group or job title, provide the total number of employee terminations by gender and race/ethnicity. When presenting terminations by job title, include the department and job group from which the person(s) terminated. 67 Audit Letter and Checklist 18. (Cont.) c. Terminations: The regulations at 41 CFR (b) and (d) require an evaluation of the degree to which non discrimination policy is carried out with respect to employee terminations

35 Audit Letter and Checklist Example of Summary of Personnel Transactions 69 OFCCP s Focus Audit Letter and Checklist 19. Employee level compensation data for all employees (including but not limited to full-time, part-time, contract, per diem or day labor, temporary) as of the date of the workforce analysis in your AAP. Provide gender and race/ethnicity information and hire date for each employee as well as job title, EEO-1 Category and job group in a single file. Provide all requested data electronically, if maintained in an electronic format. See Note 1, below. a. For all employees, compensation includes base salary and or wage rate, and hours worked in a typical workweek. Other compensation or adjustments to salary such as bonuses, incentives, commissions, merit increases, locality pay or overtime should be identified separately for each employee. b. You may provide any additional data on factors used to determine employee compensation, such as education, past experience, duty location, performance ratings, department or function, and salary level/band/range/grade. c. Documentation and policies related to compensation practices of the contractor should also be included in the submission, particularly those that explain the factors and reasoning used to determine compensation

36 Audit Letter and Checklist 20. Copies of reasonable accommodation policies, and documentation of any accommodation requests received and their resolution, if any. 21. Your most recent assessment of your personnel processes, as required by 41 CFR (b) and (b), including the date the assessment was performed, any actions taken or changes made as a result of the assessment, and the date of the next scheduled assessment. 22. Your most recent assessment of physical and mental qualifications, as required by 41 CFR (c)and (c), including the date the assessment was performed, any actions taken or changes made as a result of the assessment, and the date of the next scheduled assessment 71 Audit Letter and Checklist NOTES NOTE 1: If any of the requested information is computerized, you must submit it in an electronic format that is complete, readable, and useable. Please use caution when submitting large electronic files. Check with the OFCCP Compliance Officer and your system administrator to ensure adherence to administrative and system guidelines. NOTE 2: According to the Paperwork Reduction Act of 1995, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is We estimate that the average time required to complete this information collection is 27.9 hours per response, including the time for evaluating instructions, searching existing data sources, gathering and maintaining the data needed, and completing and evaluating the collection of information

37 Audit Letter and Checklist Basic AAP Contents (Under 6 months into AAP Year): Narrative for Women and Minorities Narrative for Individual with Disabilities and Protected Veterans Workforce Analysis Job Group Analysis Availability Analysis Comparison of Incumbency to Availability Placement Goals Utilization Analysis (IWD) Hiring Benchmark (Vets) Goals Progress Report Summary of Personnel Transactions Compensation Factors (Separate Electronic File) 73 Audit Letter and Checklist 6 Months into AAP Year: Basic Contents (see previous slide) Six Month Updated Summary of Personnel Transactions Six Month Updated Utilization Analysis (IWD), Hiring Benchmark (Vets), and Goals Progress Report 74 37

38 Audit Letter and Checklist A few tips to consider: 1. Repair all inaccurate, wrong, or incomplete data. 2. Perform adverse impact analyses on all transactions. 3. Review compensation data. 4. Document and emphasize all EEO Good Things. 5. Prepare a neat and professional AAP. The personnel in charge of implementation can answer simple questions regarding the Plan(s) The reports are complete and accurate 6. Consider performing a pre-audit mock audit. 7. Are you registering job openings with state agencies? 75 Audit Letter and Checklist Posting Requirements Requires that contractors list job openings with the appropriate employment service delivery system. Employment openings subject to the mandatory job listing requirement include all positions except: Executive and top management positions, Positions that will be filled from within the contractor's organization, and Positions lasting three days or less. Listing with the appropriate employment service delivery system must be done concurrently with a contractor's use of any other recruitment source or effort

39 Audit Letter and Checklist A few tips to consider (cont.): 8. Reread the regulations. 9. Know your auditor. 10. Know your auditor s time frame for decisions. 11. Document all conversations with reviewers. 12. Run the chain of command only when necessary. 13. GET HELP!!!! 77 Compensation 78 39

40 Directive 307 Effective: February 28, 2013 clarifies and improves OFCCP procedures in further support of the agency s efforts to align pay discrimination enforcement with longstanding principles under Title VII does not create new legal rights or requirements or change current legal rights or requirements for contractors 79 Directive 307 Policy Under Executive Order 11246, as amended, and its implementing regulations, contractors may not discriminate in rates of pay or other forms of compensation (41 CFR ) and must review and monitor their compensation systems to determine whether there are gender-, race-, or ethnicity-based disparities (41 CFR (b)(3))

41 Directive 307 Procedures 1. Conduct preliminary analysis of summary data (if necessary or appropriate) 2. Conduct an analysis of individual employee-level data 3. Determines the approach from a range of investigative and analytical tools 4. Considers all employment practices that may lead to compensation disparities 5. Develops Pay Analysis Groups 6. Investigates systemic, small group, and individual discrimination 7. Reviews and tests factors before accepting the factors for analysis 8. Conducts onsite investigation, offsite analysis, and refinement of the model. 81 Directive 307 Procedures 1. Conduct preliminary analysis of summary data (if necessary or appropriate) Assesses quantitative and qualitative factors. Quantitative Factors may include: Size of the overall average pay differences based on race and gender; Size of the largest average pay difference within AAP job groups, or the contractor s existing salary band or pay grade system; Number of job groups or grades where average pay differences based on race or gender exceed a certain threshold; or Number of employees affected by race-or gender-based average pay differences within job groups or grades Qualitative Factors Compliance history, OFCCP or EEOC complaints, anecdotal evidence, potential violations involving other employment practices 82 41

42 Directive 307 Procedures 2. Conduct an analysis of individual employee-level data Compliance Officer may contact contractor to ask clarifying questions on the materials submitted and may request additional information. Requested data must be submitted in a complete, readable, and useable form. Failure to submit complete compensation data and information may result in a Show Cause Notice which allows for an additional 30 days to remedy the problem. If violation is still not corrected, enforcement may occur. Results of the desk audit are used to determine if the desk audit will continue 83 Directive 307 Procedures 3. Determine the approach from a range of investigative and analytical tools Three Questions: 1. Is there measurable difference in compensation on the basis of sex, race, or ethnicity? 2. Is the difference in compensation between employees who are comparable under the contractor s wage or salary system? 3. Is there a legitimate (i.e., non discriminatory) explanation for the differences? Investigation may include Analysis of workforce data, interviewing personnel and employees, examining payroll and HRIS, etc

43 Directive 307 Procedures 4. Considers all employment practices that may lead to compensation disparities 85 Directive 307 Procedures 5. Develop Pay Analysis Groups (PAGs) PAGs: used to test for statistical significance on large groups of employees, potentially from different job titles, units, categories and or/job groups who are comparable based on contractors pay practices. Developed by OFCCP investigators, statistical analysts, and Regional Solicitors of Labor. Statistical controls are put in place to ensure the workers are similarly situated and are accounted for in the statistical analysis conducted. Considers elements of the particular industry, the type of jobs and compensation at issue, contractor s actual compensation practices, and available data

44 Directive 307 Procedures 6. Investigates systemic, small group, and individual discrimination 87 Directive 307 Procedures 7. Review and test factors before accepting the factors for analysis Factors: An element that the contractor offers to explain differences in employee compensation under its compensation system and practices. Can be a qualification or skill that the worker brings to the position (i.e., education, experience, etc.), or employment element (i.e., position, level, tenure in position, or performance rating). Must be implemented fairly, consistently applied, and relevant to the contractor s compensation practices before being accepted. Must not be tainted by discrimination or results in adverse impact

45 Directive 307 Procedures 7. Review and test factors before accepting the factors for analysis (cont.) Testing Factors: 1. Is the data complete and accurate? 2. Is the factor relevant to compensation in terms of the contractor s policy and how it was applied? 3. Was the factor consistently applied? 4. Does using the factor cause adverse impact? * CO should also review policy statements and other documentation that addresses how the factors are considered within the company and interview staff and personnel in the event of an onsite review. 89 Directive 307 Procedures 8. Conduct onsite investigation, offsite analysis, and refinement of the model. Contractor is allowed to provide any additional relevant information to be considered prior to the CO s review. If additional information resolves any discrepancies found, the investigation is closed. If additional information does not resolve found discrepancies, the CO determines if an onsite is needed. o CO must notify the contractor of an onsite visit in writing and should identify/request any needed data and information consistent with OFCCP procedures. o Determines what factors were applied consistently to be an accurate depiction of pay and what factors should be thrown out

46 Directive 307 Concluding the Review and Analyses OFCCP determines whether there are findings of compensation discrimination. Compliance Officer evaluates all available evidence before making a determination regarding contractor compliance. Action may include closure of the compensation issue if no violations were found, or Issues a Notice of Violation (NOV) that outlines the violations found within the compliance review and highlights how the contractor is expected to remedy these violations. 91 Compensation Recommendations All correspondence, analyses, and results should be covered under attorney-client privilege. Perform a preliminary trigger test analyses on all compensation data prior to submitting plan to OFCCP. Identify the factors/variables that affect compensation (may be different by location, department, etc.). Rank-order the list. Establish company-wide data collection/retention protocols for those compensation factors (beginning with the top of the list). Perform yearly, proactive regression analyses by job title and pay grade or SSEG (Important: Be mindful of low lying fruit ). First perform preliminary regression analyses by including only 2-3 primary variables that are readily available

47 Compensation Recommendations (cont.) Include additional relevant explanatory variables, if necessary. Evaluate all statistically significant differences using a non-statistical cohort analysis (i.e., file-by-file comparison). In most cases, the OFCCP will only issue a Notice of Violation where there is both statistical and anecdotal evidence of discrimination. If proper regression analyses and a file-by-file cohort review fail to identify justifiable reasons for compensation disparities, calculate the amount needed to eliminate statistical significance and consider making changes Important: Beware of the dog chasing it s tail perhaps conduct what if analyses. GET HELP!!!

48 OFCCP Updates New Itemized Listing for audits. Outreach and recruitment active linkages. OFCCP is still aggressively pursuing Recordkeeping and Adverse Impact issues. Job posting proof of posting. Lack of effort in job postings/recruitment is resulting in a high volume of conciliation agreements. EO clause make sure you include it. Desk/On-site audits. Renewed focus on compensation be able to defend it. Active Case Enforcement: Full compliance review for every 25 th audit 95 Resources Books Adverse Impact and Test Validation: A Practitioner s Guide to Valid and Defensible Employment Testing, 2 nd Edition, Dan A. Biddle, Ph.D. Secrets of Affirmative Action Compliance, 9 th Edition, William Truesdell Compensation Analysis: A Practitioner's Guide to Identifying and Addressing Compensation Disparities Authors: Patrick M. Nooren, Ph.D., and Dan A. Biddle, Ph.D. Websites

49 Q & A 97 49