Early indications point to renewed OFCCP focus on compensation discrimination audits. Kairos encourages you to begin analyzing your compensation data now.
On February 2, 2021, Google agreed to pay $3.8 million to settle compensation and hiring claims stemming from an OFCCP audit ($2.6M for compensation and $1.2M for hiring). Last Thursday the Paycheck Fairness Act was reintroduced in the House of Representatives as H.R. 7, proposing the OFCCP collect compensation data and other employment-related data (including hiring, termination, and promotion data) for at least 50% of federal non-construction contractors annually, and use that information to identify establishments for further evaluation. While this bill was last passed by the House in Spring of 2019, it never received a Senate vote. Given the shift in the majority of the Senate and new administration, this bill has a higher probability of becoming law.
Federal contractors must annually evaluate their compensation system(s) to determine whether gender, race, or ethnicity-based disparities exist. If compensation disparities are identified, the contractor must determine whether disparities are the result of discriminatory employment practices. If discriminatory practices are identified, the contractor must develop and execute action-oriented programs designed to correct problem areas. If disparities are determined to be the result of non-discriminatory practices, the company must retain records of their analyses and subsequent findings. Failure to analyze compensation for race and gender-based equity may expose your company to financial risk in an OFCCP compliance audit. If no analyses are currently conducted, Kairos can provide compensation analyses which will help to identify issues OFCCP might uncover in an audit.
As always, if you have questions, feel free to contact us by email or call 972-369-0015.