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Friend or Foe?
Recent months have delivered to employers what could be seen as a nasty one-two punch. First, the Office of Federal Contract Compliance Programs (OFCCP) announced that it planned to focus its resources on “rooting out” systemic discrimination — and unveiled proposed guidelines completely altering the way it will analyze potential compensation discrimination. The new guidelines, which require employers of a certain size to use a statistical tool called multiple regression analysis, will be enforced by a team of statisticians the OFCCP has newly hired to create the ominous-sounding Division of Statistical Analysis. Second, the recent Supreme Court decision allowing disparate impact claims in age cases could be interpreted as giving the green light to additional age-bias lawsuits by removing the hurdle of proving or even alleging intent. However, these changes will not necessarily have an adverse impact on employers, and may actually be helpful.
The OFCCP
At first glance, this new era in statistical analysis could appear to be a major headache for employers when the OFCCP comes knocking on the door, particularly given its focus on announcing statistics like an obtained 31% increase in financial remedies, and the slide-rule-wielding statisticians from the new DSA waiting to use arcane tests to determine guilt. But first glances can be misleading. While the announcements of money recovery and slide rules are not good news for employers, the OFCCP's announcement does: 1) signal a move away from the arbitrary pay grade analysis used in the past; and 2) establish guidelines so that employers know the type of analysis the OFCCP expects and will credit. Put another way, the OFCCP is moving to a more realistic way of examining compensation and is telling employers in advance just what they need to do to be in compliance. That sort of knowledge, obtained outside of an audit, is invaluable.
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