ofccp audits - 5 reasons they fail

WEBINAR – OFCCP Audits - 5 Reasons Why They Fail

OFCCP Audits

5 Reasons They Fail

Grace ContiDirector, Affirmative Action Compliance,Portnoy, Messinger, Pearl & Associates

Gary CowanDirector of Compliance, America's Job Exchange


PMP Presenter

Grace M. Conti Executive VP & Director, Affirmative Action Compliance [email protected]. Conti has been with Portnoy, Messinger, Pearl & Associates, Inc.(“PMP”) since 1993. Ms. Conti holds a degree in Human Resources/Labor Relations from the State University of New York and has also taken courses at Cornell University. She has been re-elected three times as Co-Chair of the Long Island ILG. Ms. Conti is perhaps best known for her expertise in Affirmative Action rules and regulations. Often called the “Affirmative Action Guru” by her clients, she is proud of her exceptional record of successfully closed OFCCP audits. Grace has developed comprehensive programs tailored specifically for those companies which have or are seeking Federal government contracts. Ms. Conti regularly holds training workshops throughout the country on the various affirmative action compliance matters. Her clients come from a variety of industries including aircraft, communications, manufacturing, hospitality and various other industries.

mailto:[email protected]


The confidential materials contained in this training seminar were prepared by:

Portnoy, Messinger, Pearl & Associates, Inc.

as reference for the attendees. Comments offered during this seminar may be affected as regulations develop. The materials represent the speaker’s views and are not to be considered legal advice. These copyrighted materials may not be reproduced, copied or used without prior permission from PMP.

Disclaimer


OFCCP Audits

What You Should Know


Current Leadership

The coming election will result in a change ofleadership at the OFCCP – how quickly after the

election that will happen is uncertain.

“We are going to be extremely proactive and aggressive. The message is it's a new day at the Department of Laborand it's a new day at the OFCCP" Feb. 16, 2010

“For the first time in more than 45 years, the Equal Employment Opportunity Commission, the Department of Justice and the

Department of Labor are working to build a true partnership.”Keynote speech NILG 2011


How Are Contractors Selected for a

Compliance Review (aka audit)?

Q: How does OFCCP select a federal contractor’s establishment for a compliance evaluation?

A: OFCCP's Federal Contractor Selection System (FCSS) is aneutral selection system that identifies federal contractorestablishments for compliance evaluations. The FCSS processuses multiple information sources such as federal acquisitionand procurement databases, EEO-1 employer informationreports, Dun & Bradstreet data, Census data, as well asstatistical thresholds such as industry type and employeecounts of federal contractor establishments.


Types of Audits

Desk Audit

• Submission of AAPs and supporting documents to the OFCCP based on Scheduling Letter’s itemized Listing

• May include further data requests and telephone calls to clarify data submitted

On-site Audit

• Conducted at the contractor’s facility

• Inspection of company’s employment practices, documents

• Involves interviews of management and current employees

• Can involve telephone interviews with applicants or former employees

• Usually 1-3 day process


Revised OFCCP LetterRevised on: October 15, 2014 | Extended to: June 30, 2019

Section 503(new regulations/outreach)

VEVRAA(new regulations/outreach)

Job Descriptions

Compensation, performance reviews, pay

increases, bonus payments,how overtime is assigned

Itemized listing of items to be submitted increased from 11 items to 22 items

Added Focus On:


Litigation and penalties

Risks of Non-Compliance

Class Action lawsuits

Negative press for company

Suspension, cancellation, termination of current contracts and debarment from future contracts

Risk of additional charges brought bycurrent and former employees


Top 5 Reasons

OFCCP Audits Fail


Not keeping up with regulatory changes


OFCCP Regulations

Effective 3/24/2014

VEVRAAProtected Veterans

A hiring benchmark of 6.9%**for protected veterans

(based upon national percentage of veterans in the workforce)

NOTE: Small applicant pools have a negative impact on reaching 6.9%

**Updated benchmark is effective 03/04/16

Section 503Individual with Disability (IWD)

Survey workforce and analyze your progress toward utilization goal of IWD

at the beginning of each plan year

7% utilization goal per job group if more than 100 employees

Fewer than 100 employees: 7% goal applies to the entire workforce


VEVRAA and Section 503

Data Collection Requirements/Reporting

Applicants vs Hires comparisons:• Total # of job openings and # of jobs filled

• Total # of “applicants” for all job groups

• Total # of applicants who self-identify

• Total # of applicants hired

• Total # of protected veterans and IWD hired

All data must be maintained for 3 years

It is the contractors responsibility

(even when using an outside agency)

to have this data for all new hires


Updated Sex Discrimination Guidelines

Family and/or medical leave may not be denied or provided differently on the basis of gender

Effective August 15, 2016, regulations updatedanti-discrimination guidance for:

• pregnancy • childbirth• related medical conditions• gender identity• transgender • sex stereotyping (restricting job classifications on the basis of sex)


Executive Order #13658 – Established minimum wage effective1/1/2015 of $10.10; as of 1/1/2016 = $10.15 (applies to Davis-Bacon Act,

Service Contract Act and certain concession type contractors)

Executive Orders for Federal Contractors

Executive Order #13672 – added “sexual orientation” and “gender identity” to the list of protected categories. All EEO statements in policies, new or modified contracts and

subcontracts, purchase orders, AAPs, etc. Effective 4/8/2015

PENDING: Executive Order #13706 – Paid Sick Leave may become effective 1/1/2017(for Davis-Bacon Act, Service Contract Act, certain concession type contractors)

Executive Order #13665 – for contracts greater than $10K entered into or modified on or after 1/11/2016 - Prohibition Against Pay Secrecy Policies and Retaliation. Mandated language on

Careers website, intranet, bulletin boards, update all EEO statements in policies, etc.


Executive Order #13673

Fair Pay & Safe Workplace

Effective 10/25/2016 – Contractors bidding on government contracts of $50million or more must report any non-compliance violations (14 workplace

laws) received within one year prior to the start of the contract bid

For contractors with bids under $50million,no disclosure is required until 4/25/2017

For subcontractors – Effective 10/25/2017 - report violations to DOLand report to primes on DOL findings

Reporting period will be phased in 1 year at a timeto 3-year look back by 10/25/2018


Paycheck Transparency: Employees working on the contract or subcontract must be provided with wage statements showing hours

worked, overtime hours (broken down on a work week basis), rate of pay, gross pay, itemized deductions from gross pay

Effective 1/1/2017: contractors and subcontractors must provide independent contractors a document informing them of this

relationship, where applicable

Executive Order #13673

Pay Transparency


Not reviewing your data on a regular basis


Review Data on a Regular Basis

Applicant flow

New Hires Terminations

PromotionsProgress to

GoalsJob

Descriptions

Effectiveness of Outreach


Applicant Pool vs. Hires

Promotions Terminations

OFCCP and Adverse Impact

2-Standard DeviationOFCCP’s current “analysis of choice”

Used to Analyze


Job Posting and Outreach Responsibility

You must prove that every job (with a few exceptions) was listed with the appropriate ESDS (Employment Service Delivery System)

where the job is located

You must be able to prove that you have a “relationship” with local organizations that assist veterans and IWD in their job search (in your RRA)

If these organizations are not successful in providing qualified applicants, it’s your responsibility to seek other organizations

Depending on company goals, additional outreach to female andminority organizations should be included


Not conducting a compensation review prior to audit


Why Do an Analysis?

41 CFR 60-271(b)(3) currently requires contractors to perform in-depth analysesthat include an analysis of their compensation system(s) to determine

whether there are gender, race or ethnicity-based disparities

Directive 307 reinforces this (2/28/2013)

Pay Gap - heightened focus of OFCCP and EEOC

Pending EEO-1 revised reporting requirements

Do it before the OFCCP letter arrives!


Do It!

Minimizes the risk of possible

plaintiffs’ claims under the Lilly Ledbetter Fair Pay Act, other

equal pay regulations and scrutiny during OFCCP audits

Assists your company in discovering

whether hiring and retention issues may be

related to compensation

Assure that you policies address starting salary,

merit increases, bonuses,

overtime – and that these are

applied consistently

Comprehensive analysis should be conducted

under as much attorney/client

privilege as allowable by law


Where a wage difference may exist: can your records defend and prove that the difference is based on genuine business

reasons, related to job requirements and characteristics,and is not based on gender, race, ethnicity, etc.?

Wage Difference

Go beyond the market survey data: drill down andreview employees in similar job titles or

within groups of employees doing similar work


Compensation Information Request#19 on Audit Letter

Employee ID# Gender Race/Ethnicity Date of Hire

Date of last change in grade, job title

or position

Job Title &Job Group

Department F/T or P/T

Exempt or Non-Exempt

Salary Grade or Code

Base Salary orWage Rate

Hours worked (typical) week

Overtime Pay Bonus Pay Incentive Pay Shift Differential Pay

Commission(if applicable)

Merit Increase Location Annotate Union

(if applicable)


Hiring team doesn’t know difference between “job seeker” and “applicant”


8/2016 – Colonial Parking pays $250k to settle allegations of pay discrimination. Allegeddiscrimination against black applicants and paying black parking valet attendants less thancomparable Hispanic employees

Recent OFCCP Cases

7/2016 – Div. of Norfolk Southern will pay $492K to African-American applicants due to allegedrace-based hiring discrimination in the laborer position

6/2016 – Aqualon (subsid. of Ashland) will pay $175K in alleged failure to provide 660 AfricanAmerican applicants for entry-level transition operator positions

7/2016 – Jennie-O-Turkey Inc. agreed to hire 53 women and will pay $491,861 in back wages to339 female job applicants for allegations of denied entry-level jobs

11/2015 – G&K Services, Inc. will pay more than $1.8-million for systemic hiring and paydiscrimination to 444 female employees steered to lower paying jobs


Class Member Locator(a new OFCCP “tool” on their website)

Current or former employees can go to the websiteand look at the list of contractors who have beenaudited and charged with discrimination and add

themselves to the pending class action lawsuit

OFCCP Member Locator


“Internet Applicant”

The contractor considers the individual for employment in a particular position

The individual’s expression of interest indicates the individual possesses the basic qualifications for the position; and,

The individual at no point in the contractor’s selection process prior to receiving an offer of employment from the contractor, removes himself or herself from further consideration or otherwise indicates that he or she is no longer interested in the position.

The individual submits an expression of interest in employment through the Internet or related electronic data technologies


Application Flow Data

• A non-discriminatory data management technique can control the number of job seekers you review for each position

• Your applicant flow charts must show all applicants that were considered for the open position…whether they were interviewed or not

• You must show a (defendable) reason for rejection of every applicant


Poor ornon-existent records


A contractor is presumed non-compliant unless it can prove, by its record-keeping, that it is in compliance.

Important!


Personnel Decisions

Records should prove non-discriminatory reasons for selection of:

Applicants Interview

HirePromotions

TerminationsBonuses,

% increases, overtime

↓

↓


Importance of Training

One of the best investments a company can make is to train their recruiters, hiring managers and HR staff on:

OFCCP regulations and requirements

How to properly review and dispose of applicants

How to write good, defendable records to supportall personnel decisions and selections

Interviewing skills and questions they can and cannot ask


Questions for Grace?


Portnoy, Messinger, Pearl & Associates, Inc. (PMP)

“Educate don’t Litigate”

PMP is proud to be celebrating its 52nd year of providing clients with practical guidance on all aspects of the employer/employee relationship. PMP is a unique HR outsourcing firm. Our staff consists of both HR subject matter experts and labor attorneys. This combination of HR Professionals and staff labor attorneys helps clients navigate through the maze of regulations and laws governing the workplace in a very cost effective way.

PMP provides services to a broad spectrum of clients in both the public and private sector, union and non-union, including small local businesses and multinational Fortune 500 companies.

Follow PMP on social media and sign up to receive our free monthly HR Update electronic newsletter by visiting us at: http://www.pmphr.com/contact-us.html


America’s Job Exchange has been a pioneer in online recruitment and compliance from the very beginning, having evolved from America’s Job Bank which was

founded by the Department of Labor in 1995. We keep true to the original mission of America’s Job Bank assisting Federal Contractors meet OFCCP regulations for

online job postings and distribution.

OUR MISSION

We believe that a diverse workforce is beneficial to every company and its employees. Our mission is to provide the best tools, resources and

information to connect employers and diverse job seekers.

About America’s Job Exchange


We Support Our Customers

AJE’s OFCCP Audit Team is led by Gary Cowan, 25+ years with the Department of Labor

as an auditor, trainer and director

Beginning to end audit support:

• Coordinate with OFCCP auditors, attorneys and AAP providers

• All audit requests are responded to within one business day

Audit reports include:

• Job Summary Reports (PDF and excel)

• Job Summary Distribution Reports

• Individual Job Reports

• Outreach Reports

• AAP Summary Reports

Individual Reports include:

• Copies of every mail sent to One Stop Career Centers and CBOs

• State website posting verification number for every job

• Screenshots of jobs posted to diversity partner websites

Summary Reports include:

• Complete distribution summary

• Links to individual reports

• List of all organizations that receive jobs

All reports and records are retained indefinitely.


Grace M. ContiExecutive VP & Director,Affirmative Action Compliance Department

[email protected]

Contact Information


Gary CowanDirector of Compliance, America's Job Exchange

[email protected](o) 978-946-7928(c) 617-997-6477www.americasjobexchange.com

Contact Information


Our Webinars Have Gone Monthly

AAP’s are fixed documents with standards and requirements. Contractors are challenged with the many steps involved in executing these plans. We can help you manage the steps involved!

How to Properly Implement aCompleted Affirmative Action Plan

Chris LindholmVice President of Compliance

OutSolve

Presenters

Tune into our next webinar to find out how managers can remove the gray areas implementing Affirmative Action Plans.

October 18, 2016 1:00-2:00pm ET

Jeremy MancheskiPrincipal and Founder

OutSolve


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OFCCP Audits5 Reasons They Fail

September 20, 2016

Speakers:

Gary CowanCompliance Director

America's Job Exchange

Grace ContiPortnoy, Messinger, Pearl &

Associates, Inc.

Copyright, 2016

America’s Job Exchange is recognized by SHRM to offer Professional Development Credits (PDCs) for the SHRM-CP(SM) or SHRM-SCP(SM) . This program is valid for 1 PDC (Activity ID: 16-J0RIK) for the SHRM-CP(SM) or SHRM-SCP(SM) . For more information about certification or recertification, please visit www.shrmcertification.org.

http://www.shrmcertification.org/


OFCCP Audits5 Reasons They Fail

September 20, 2016

Speakers:

Gary CowanCompliance Director

America's Job Exchange

Grace ContiPortnoy, Messinger, Pearl &

Associates, Inc.

Copyright, 2016

This program, Activity ID: 293641, has been approved for 1.0 (General)recertification credit hours toward PHR, SPHR and GPHR recertificationthrough the Human Resource Certification Institute (HRCI). Please be sure tonote the program ID number on your recertification application form. For moreinformation about certification or recertification, please visit the HRCertification Institute website at www.hrci.org.

The use of this seal is not an endorsement by the HR Certification Institute of the quality of the program. It means thatthis program has met the HR Certification Institute’s criteria to be pre-approved for recertification credit.

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ofccp audits - 5 reasons they fail

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