Federal contractors facing discrimination audits won’t get a free pass, despite changes to give businesses more say in the probes, Labor Department official Craig Leen told Bloomberg Law.
“Our goal is not to tell companies how to pay people,” Leen, who runs the DOL’s Office of Federal Contract Compliance Programs, said in an April 10 interview. “Our goal is to come up with best practices and also to take a fair look at those pay systems, point out where disparities are occurring, and require companies to correct those disparities.”
The OFFCP enforces pay, hiring, promotion, and other discrimination protections for workers employed by federal contractors, largely by auditing company employment data. That gives the Labor Department significant power to police the pay practices of some of the biggest names in tech, finance, and defense, among other industries.
Leen in August issued a directive stating that auditors will allow contractors to determine which workers are “similarly situated” for pay comparison purposes, so long as those groupings are “reasonable.” Critics say that will let companies skirt pay equity requirements by effectively doing their own audits.
“The idea that the company can decide who is similarly situated is essentially giving a free pass for discrimination,” said Adam Pulver, an attorney for Public Citizen. “This is one of several areas across the administration where we are seeing a move allowing regulated entities to self-regulate.”
The OFCCP retains the right to reject a contractor’s proposed pay grouping, Leen said. He also said his predecessors in the Obama administration focused too heavily on pay data for large groups of workers without taking the time to understand the company’s justification for certain differences in pay.
“I don’t think there’s any problem with having large aggregations of employees to see if there are trends,” Leen said. “But we can’t make a finding, in my opinion, based solely on these very large pay analysis groups.”
The Labor Department is locked in ongoing legal disputes with
The OFCCP is working on additional pay grouping guidance in the form of “frequently asked questions,” Leen said. It also plans to roll out examples of reasonable pay groupings for a handful of industries.
More Enforcement Expected
The OFCCP this year doubled the number of contractors receiving notices of a possible audit. The list includes Oracle,
At the same time Leen is instructing investigators to wrap up those probes quicker than in the past.
Leen aims to limit to 45 days the time it takes to complete initial “desk audits.” He said he’s putting a six-month cap on conciliation negotiations to resolve cases in which the OFCCP finds evidence of discrimination. That’s likely to mean more cases that can’t be resolved in that time frame are referred to the DOL solicitor’s office for enforcement.
“My expectation is that companies will work with us—because we’re being reasonable—and try to reach a resolution,” Leen said. “But, yes, if we’re going to be doing shorter conciliations there will be more referrals to enforcement.”
Some lawyers for contractors have expressed concerns about the conciliation process. Bloomberg Law reported in October that Labor Secretary
Leen declined to comment on the Microsoft case. He did, however, make clear that he has the final say on conciliation agreements the OFCCP reaches with contractors before a case is referred to Solicitor
“If we reach a conciliation agreement and I’m involved in that conciliation agreement, they can stand by that,” Leen said.
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