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  • Pay Discrimination will be Targeted by the OFCCP

    The “buyers’ market” that is driving (and disrupting) the compensation strategies for many employers these days may have multiple lingering effects. Some are easily identifiable, including higher salary budgets, added employee benefits, extraordinary recruiting efforts and panicked attempts to retain good employees in the face of a highly-competitive job market.

    One other critical and sustainable effect employers should be extremely mindful of is pay inequities. One of the root causes of pay inequities has long been desperation hiring that does not fully take into account the organization’s compensation plan and instead focuses on meeting a business demand.

    Almost all states have some form of pay equity laws in place. Now, the Office of Federal Contract Compliance Programs has announced that they will be using the EEO-1 Component 2 compensation data to investigate potential discrimination.

    For a detailed overview of this recent development, please continue to our blog.

    OFCCP to Analyze EEO-1 Compensation Data

    On September 2, 2021, the Office of Federal Contract Compliance Programs (OFCCP) issued a notice (https://bit.ly/3CCFbl2) announcing it intends to analyze the EEO-1 Component 2 compensation data submitted by employers in 2019. The Component 2 data consists of aggregated employee wage and hours worked data, categorized by EEO-1 classification, race, ethnicity, and sex. The OFCCP will now evaluate whether the data can aid the agency in investigating potential pay discrimination—a priority under the Biden administration—and selecting contractors for compliance evaluations.

    The announcement is a reversal of the OFCCP’s position regarding Component 2 data during the Trump administration. In 2019, the agency issued a notice stating it would not “request, accept, or use Component 2 data, as it [did] not expect to find significant utility in the data given limited resources and [the data’s] aggregated nature.” The OFCCP’s recent announcement rescinds the 2019 notice, calling it “premature and counter to the agency’s interests in ensuring pay equity.”

    Administration Announces $11.25 Minimum Wage

    While the Biden administration is finalizing the regulations to implement its $15 minimum wage for certain federal contractors, it announced that under President Barack Obama’s minimum wage Executive Order, covered federal contractors will be required to pay covered employees $11.25 per hour, up from 2021’s $10.95 per hour (https://bit.ly/3u1sTiU).

    Updated EEO Census Data Available

    On March 2, 2021, the U.S. Census Bureau released the 2018 EEO Tab to the public. It replaces the 2006-2010 EEO Tab the agency and covered federal contractors currently use. Contractors must begin using the 2018 tab to develop all affirmative action plans (AAPs) that commence on or after January 1, 2022. The OFCCP will likewise begin using the 2018 EEO Tab to evaluate contractors’ AAPs commencing on or after January 1.

    The 2018 EEO Tab has some significant differences. First, it has only seven race and ethnicity categories, with only one Hispanic category. It also eliminates the two-or-more race category and replaces it with “Balance of not Hispanic or Latino.” In addition, the number of occupation codes has been substantially reduced.

    The OFCCP recently held a webinar to explain the new data and the issues with which contractors may have to deal. For more information, go to https://bit.ly/3AxfEJb.

    OFCCP Files First Lawsuit in Biden Administration

    The U.S. Department of Labor (DOL) filed an administrative complaint against ABM Janitorial Services after a compliance evaluation by the OFCCP alleged systematic race discrimination against black and a smaller number of white applicants for janitorial positions at its Baltimore, Maryland, and Alexandria, Virginia, locations.

    Filed on September 15, the complaint alleges that since at least 2015 and continuing to the present, ABM Janitorial Services has discriminated against black workers for cleaning positions at all three of its facilities and white workers at one of the facilities. The complaint also alleges the employer failed to document hiring decisions properly, which masked its discriminatory hiring practices.

    The DOL’s complaint seeks an order that would compel ABM Janitorial Services to provide relief to affected workers and would bar the company from obtaining any new federal contracts if it fails to follow a court order to come into compliance.

    OFCCP Issues New Construction CSAL

    On September 1, 2021, the OFCCP issued a new Corporate Scheduling Announcement List (CSAL) for construction federal contractors (https://bit.ly/3u4kM53). In September 2020, the agency issued a CSAL for 200 construction contractors that were to be scheduled for construction compliance checks. Although the OFCCP removed the compliance checks and focused reviews from the supply and service 2020 CSAL, it did not remove the construction compliance checks and has specifically responded in an FAQ (https://bit.ly/3u3MMWH) that it plans to schedule the construction compliance checks. The construction contractors on the 2021 CSAL list, however, will be subject to a full compliance review using the new construction scheduling letter (https://bit.ly/3EHlgTD).

    1. Juanita Beecheris an attorney with Fortney & Scott, LLC,in Washington, D.C. Beecher is a nationally-recognized expert on Office of Federal Contract Compliance Programs and U.S. Equal Employment Opportunity Commission matters. She is Counsel to Fortney & Scott, LLC with a focus on OFCCP regulatory affairs. Ms. Beecher’s primary focus is labor and employment law with substantial experience with class investigations by the EEOC and OFCCP. She has more than 30 years of experience in labor and employment law particularly with class investigations by the OFCCP and the EEOC. You can reach her at nbeecher@fortneyscott.com.