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 APTMetrics A SHRM Webcast presented by: Kathleen K. Lundquist, Ph.D. APTMetrics David S. Fortney, Esq., & Leslie E. Silverman, Esq. Fortney & Scott,

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Presentation on theme: " APTMetrics A SHRM Webcast presented by: Kathleen K. Lundquist, Ph.D. APTMetrics David S. Fortney, Esq., & Leslie E. Silverman, Esq. Fortney & Scott,"— Presentation transcript:

1  APTMetrics A SHRM Webcast presented by: Kathleen K. Lundquist, Ph.D. APTMetrics David S. Fortney, Esq., & Leslie E. Silverman, Esq. Fortney & Scott, LLC The Pay Gap: New Agency Trends in Enforcement

2 Important Legal Notice This presentation is to provide general information and updates regarding rights and obligations. These materials are not intended to provide legal advice. Employers and federal contractors should consult either with their in-house counsel or, as directed, with an experienced employment law attorney for legal advice about whether, based on their specific facts and circumstances, their company complies with the applicable federal and state laws. 1


4 3 How Big is the Gender Pay Gap? Median earnings of full-time (>35 hrs/wk) workers77% Average weekly wages of full-time workers81% Average weekly wages for 40+ hrs/wk workers87% Median earnings for those with same education, experience, racial composition, industry, occupation & union coverage (Blau & Khan, 2007)91%

5 4 The Pay Gap and Race/Ethnicity Source: US Bureau of Labor Statistics, December 2014 Median Weekly Earnings, by Race/Ethnicity and Gender, 2013

6 The Legitimate Role of Compensation  Pay for Performance  Pay Based on Market for Talent  Relative Experience/Education  Retention of Talent  Total Compensation Considerations  Similarities and Differences Among Jobs 5

7 Polling Question #1 What Plays a Big Role in Compensation for your Organization? Performance Market Surveys Manager Discretion Starting Salary I don’t know! 6

8 The Legal Framework for Evaluating Compensation Discrimination 7

9 Title VII and Equal Pay Act Both laws are enforced by the U.S. Equal Employment Opportunity Commission (EEOC). Title VII makes it unlawful to discriminate in pay and benefits based on a protected characteristic. The Equal Pay Act protects sex-based wage discrimination between men and women in the same establishment who perform jobs that require substantially equal skill, effort and responsibility under similar working conditions. 8

10 Executive Order 11246 Enforced by the U.S. Department of Labor’s Office of Federal Contract Compliance Programs utilizing Title VII standards. Prohibits federal contractors from discriminating in employment decisions on the basis of race, color, religion, sex, sexual orientation, gender identity or national origin, and requires contractors to take affirmative action to ensure that equal opportunity is provided in all aspects of employment. “Employment Decisions” extends to rates of pay or other forms compensation. 9

11 Recent Agency Litigation and Settlements 10

12 Polling Question #2 Is your company currently undergoing an audit by the OFCCP related to pay? No Yes, for limited locations or a small number of jobs Yes, companywide I have no idea! 11

13 Sterling Jewelers: Equal Pay Claims Arbitration case with class certification to approximately 44,000 current and former Sterling store managers to sales associates. Class claims allege that Sterling’s pay and promotion practices have had an adverse effect on women. Appeal possible. Litigation claims by EEOC dismissed – Agency failed to conduct a sufficient pre-suit investigation to justify a nationwide pattern and practice lawsuit. EEOC v. Sterling Jewelers (W.D.N.Y. 2014). Appeal pending. Takeaways: Private parties are pursuing cases in arbitration. EEOC procedural requirements will affect the Agency’s ability to pursue claims. 12

14 EEOC v. Port Authority of NY and NJ EEOC brought a Equal Pay Act action alleging that Port Authority’s non-supervisory female attorneys were paid less than male counterparts. Second Circuit ruled that EEOC failed to support its claim because it did not sufficiently allege the jobs compared were “substantially equal.” Takeaway: EEOC may not rely on generalized comparison of jobs. It must prove that the specific content of the jobs is substantially equal through discussion and analysis of particular job duties. 13

15 OFCCP and Steering California Laundry Company (Nov. 2013). 59 women were “steered” into lower paying “light duty” positions while 331 men were not considered for “light duty” positions. Settled with $265,983 back pay to the women. Louisiana Parking Company (Sept. 2014). 104 women “steered” into cashier positions rather than the tipped valet positions. Settled with payment of $100,000 in back wages and interest to female class members. Takeaway: Job selection and job assignments may be challenged by the OFCCP as unlawful steering as part of the agency’s compensation enforcement program. 14

16 OFCCP’s Recent Settlement of Individuals’ Compensation Complaint Maryland University (Jan 2015). Press release states the investigation began with a complaint alleging hostile work environment and during the investigation, another complaint came forward alleging pay discrimination. To settle the allegations of race and retaliation, the University will pay $359,253, that includes back pay, interest and damages. The settlement was with the OFFCP and EEOC. Takeaway: OFCCP investigations can implicate both OFCCP and EEOC charges and remedies. 15

17 EEOC and OFCCP Initiatives EEOC and OFCCP share enforcement training initiatives and have begun sharing complaint information through their revised MOU (revised 11/9/11). Both agencies are planning to routinely collect employer compensation data: OFCCP “Equal Pay Report.” EEOC Compensation Collection Pilot. 16

18 OFCCP Additional Steps on Compensation OFCCP in particular has been at the forefront of compensation initiatives: Revised scheduling letter contains requirement to provide robust pay data at onset of audit. Review compensation during audit in conjunction with litigation- style follow up requests and interviews with compensation managers. Use of undefined “pay analysis groups” as provided in Directive 307 issued in 2013. 17

19 Reviewing Your Pay Practices 18

20 Current Individual Compensation Is the cumulative outcome of multiple employment decisions Begins with starting salary determination Ameliorated or exacerbated by decisions on: Transfers Promotions Demotions Merit increases 19

21 20 Factors Impacting Current Compensation Large number of factors considered in setting salaries, therefore traditional adverse impact analysis not sufficient to explain group differences Typically, factors not rigidly combined to determine salary decisions Additional variables considered in analysis must explain GROUP differences Years of Service Time in Grade Education Previous Related Experience Performance Starting Salary Job Content

22 Factors Typically in Pay Equity Regressions Starting Salary Education Previous related experience Job content Salary Planning/Promotions Starting salary Performance Seniority Time in grade Education Business unit Related experience Job content You should consider job content as an aggregation group, NOT a variable. 21

23 Methodology for Job Content Grouping Identify job titles and relevant variables Develop initial job family structure Analyze information on job content, required education and experience Apply to specific population Follow-up interviews/data collection with job experts on unclear assignments Define final scope and rationale of job content group 22

24 Practice Points for Evaluating Pay 23

25 For Your Investigation … Does your organization: Link compensation to job performance? Group jobs with different content into the same pay grade or analysis group? Have consistent, well-articulated, transparent standards for making compensation decisions? Periodically self-audit the organization’s pay structure? Routinely evaluate employees’ compensation for evidence of disparities? 24

26 For More Information: APTMetrics, Inc. Kathleen K. Lundquist, Ph.D. One Thorndal Circle, Second Floor Darien, CT 06820 203.655.7779 tel 203.655.8288 fax Fortney & Scott, LLC David S. Fortney, Esq. Leslie E. Silverman, Esq. 1750 K Street, NW, Suite 325 Washington, DC 20006 202.689.1200 tel 202.689.1209 fax 25

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