• Research Confirms OFCCP Compensation Settlements and Conciliations on the Rise
  • May 20, 2013 | Author: Matt Allen Decker Nusbaum
  • Law Firm: Proskauer Rose LLP - Washington Office
  • Research published by the Center for Corporate Equality (CCE), a Washington, D.C. research organization, reveals that the number of OFCCP audits resulting in a conciliation agreement has risen sharply under the Obama administration.

    CCE compiled information from the Labor Department’s enforcement database as well as documents obtained through Freedom of Information.  Their research revealed that, during the Bush administration, only approximately 8 percent of all OFCCP audits ended in a conciliation agreement.  By contrast, the average during the Obama administration so far is close to 21 percent.  Findings of discrimination overall did not increase significantly during this period.  Between 2004 and 2008, the second term of Bush’s administration, 1.58 percent of all compliance evaluations resulted in a finding of discrimination, compared to 2.27 percent under the Obama administration so far—a rise of just 0.7 percent.

    CCE also reported that findings of compensation discrimination OFCCP have risen markedly in recent years.  In 2010, OFCCP found discrimination based on pay in just 15 audits.  That number nearly doubled to 27 in 2011 and rose again to 31 in 2012.  Interestingly, the number of pay discrimination violations varied widely by region.  The vast majority of the pay discrimination cases in 2012 were concentrated in OFCCP’s Southeast region with 13, and the Pacific region with 9.  The Midwest regional office reported no pay discrimination determinations in 2012.

    According to CCE, the majority of compensation settlements were not based on statistical analyses of compensation at the job or job group level.  Rather, OFCCP typically relied on a handful of employees with unexplained compensation disparities to support their findings of compensation discrimination.  The average pay discrimination conciliation payment in 2012 was $12,000.  

    OFCCP issued Compensation Directive No. 307 earlier this year, signaling a renewed focus on compensation disparities.  CCE’s research confirms what the federal contracting community already knows: OFCCP is not using its regulatory authority merely to confirm that they are in technical compliance with OFCCP compliance obligations.  Rather, they are closely “checking under the hood,” using new tools and resources to attempt to uncover substantive violations.