Tucked away in OFCCP’s regulations, “Additional required elements of affirmative action programs,” is one weighty requirement: “The contractor must evaluate: Compensation system(s) to determine whether there are gender-, race-, or ethnicity-based disparities.” (41 CFR § 60-2.17(b)(3)) In recent years, OFCCP has committed considerable resources into enforcement of this requirement by hiring a team of highly-skilled statisticians and labor economists, which can be intimidating to even the largest of contractors. Those efforts have produced results in the way of significantly larger settlements for compensation discrimination. Compounding the difficulty to comply with this regulation, OFCCP does not provide the criteria it uses in the desk audit to flag compensation for regression by a statistician. While OFCCP recently released some details of its process for conducting compensation reviews, they were hardly a road-map for an initial[1] analysis (the Directive listed some technical explanations of the ways OFCCP runs a regression analysis[2].)

The Problem

How can contractors run an analysis similar to OFCCP’s initial desk audit compensation analysis and work to resolve indicators prior to an audit to reduce the chance OFCCP will need to run regression analyses if OFCCP does not release its initial analysis methodology?

Our Solution

Kairos is launching a new Compensation Analysis Report designed to provide your company with the indicators OFCCP would calculate in a desk audit. Designed by our former OFCCP Compliance Officer, the reports highlight any significant differences that exist by job group, job title, and any other pay analysis group (as needed).

Compensation can seem too complex to tackle – it is complex. That’s why OFCCP leaves those analyses to PhD-level statisticians when initial desk audits show significant indicators. Kairos’ goal with these analyses is to help your company avoid getting to that point! Take the first step toward compliance today by reaching out to Kairos staff for more information, pricing, and sample compensation reports.

[1] The analysis a compliance officer conducts in the desk audit used to determine the need for further analysis.
[2] A statistical technique in which more than one variable (e.g. tenure, education, department) is used to predict compensation.