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Kayo Sady

Kayo G. Sady, Ph.D.

Associate Principal Consultant
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Kayo G. Sady, Ph.D., is an Industrial/Organizational Psychologist and Consultant at DCI Consulting Group where his practice centers on employee selection and compensation equity evaluation. Kayo’s primary areas of expertise are employee selection measures, validation strategies, compensation practices, and quantitative methods in the equal employment context.
Dr. Sady received his M.A. and Ph.D. in Industrial/Organizational Psychology with a concentration in quantitative methods (statistical analysis) from the University of Houston. Prior to joining DCI Consulting Group, Kayo worked at Valtera Corporation (now CEB Valtera) as a Consultant in the Assessment and Selection Group. At Valtera, Kayo managed validation projects employing criterion-, content-, and construct-validation strategies and advised clients based on complex HR risk management analytics. His work at DCI Consulting Group has expanded to include questions of compensation equity and services related to expert consulting in EEO litigation and OFCCP audits.
Kayo is a regular presenter on EEO and other personnel selection matters at national conferences such as the annual SIOP and NILG conferences. He is a co-editor and contributor to a recently published volume titled Practitioner’s Guide to Legal Issues in Organizations. This edited book includes guidance on a range of topics including validation research, disparity analyses, job analysis, pay equity research, and other legally sensitive HR issues. In addition to his consulting practice, Kayo serves as an adjunct faculty member at University of Maryland, Baltimore County where he teaches graduate courses in both Introductory and Advanced Statistics.

Kayo Sady ’s Recent Posts

A September 26th OFCCP News Release indicated that OFCCP is suing Palantir Technologies for systemic discrimination against Asian job applicants in three job titles: Quality Assurance Engineer, Software Engineer, and Quality Assurance Engineer Intern. A couple of interesting issues related to the administrative complaint are:

  • Surprisingly, the referent group was identified as “non-Asian applicants”. As you may recall, in the 2013 OFCCP v. VF Jeanswear ruling, the ALJ noted that “non-Asian” is neither a race nor an ethnic group defined by EO 11246 and the Uniform Guidelines on Employee Selection Procedures. Why or how is OFCCP litigating a matter that has already been decided as a matter of law by an ALJ?
  • Selection rates were very low, based on OFCCP’s numbers reported in the Press Release. They ranged from less than 1% for the Quality Assurance Engineer to just over 2% for the Quality Assurance Engineer Intern. When applicant numbers are large and selection rates low, small absolute differences in total selections across protected class subgroups can produce statistical disparities.
  • This case underscores the importance of good record keeping and use of appropriate disposition codes. A total of 7 QA Engineers were selected from among 730 qualified applicants. Of the 562 Asian applicants, one was hired. It is surprising to see such a high number of qualified applicants. This may be a reflection of inaccurate/incomplete disposition codes and/or a failure to appropriately apply the Internet Applicant Rule (e.g., Asian applicants not meeting minimum qualifications may have been included as part of the applicant pool).
  • Employee referrals were given preference. However, according to the OFCCP, the referral system disproportionately excluded Asians. Although a referral program can serve as a great recruitment and selection source, as with any other selection tool, periodic monitoring and analysis is crucial to identify if there is disparate impact. Such monitoring is especially pertinent if demographic diversity is limited or certain groups are underutilized in particular roles.

Our observations related to this case are not likely new revelations to federal contractors. Rather, they serve to remind clients of recruitment, selection, and data management best practices and to highlight the very real consequences of not employing them. Stay tuned as this case develops!

By Yevonessa Hall, Senior Consultant and Kayo Sady, Senior Consultant at DCI Consulting Group

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The 34th Annual Conference for the National Industry Liaison Group was held August 2-5, 2016 in Charlotte, NC. This conference brings together members of the federal contractor community, including practitioners, employers, and OFCCP/EEOC officials. The main focus on this year’s conference was around compensation equity in light of proposed changes to the EEO-1 report, enforcement activity priorities, the socio-political climate, and the abundance of state equal pay laws being passed. One of the most intriguing sessions was presented by EEOC Commissioner Victoria Lipnic, who did not advocate or vote for the increased burdens represented by the new pay addition to the EEO-1 report. Commissioner Lipnic did not believe that the proposed regulations would cause significant change on the gender wage gap. She noted that the benefits of pay data collection in the format prescribed by the EEO-1 report were outweighed by the burden the data collection placed on contractors.

DCI Consulting Group staff members were well represented in a number of high profile presentations and also attended a variety of other sessions. Notable session summaries and highlights can be found below.

Things You Didn’t Think Were a Selection Test: Practical Selection for Federal Contractors

This session clarified what types of employment procedures are considered “tests” and provided practical guidelines to create valid selection tools and procedures. The audience left the session with a firm understanding of what constitutes a selection test, strategies for creating successful tests, as well as practical implementation take-aways.

Presenters: Joanna Colosimo (DCI Consulting Group), Laura Fields (Wells Fargo), Shannon Kobus (Monster Gov’t Solutions), Kristen Pryor (ICF)

Update on Contemporary OFCCP Enforcement: A View from 2015 Settlement Data

In a typical year OFCCP conducts around 4,000 compliance evaluations that result in tens of millions of dollars in back pay and benefits for tens of thousands of American workers. However, these summary data describe only a small part of the agency’s overall enforcement picture. Each year a FOIA request is submitted to obtain all OFCCP settlements and a review is done on every OFCCP settlement. This presentation detailed the results of FY 2015 data and trends over time.

Presenter: David B. Cohen (DCI Consulting)

It WAS All About the Base (Pay)

Pay analyses that are “all about the base” may fail to uncover issues that are increasingly on OFCCP’s radar. Contractors are asked to submit factors beyond base pay, such as bonus, incentive, and overtime. Contractors are also encountering frequent requests for compensation interviews and must consider strategies for analyzing compensation and communicating with OFCCP. This panel discussed recent trends, common pitfalls and best practices from the legal, researcher and practitioner perspective.

Presenters: Mike Aamodt (DCI), Joanna Colosimo (DCI), Michelle Duncan (Jackson Lewis), Rick Holt (Resolutions Econ)

Compensation, Compensation, Compensation: How to Survive an OFCCP Compliance Evaluation

A panel of compensation experts discussed the OFCCP’s approach to compensation as well as the impact these changes are now having on compliance audits. “The Davids” discussed their experience in OFCCP compliance evaluations and their recommendations to clients. The presentation was fast- paced, practical and fun. The presentation had both legal and practical aspects and provided the participants with valuable takeaways to use after the conference.

Presenters: David S. Fortney (Fortney Scott), David Cohen (DCI), H. Juanita M. Beecher (Fortney Scott)

We Might be Paid Differently, But Are Our Jobs Really the Same?

Determining which jobs are similar enough to group in a pay equity study is an important, and often contentious, part of proactive analyses and OFCCP audits. Furthermore, laws such as the California Fair Pay Act have made the determination of “similarly situated” or “substantially similar” even more important. This presentation reviewed case law and job analysis methods to provide guidance on how to determine if jobs are similar enough to combined or compared.

Presenters: Mike Aamodt (DCI Consulting) and Kayo Sady (DCI Consulting)

 

By Joanna Colosimo, Associate Principal Consultant, and Kayo Sady, Senior Consultant, at DCI Consulting Group

 

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Based on feedback at NILG, we thought our clients may have interest in some background research that we shared in our NILG session: We Might be Paid Differently, But Are Our Jobs Really the Same? A significant portion of the presentation focused on the results of an Equal Pay Act and Title VII case law review. In particular, we presented a summary of court rulings related to what constitutes similarly situated with respect to the work performed, responsibility level, and the skills and qualifications required of a job. (Our readers may recognize this language as the definition of similarly situated as defined by Title VII of the Civil Rights Act of 1964.) The results below may come as a surprise:

  • Employees in different job titles have been found to not be similarly situated. No surprise there.
  • Employees in the same job title have been found to not be similarly situated. Similarly situated cannot be directly inferred from job title. A job title would have to reflect true similarity in work performed, responsibility, skills, and qualifications.
  • Employees in different, but similar, job titles have been found to be similarly situated. As noted above, if job titles do not meaningfully differentiate positions in terms of work performed, responsibility, skills, and qualifications, individuals across titles may be combined. This is the only instance in which individuals from different titles were allowed to be combined in an analysis.

The take home conclusion? Under a Title VII standard, the basis for combining individuals into a group for pay analysis must be similarity in work performed, responsibility, skills, and qualifications. Pay Analysis Groups that contain such dissimilar jobs as accountants and engineers are not likely to be considered by the courts to be considered similarly situated.

By Kayo Sady, Senior Consultant, and Mike Aamodt, Principal Consultant, at DCI Consulting Group

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Two recent OFCCP settlements emphasize the importance of monitoring adverse impact throughout all steps of the hiring process: Gordon Food Service (GFS) and The Aqualon Company.

GFS, a food distribution company, implemented a hiring process that included a strength test that resulted in adverse impact against women seeking entry-level laborer positions. Lacking validation evidence in accordance with the Uniform Guidelines on Employee Selection Procedures (UGESP), GFS settled with OFCCP. As part of the conciliation agreement, GFS will hire 37 women, pay $1.85 million to impacted applicants, and stop using the strength test until it can be properly validated. For more details on this settlement, see our previous blog.

The next settlement focuses on The Aqualon Company, a subsidiary of Ashland Inc. OFCCP alleged discrimination against 660 African Americans who applied for entry-level positions and noted that “Aqualon used a discriminatory test” that “was not job-related” and “did not meet the requirements of UGESP.” As part of the conciliation agreement, Aqualon will pay $175,000 in back pay and interest to the impacted applicants and will hire four of the African American applicants. The organization will also stop using the test and will revise its hiring procedures. See OFCCP’s press release here.

These settlements serve as a reminder that OFCCP will focus on testing cases. As such, it is critical that contractors monitor their selection systems for adverse impact and research the underlying causes of statistical disparities. According to the UGESP, if a statistical disparity is identified for the overall selection process, contractors should evaluate each individual step or point in the hiring process where decisions are made. An individual step that shows statistically significant disparities must have sufficient validation evidence to support the continued use of that step.

By Cliff Haimann, Consultant; Emilee Tison, Senior Consultant; and Kayo Sady, Senior Consultant at DCI Consulting Group. 

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The 31st Annual Conference for the Society of Industrial and Organizational Psychology (SIOP) was held April 14-16, 2016 in Anaheim, California. This conference brings together members of the I/O community, both practitioners and academics, to discuss areas of research and practice and share information. Many sessions cover topics of interest to the federal contractor community, including employment law, testing, diversity and inclusion, big data, and regulations for individuals with a disability. DCI Consulting Group staff members were well represented in a number of high profile SIOP presentations and also attended a variety of other sessions worth sharing. Notable session summaries and highlights can be found below.

 

Beyond Frequentist Paradigms in Legal Scenarios: Consideration of Bayesian Approaches

High-stakes employment scenarios with legal ramifications historically rely on a frequentist statistical approach that assesses the likelihood of the data assuming a certain state of affairs in the population. This, however, is not the same as the question that is usually of interest, which is to assess the likelihood of a certain state of affairs in the population given the data. This session explored the use of a Bayesian statistical approach, which answers the latter question, across different high-stakes employment scenarios. In each of the presented studies, data were simulated and analyzed, and results between the Bayesian and frequentist approaches compared:

  • David F. Dubin, Ph.D., and Anthony S. Boyce, Ph.D., illustrated the application of Bayesian statistics for identifying selection test cheaters and fakers.
  • Chester Hanvey, Ph.D., applied a Bayesian approach for establishing whether jobs are correctly classified as exempt in wage and hour questions.
  • Kayo Sady, Ph.D., and Samantha Holland, Ph.D., demonstrated the advantages of a Bayesian analysis in compensation scenarios with difficult-to-detect subgroup differences.

In each of the studies, the results suggested the utility of a Bayesian analysis in some specific circumstances. Overall, the presenters agreed that the Bayesian analysis should supplement more traditional frequentist analyses and noted specific issues to consider when designing these analyses. Given the lack of legal precedent and difficulties introducing a new set of statistical interpretations into the courtroom, the takeaway was that the best current value-add for Bayesian approaches is in proactive, non-litigation applications.

 

Contemporary Issues in Occupational Credentialing

The opportunity for credentialing or micro-credentialing is ever increasing, with credentials popping up in many professional fields that previously had none. What it takes to develop and maintain these credentialing exams, however, is something that many people know little about. In this session led by Samantha Holland (DCI), panelists from both private and public sector credentialing programs shared their experiences with issues such as maintaining test security, developing test content, and establishing validation evidence for their exams. Some highlights are noted below:

  • John Weiner, from PSI, noted the many security aspects to consider when administering exams online, a situation that requires additional measures beyond those described by other panelists.
  • Rebecca Fraser, from the Office of Personnel Management, shared her experience using methods beyond practice analysis to establish the content domain for specialized, low sample size domains.
  • Lorin Mueller, from the Federation of State Board of Physical Therapists (FSBPT), discussed the need for clearer boundaries when it comes to regulation of certification boards: the line between what is good for a profession, and what is good for business, can sometimes become blurred.
  • Alex Alonso, from the Society of Human Resource Management (SHRM), provided his experiences of building a certification program from the ground up for his organization’s newly minted HR certification program.

 

A View from the Trenches: EEOC/OFCCP Practitioner Update

DCI’s Joanna Colosimo moderated this panel, featuring DCI’s Mike Aamodt, Michelle Duncan of Jackson Lewis, Eyal Grauer of Starbucks, and David Schmidt of DDI, providing an update on recent regulatory changes, enforcement trends, and other topics related to compliance.

In fiscal year 2015, the OFCCP completed fewer compliance evaluations, but the duration of audits has increased as a result of the revised scheduling letter and more in-depth follow-up requests, particularly related to compensation. The panel also discussed the increase in steering allegations and settlements where whites and/or males were the alleged victims of systemic hiring discrimination.

Dr. Aamodt spoke about two hot topics: the EEOC’s proposed pay data collection tool and the use of criminal background checks for employment decisions. With regard to the EEO-1 pay data collection tool, he highlighted the burden of reporting pay data for 10 EEO-1 categories, 12 pay bands, 7 race/ethnicity categories, and 2 sex categories, as well as some of the limitations of using W-2 data. Additionally, he discussed how difficult it would be for the EEOC to use the resulting data to identify pay issues. For employers using criminal background checks, Dr. Aamodt recommended that contractors adopt narrowly-tailored policies that consider the nature of the offense, the duration of time since the offense, and the nature of the job being sought.

 

Strategically Evaluating Outreach for Individuals with Disabilities and Veterans

This session presented research conducted by DCI’s Kristen Pryor, Rachel Gabbard, and Joanna Colosimo to investigate best practices amongst federal contractors in complying with the 503-VEVRAA formal evaluation of outreach and recruitment obligations. Representatives from 77 federal contractor organizations provided survey feedback on current methods and prospective strategies for evaluation. Results identified strategies such as tracking resource specific metrics on qualified referrals and hires as well as ROI analysis for evaluating the success of outreach efforts. Results also suggest general frustration among federal contractors due to insufficient and ambiguous regulatory guidance on this requirement. The full white paper is available here. In addition, DCI will be conducting follow-up research in the near future to determine if further progress has been made in this area, now that the regulations have been in effect for over two years.

 

No Longer an Afterthought? Reasonable Alternatives and Title VII Litigation

DCI’s Emilee Tison moderated this session where panelists discussed their perspectives and experiences related to identifying and evaluating reasonable alternatives. Panelists included Winfred Arthur, Jr (Texas A&M Univ.), Theodore Hayes (FBI), James Kuthy (Biddle Consulting Group, Inc.), and Ryan O’Leary (PDRI, a CEB Company).

Discussion topics included:

  • The Uniform Guidelines text related to the “reasonable effort” in identifying alternatives with “equal” validity and “lesser” adverse impact
  • Strategies for identifying and considering alternatives, including the impact this will have on two selection goals: validity and diversity
  • The potential impact of recent case law on discussions of reasonable alternatives
    • Lopez v. City of Lawrence, 2014
    • Johnson v. City of Memphis, 2014
    • Documenting a consideration of alternative selection procedures

Panelists ended the session with a few parting words, including:

  • Clearly identify what you are considering an alternative
    • Note that not all alternatives are created equally
    • Put in the effort to identify and document your search for alternatives
    • When documenting alternatives, steer clear of ‘stock language’ by providing justification for your choice(s)

 

Competencies and Content Expertise for I/O Psychology Expert Witnesses

In light of recent developments in case law and updated regulatory guidance, panelists provided competencies and strategies for expert witness testimony, focusing on three main topics: social framework analysis (SFA), new measures for test validation, and wage and hour concerns related to revised FLSA regulations on exempt status employees. Panelists included DCI’s Eric Dunleavy and Arthur Gutman, in addition to Margaret Stockdale of IUPUI, Cristina Banks of Lamorinda Consulting, Caren Goldberg of Bowie State University, and David Ross of Seyfath Shaw.

The goal of SFA as it relates to expert witnesses is to educate the court and jury on the processes underlying cognitive bias and other socially constructed concepts like gender inequality. Panelists cited the 2011 Supreme Court case of Walmart v. Dukes as a prime example of applying SFA methodology to diagnose discrimination in personnel practices. Although SFA has been met with some criticism, it can be said that there is a certain degree of subjectivity in many employment processes that have the potential to lead to discrimination. For this reason, experts are encouraged to look at seemingly neutral factors that may have a disproportionate impact on members of a protected group.

Shifting focus to standards regarding test validation, panelists commented on the outdated nature of the Uniform Guidelines on Employee Selection Procedures (UGESP), which have not been updated in nearly 40 years.  Although the panel was not aware of any initiatives to update the guidelines, it was noted that several SIOP representatives have met with the Equal Employment Opportunity Commission (EEOC) regarding the guidelines and other topics of mutual interest. Panelists also advised the audience to rely on both the SIOP Principles and APA Standards as supplemental, more contemporary resources regarding test validation standards. Additionally, SIOP will be publishing a white paper on minimum qualifications and adverse impact analyses that addresses data aggregation concerns and other testing considerations.

The final topic discussed focused on wage and hour issues concerning the revised FLSA regulations. The panel discussed the difficulties that many employers face in accurately classifying jobs as exempt or non-exempt, and also when determining whether independent contractors should be considered employees. It was recommended that job analyses be done for individual positions, rather than general ones, to help determine exempt status and how much time is spent doing each type of work. Employers should also be aware of any differences regarding state law.

 

Opening the “Black Box”: Legal Implications of Big Data Algorithms

The subject of “big data” has become a hot topic as access to increasingly large amounts of data provides employers with new opportunities to make informed decisions related to recruitment, selection, retention, and other personnel decisions. However, “data scientists” often overlook the legal implications of using big data algorithms within an employment context, especially when it comes to employee selection. Panelists discussed several issues emerging from the use of big data algorithms, including the potential for discrimination, Title VII consequences, and strategies for mitigating risk.

As suggested by DCI’s Eric Dunleavy, many of the “big data” models really do not differ from empirically keyed biodata, which is not a new concept. What is new are methods of collecting larger amounts of data from new sources. Like empirically keyed biodata, big data can be very effective in predicting work-related outcomes. However, if the employer cannot explain how the algorithm works or illustrate that it is job-related, it may be difficult to justify use of the algorithm if facing a legal challenge.

In addition to traditional adverse impact concerns related to women and minorities, some big data techniques may have the potential to discriminate against other protected groups. For example, one panelist mentioned a computer program that can automatically score an applicant’s body movements and analyze vocal attributes from a video recording of an interview. Several other panelists noted that certain body movements or vocal attributes may be related to protected class status, in particular individuals with disabilities. The main takeaway here is that if an employer is using data algorithms, it is imperative that they not only validate the model, but also understand how it is making decisions.

 

Big Data Analytics and Employment Decisions: Opportunities and Challenges

In this session, speakers highlighted the increasing popularity of the use of big data techniques (e.g., machine learning) within organizations to predict work outcomes , pointing out both benefits and challenges inherent to these approaches.

As one example of a big data “win”, Facebook’s David Morgan described how data collected on the current workforce can be used to identify employees at risk of turnover. More caution is required, however, when using big data to inform selection decisions. Many big data algorithms are essentially “black boxes”: data goes in and results come out with little transparency of the how or the why. Not being able to explain the “why” makes these approaches very difficult to defend in court. Rich Tonowski, representing the EEOC, advised that companies be knowledgeable and comfortable with the process being used as the agency will obtain access to the algorithm. Similarly, companies should be able to explain how the information being used is job-related, especially when data have been mined from social media or other Internet sources.

A final caveat was that machine learning tools may use data that is correlated with protected-class status in some way.  Dave Schmitt of DDI suggested one way to test for this is to determine if the model can predict the race or sex of applicants. If so, then it may be subterfuge for discrimination. This may be especially compounded by the “digital divide,” where minorities may be less likely to have regular access to the Internet due to lower socio-economic status.

 

Applied Criterion-Related Validation Challenges: What We Weren’t Taught in Textbooks

This panel, which included DCI’s Art Gutman, discussed a variety of challenges faced when working to conduct criterion-related validation studies for client organizations. Challenges included study design issues, data collection problems, determinations regarding appropriate analysis, and meeting reporting requirements. Specifically, presenters discussed the criteria problem (obtaining appropriate and accurate measures of job performance), problems with predicting low base rate events, issues of range restriction and the appropriateness of applying corrections, among others. The panelists hypothesized that upcoming issues in criterion validation will include dealing with big data (“messy predictors”), processes for validating non-psychometric assessments, addressing validity equivalence (or lack thereof) in multi-platform or mobile assessments, and the eventuality of court cases evaluating validity generalization.

 

Implications of Revisions to FLSA Exemptions for Organizations and Employees

In this session, a panel of experts provided insights on the proposed changes to the FLSA exemption criteria.  The panel discussed the salary test for exemption, which would increase from $455 a week to the 40th percentile of weekly earnings for full-time salaried workers (estimated at $970 for 2016) and the implied potential changes to the job duties test. Regarding the salary test, panelists agreed that a change is overdue. However, they argued that a phased approach would be more appropriate and that the regulation should not be set at a dollar value, but instead aligned to a value that will allow it to stay in line with inflation. The NPRM’s discussion of the job duties test did not propose a change, but asked for feedback on whether a quantitative threshold, like the 50% “primarily engaged” test in California, should be implemented. The DOL estimated that approximately 20% of exempt employees would be impacted by the salary changes alone. Implications for employers are staggering, especially in light of the potential for a 60 day implementation window. First, employers must assess the extent to which they are comfortable with their exempt/nonexempt classifications and reasoning and plan to re-evaluate where needed. Second, budgeting and cost scenarios for moving exempt positions to non-exempt, realigning duties, or increasing pay should be evaluated. Finally, internal messaging and communication plans should be in place to outline the changes, reasoning, and any new procedures.

 

Novel Approaches for Enhancing Diversity Training Effectiveness in the Workplace

In this session, four different presenters provided insights on diversity training. Three presented information from academic research, and one presenter provided information from an organization context. A full 67% of organizations provide some form of diversity training, though research into the impact of that training on the job is varied. One series of studies found that individuals who are high in social dominance orientation (e.g., high preference for hierarchy in a social system and dominance over lower-status groups) tend to be more resistant to diversity training, but that this resistance can be mitigated when the training is endorsed by an executive leader. Another series of studies found that men are more likely to place importance on gender issues addressed when those issues are put forth by other men, and that this holds in both written context and in-person contexts. A Google employee presented on the training Google has implemented as part of new hire on-boarding on implicit or unconscious biases. The training focuses first on increasing awareness and understanding of the topic, to provide a common language, and initial suggestions for mitigation. Follow-up training has focused more on role playing type scenarios to cement the behavior change and mitigation aspect, increasing employee comfort level with calling out biases when and where they are observed.

 

Why Survey Data Fail – and What to Do About it

Panelists discussed their experiences conducting surveys, times when things went wrong, and recommendations for a successful survey. Anyone can use and develop a survey, but issues can arise when multiple stakeholders are involved, each with a different opinion. For this reason, it is important to communicate the purpose of the survey and how the results will be used. Branding can be beneficial to help develop awareness, generate interest, and increase participation. Positive changes implemented based on survey results can also lead to increased participation the following year. Additionally, it is important to research any null or opposite findings between survey iterations to give you a better understanding of any issues that may be present within your organization.

Panelists also addressed problems they have encountered when implementing results, including trying to do too much with the findings, or slicing the data so many ways that your results become less reliable. It was also emphasized that results should be presented in a way that leaves little room for subjective interpretation to avoid making conclusions that are not supported by the data.

Finally, the panel provided a few recommendations for a successful survey:

  • Make responding easy
  • Get people excited about data by telling a good story
  • Provide insights and summaries when reporting results
  • Make an effort to understand your audience in order to keep participants engaged year after year

 

Can Technology Like Deep Learning Eliminate Adverse Impact Forever?

This debate-style session posed the question of whether or not big data techniques (specifically deep learning or machine learning) could/should be used to eliminate adverse impact during selection. The panel included data scientists and I/O psychologists to present their perspectives. The I/O psychologists opposing this technique – including DCI’s Emilee Tison – presented the following high-level points:

  • The identification of adverse impact alone is not synonymous with illegal discrimination
    • The blind elimination of it may eliminate meaningful differences that exist due to legitimate job-related factors – impacting the validity of the selection procedure
    • Adverse impact is the prima facie standard for a disparate impact case; however, procedures that produce adverse impact have two additional considerations:
      • The job relatedness or business necessity of the procedure
      • The consideration of reasonable alternatives
  • Making selection decisions based on protected class status is illegal according to the CRA 91 and, as supported in recent case law, selection decisions should not be based on adverse impact alone (Ricci v. DeStefano, 2009)
  • Data scraping techniques – that learn and pull in factors to use in predicting important outcomes (such as information from Facebook) – call into question the job-relatedness of the selection procedure

In summary, the panelists came from very different perspectives and foundational knowledge bases; however, it was the start of what hopefully becomes meaningful cross-discipline dialogue.

 

 

By: Kayo Sady, Senior Consultant; Samantha Holland, Consultant; Brittany Dian, Associate Consultant; Dave Sharrer, Consultant; Kristen Pryor, Consultant; Rachel Gabbard, Associate Consultant; Joanna Colosimo, Senior Consultant; Emilee Tison, Senior Consultant; and Bryce Hansell, Associate Consultant at DCI Consulting Group 

 

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With OFCCP regularly requesting multiple forms of compensation during compliance audits, we revisit the difference between EEO compliance evaluations of base pay versus other compensation metrics. An individual’s base pay is a function of many different compensation decisions spanning multiple years, decision-makers, market characteristics, life circumstances, and career decisions. Effectively modeling such complex phenomena to appropriately evaluate whether EEO issues exist, requires a fairly sophisticated understanding of historical data and regression analyses. Further, the data needed to fully account for legitimate differences in pay are often not available (or, at least, not easily obtained in electronic format). In comparison, such forms of compensation as year-end bonus, spot bonus, and profit sharing are discrete amounts awarded in response to recent individual or company performance levels. Evaluating the EEO compliance of such compensation forms is relatively straightforward, as data availability is not usually a problem and the factors that influence distribution of awards are typically limited. Given the very different analytic scenarios presented by analysis of base pay versus other forms of compensation, we continue to urge our clients to separate compensation types in audit submissions and to communicate clearly the different reasons for awards. Given that “total pay” combines components that are the result of many decisions (i.e., base pay) and components that are the result of a single decision (e.g., annual bonus, spot bonus), caution must be taken when analyzing and interpreting a total pay composite.

By Kayo Sady, Senior Consultant and Mike Aamodt, Principal Consultant at DCI Consulting Group

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We have written several blogs (e.g., regarding the recent Apsley v. Boeing case) discussing the influence of sample size on the likelihood of observing statistically significant indicators in adverse impact analyses. As covered in those blogs, the larger the samples being analyzed, the higher the likelihood of observing statistically significant indicators of protected class subgroup differences, regardless of how different the pass rates are in practical terms. However, even in cases of small sample sizes, the differences between protected class subgroups may be statistically significant, and it is equally important (as it is with large samples) to evaluate the practical significance of the difference. In the following paragraphs, we discuss interpreting analysis results based on small pools or small numbers of selections.

In any case in which statistically significant indicators between protected class subgroups are found, it is critical to consider the practical significance of the difference. A common measure of practical significance is the shortfall, which is defined as the difference between expected selections and actual selections. The shortfall is calculated by (1) determining the number of selections that would have been expected from a group given the overall selection rate and (2) subtracting the number of actual selections from that group. This is often used in the EEO realm as an indicator of the magnitude of the adverse impact effect.

As an example of the importance of evaluating the magnitude of the shortfall when sample sizes are small, but selection rate differences are statistically significant, refer to the example data below:

Chart

Given an overall selection rate of 20%, it is expected that 2 females would have been selected from the 10 that applied. Only 1 was actually selected, yielding a shortfall of one female. The question here becomes: With a relatively small applicant pool and few selections made, does the shortfall of one female indicate a true problem of selection rate differences?

There have been a variety of uses of the shortfall utilized in the courts and by EEO enforcement agencies. The “flip-flop” standard has been endorsed by the courts and addressed by the Uniform Guidelines on Employee Selection Procedures (UGESP) as a viable assessment of whether small changes to underlying numbers (the selection decision data) would change the analysis results significantly. The UGESP Question and Answer (#21) illustrates this standard in saying:

Generally, it is inappropriate to require validity evidence or to take enforcement action where the number of persons and the difference in selection rates are so small that the selection of one different person for one job would shift the result from adverse impact against one group to a situation in which that group has a higher selection rate than the other group.

To demonstrate from our example above, the hiring of one more female and one fewer male would have resulted in a 0% difference in selection rates. Recently, a different interpretation of the shortfall figure was presented in the case of Apsley v. Boeing Co. (2012). The court determined in this case that if the shortfall was a low percentage of the overall number of selections, the analysis results were not deemed robust enough to support a claim of adverse impact. Use of the shortfall in this manner allows for taking the pool size into account, which may warrant wider use in future court decisions. In the above case, the shortfall is 20% of the total selections made.

With the backing of UGESP and case law precedent, contractors are encouraged to interpret adverse impact analysis results of small pools and small numbers of selections with additional practical significance measures.

By Jana Garman, Consultant and Kayo Sady, Senior Consultant at DCI Consulting Group 

 

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The 33rd Annual Conference for the National Industry Liaison Group was held July 28-31, 2015 in New York City and brought together members of the federal contractor community, government officials, and EEO/affirmative action practitioners. The conference was particularly memorable as this year is the 50th anniversary of Executive Order 11246 – an important marker in furthering the goal of equality in the American workplace.

DCI Consulting Group (DCI) staff members were involved in a number of NILG presentations and attended a variety of sessions. Session summaries and highlights can be found below.

  1. OFCCP Keynote Address
  2. EEOC Keynote Address
  3. Self Auditing your Applicant Screening & Tracking Processes to Ensure Compliance & Implementing Outreach & Accommodation Trackers
  4. Big Data Analytics and HR Technology: Meeting Emerging Challenges in Sourcing and Selection
  5. Pepsi ACT – Achieving Change Together: PepsiCo’s Disability and Inclusion Initiative
  6. Navigating the New Frontier of Steering Claims
  7. Compliance Strategies for a New Era of Compensation
  8. Recruiting – Social Media & Technology
  9. Self-Identification
  10. From Base comp to total comp & everything in between
  11. Outreach – Individuals with Disabilities: Innovative Strategies for Enterprise-Wide Disability Inclusion & 503 Compliance
  12. Outreach – Individuals with Disabilities/Veterans: Successful Assessment of Veteran & Disability Outreach
  13. Stepping into the Unconscious Mind. Understanding Implicit Bias and Job Steering Decisions, Analysis, and Prevention.
  14. Update on Contemporary OFCCP Enforcement: A View from 2014 Settlement Data
  15. Legal Experts Panel
OFCCP Keynote Address

The Director of OFCCP, Patricia Shiu, provided OFCCP’s keynote address. Given the historic year, it was not surprising that her speech opened with reference to the passing of Executive Order 11246 and briefly chronicled important events leading to that significant moment. Director Shiu also made mention of another significant moment in history, one that happened this year, in which two new groups were added to the list of protected bases under EO 11246: sexual orientation and gender identity. Other themes included relationship building and “making inclusion a reality.” Before concluding the keynote address, Director Shiu accepted, on behalf of OFCCP, a commemorative plaque for the 50th anniversary of EO 11246.

EEOC Keynote Address

Charlotte Burrows, Commissioner of the Equal Employment Opportunity Commission, delivered the EEOC Keynote Address, where she mentioned that 2015 is a year of celebration, with both the 25th anniversary of the Americans with Disabilities Act and the 50th anniversary of the EEOC, but also said that there is a long way to go with regard to equal pay and LGBT rights.

Commissioner Burrows stated that equal opportunity and equal pay are not only important for compliance, but are actually in a contractor’s best interest as they lead to the best outcomes for both the contractor and its employees. Additionally, as the U.S. is becoming more diverse and more business is conducted in global markets, companies with a diverse workforce will be better suited to recruit and retain talented employees. She offered three proactive strategies to address pay equity:

  1. Make it clear throughout your organization that pay equity is a priority with support from the top.
  2. Conduct statistical analyses of pay and, if you find problems, fix them.
  3. Allow employees to discuss pay with coworkers.

She also spoke about claims related to sexual orientation, where she warned contractors that often the initial allegation turns out to not be an issue, but the company’s response to the allegation may lead to a retaliation or intimidation claim. Before concluding the keynote address, Commissioner Burrows accepted, on behalf of EEOC, a commemorative plaque for the 50th anniversary of the agency.

Self-Auditing your Applicant Screening & Tracking Processes to Ensure Compliance & Implementing Outreach & Accommodation Trackers

This session, presented by Valerie Hoffman of Seyfarth Shaw, LLP, discussed ways to assess your own applicant screening and tracking processes in efforts to identify and prevent discriminatory selection practices. Several tools were identified to ensure consistency in the applicant screening process, including:

  • Articulated competencies resulting from a thorough job analysis
  • Use of standard, structured interview questions embedded in the applicant tracking system
  • Use of validated tests (within the last 5 years or after changes in job occurred)
  • Training of those conducting interviews or administering tests

In self-auditing your applicant screening and tracking process, it is important to focus your efforts on several key areas that can minimize the potential for adverse impact:

  • If using an external source to list your jobs with ESDS, conduct an annual audit to ensure all relevant jobs are listed, including states where electronic listing is not available.
  • Ensure basic qualifications and any special physical or mental requirements are listed in the requisition posting for jobs that require them.
  • Post a unique job requisition for each opening or, if requisitions are not unique, ensure there is a system for identifying each opening and tracking applicants who were considered.
  • Close all requisitions at least once each AAP year to limit risk and the size of the pool to be analyzed for adverse impact.
  • Minimize or eliminate the use of general position requisitions.
  • If candidates who have not applied for a particular opening are considered, ensure they are transferred into the ATS to the job for which they are considered.
  • When using Job Boards, LinkedIn, Facebook, Google or other search sites, ensure that candidates are forwarded to your Careers website so that they are screened within the ATS once they have indicated interest in employment.
  • Ensure that external recruiters (i.e., staffing firms) are maintaining applicant tracking for jobs for which they act as your screening agent. For example, administering compliant self-identification methods including disability self-identification according to OFCCP’s specific format requirements.
  • Maintain all paper applications, including those who do not have basic qualifications for the position because the definition of applicant may be broader than OFCCP’s Internet applicant definition.
Big Data Analytics and HR Technology: Meeting Emerging Challenges in Sourcing and Selection

In a panel moderated by Jon Geier of Paul Hastings, LLC, panelists discussed how “big data” has affected use of the Internet applicant rule and human resources technology, tools, and practices. Presenters on the panel included: Heather Morgan of Paul Hastings, LLP, Nathaniel Glasser of Epstein Becker Green, Rick Holt of Resolution Economics, and Kathleen Lundquist of APTMetrics.

Panelists discussed the changing definition of “big data” from the sole use of the phrase in referring to data in terms of velocity, volume, and variety, to the more recent use of the phrase in referring to methods and tools. The focus of the majority of the panel was on challenges and concerns with the use of big data in employment. Such concerns included:

  • Creation of predictive algorithms without a set of criteria based in theory.
  • Data issues, such as statistical inaccuracies due to noise accumulation.
  • Appropriate application of the Internet Applicant Rule in record-keeping obligations and data management techniques.

The panel closed with a list of suggested questions for contractors to ask of assessment vendors. These questions were:

  • Has the process demonstrated adverse impact?
  • What validation evidence has been collected to establish the job relatedness of the algorithm? Evidence collected for each job?
  • Does the validation evidence comply with the requirements of UGESP? Get a copy of the validation study.
  • What steps have been taken to ensure the security of test questions?
  • What kind of ongoing monitoring do you provide as we continue using the instrument?
Pepsi ACT – Achieving Change Together: PepsiCo’s Disability and Inclusion Initiative

Included under the general theme of “Individuals with Disabilities and Veterans Strategy/Talent Management”, this session focused specifically on Pepsi’s major initiative to increase the hiring and retention of these groups. The initiative is known as the Pepsi ACT (Achieving Change Together). Pepsi ACT was first piloted in 2014 and has continued to expand in 2015. Panelists included a representative from Pepsi, as well as representatives from their partners in ACT: Ability Beyond and the Nevada State Rehabilitation Division. Pepsi ACT is largely focused on partnering with local organizations to find talent and then providing a track for applicants to train for the application process in order to increase their success in applying for the position (and remaining employed). Training includes “soft” courses like interview skills and retention skills (e.g., practicing scenarios), as well as “hard” skills like on the job training for position(s).

To begin this initiative, panelists stressed that the first step involved branding. Before starting PepsiCo needed to figure out what their goal was, how to communicate that internally and externally, and ultimately create their brand. To begin the Pepsi Act program, two test sites were selected in order to pilot their initiative. Panelists advised this should not be seen as a human resources or compliance initiative and not approached as a charitable action because it won’t stick long term (i.e., it will be the first program to be cut when budgets are tough). Also, it is important to imbed this process in the culture in order for it to last; otherwise, once your champion leaves the organization it may not last. They recommended having operations managers “lead the charge” locally. Much of the initiative is education. It was important to educate sites, employees, managers, and applicants that this initiative was not creating new or special roles, but rather a different track to get at the same job(s).

Several other tips for a successful initiative included:

  • Create videos to share success stories from test sites to educate other sites about the initiative.
  • Leverage social media to communicate brand and initiatives.
  • Utilize display boards to communicate with front line workers who may not routinely access the intranet or other sites.
  • Partner with ATS and HR personnel to streamline the data aspect.
  • Internal training for managers and other employees.
  • Host open houses for the community organization with whom you are partnering or would like to partner with. Bringing these representatives onsite to learn about the jobs and facility, as well as your initiatives, will help to bridge the gap and find candidates.
  • Lastly, panelists reminded the audience that nothing happens as fast as you would hope and it is important to remember when getting a new initiative off the ground.
Navigating the New Frontier of Steering Claims

Steering remains a hot compliance topic, as OFCCP continues to direct compliance officers to look for and investigate steering claims during compliance reviews. We have written extensively on the issue of steering, which is defined as the policy or practice of guiding applicants or employees towards or away from certain jobs based on protected characteristics. It is an OFFCP focus given its relationship to hiring, promotional, termination, and compensation practices.

In this session, panelists including Christine Hendrickson and Michelle Mellinger (Seyfarth Shaw LLP), Michael DuMond (Economists Inc.), and Rob Speakman (Welch Consulting), reviewed several “steering” cases that are familiar to regular readers of our blog. Using the cases as a framework, the panelists presented several fictional case studies to highlight common fact patterns in steering cases and to underscore the importance of proactively assessing workforce data and practices for such patterns. A preliminary analysis involves an evaluation of specific data areas:

  • Hiring patterns
  • Workforce Analysis
  • Incumbency to Availability Analysis
  • Compensation
  • Promotional opportunities

An important take away from the panel was a reminder of the distinction between correlation and causation. Simply because two variables are correlated (e.g., sex category tends to be correlated with job title, such that a higher proportion of men are in Title 1 versus a higher proportion of women in Title 2) does not mean that one variable is causing the other (i.e., sex status is not necessarily the reason for the proportion patterns across the two jobs). The “steering” cases that OFCCP settled make it clear that OFCCP infers causation on the basis of statistically significant disparities. Thus, it is imperative for contractors to have robust practices for selection, placement, and promotion to defend against steering claims. The more formalized and structured the processes, the better contractors can point to applicant choice and job fit as the reason for individuals being placed into the positions they are placed into.

Panelists presented a number of key takeaways for reducing the likelihood of steering allegations:

  • Remember the distinction between correlation and causality – correlation does not imply causality.
  • Require applicants and employees to unilaterally choose jobs or career paths for themselves, offering no guidance on those decisions.
  • Keep job postings open to everyone.
  • Use a requisition system that does not “co-mingle” levels or shifts.
  • Reject applicants that apply generally for “any” or “all” positions.
  • Prevent movement of applicants between requisitions.
  • Maintain documentation to support defense that individuals are not interested in or qualified for higher paying positions.
  • Ensure a competitive promotion process.
  • Use and enforce a written, neutral procedure when placing employees in assignments.
  • Set pay by legitimate, non-discriminatory factors.
  • Self-monitor your pay and placements.
Compliance Strategies for a New Era of Compensation

DCI’s Joanna Colosimo presented with Dean Sparlin of Sparlin Law Office, Dr. Rick Holt, and Elizabeth Bradley of Fortney Scott. The panel discussion focused on the pros and cons of conducting a proactive compensation analysis, methodologies that are useful for contractors, and considerations for contractors conducting proactive compensation self-audits. Themes from the session included:

  • A primer on OFCCP strengthened enforcement and regulatory activity regarding compensation. This included an overview of Directive 307, the proposed Equal Pay Report, Pay Transparency, and the Revised Scheduling letter data points.
  • Discussion of the legal requirements related to a proactive compensation analysis. The panel discussed when and why contractors should be conducting proactive pay analytics.
  • Appropriate units of analysis. The panelists discussed the merits of conducting analytics by job title or other pay groupings, such as salary grade, that would be meaningful to a contractor. There was some discussion on the merits of proactively examining AAP job group as the pay group in the proactive compensation analysis to mirror what OFCCP may do during an audit, in addition to critically evaluating the job group structure in the Affirmative Action plans. However, most panelists concurred that the best unit of analysis is one that mirrored the contractors’ pay practices.
  • Types of pay being analyzed in OFCCP audits. This included a noted trend of total compensation (which may not be an appropriate pay outcome from a methodology perspective), incentive pay, bonus pay, and base pay.
  • The importance of conducting pay analyses under attorney-client privilege.
  • Practical considerations. This included a discussion of how merit variables such as education and prior experience are stored in HRIS systems, as well as what data points OFCCP is expecting to see during an audit submission. Typically OFCCP is expecting to see all items outlined in the scheduling letter, yet, practically, not all data points are easily accessible to contractors.
  • Preparing contractors for OFCCP audits. The panel discussed that experts are often seeing the use of a compensation interview during the course of an audit. Specifically, contractors are being asked to have the individual in charge for establishing compensation at an organization to be interviewed by telephone early during the desk audit stage.
Recruiting – Social Media & Technology

During this session, panelists discussed ways federal contractors can successfully leverage social media, to identify and engage prospective candidates, while remaining in compliance with Equal Opportunity and Affirmative Action regulations. Although social media can serve as a great source for identifying passive candidates, much attention has to be given to complying with recordkeeping guidelines and ensuring the identification of who is deemed an applicant.

A consistent message echoed throughout the discussion was regarding the development and implementation of social media sourcing guidelines. Panelists shared that this can ensure recruiting professionals are aware of what needs to be done in order to stay in compliance, specifically with the Internet applicant rule. In establishing social media guidelines, some advice included:

  1. Guidelines should clearly define “expression of interest” (e.g., only applicants who come through the ATS),
  2. define when candidates are considered (e.g., only when there is an open position),
  3. describe how recruiters communicate with individuals (e.g., scripted email that invites a prospective applicant to review a link tied to an open position), and
  4. describe how to manage relationships with passive candidates (e.g., creating a talent community).
Self-Identification

“A Proven Roadmap to Progress Toward 7% Self-Identification and Disclosure Objectives and Practical Solutions to Address Challenges Along the Way”

In a panel moderated by Katherine McCary, president of C5 Consulting, panelists discussed best practices for encouraging increased self-identification rates for individuals with a disability with the goal of meeting the 7% employment objective. Through the lens of each of their companies, panelists shared what organizations can do to increase self-identification, with the caveat that additional time is required to have robust evidence of their company’s program successes.

Katherine discussed various obstacles to self-identification; such as individuals being stigmatized or discriminated against, not seeing any personal gain, and not realizing they have a disability. While data typically best illustrates the makeup of a workforce, understanding unique disabilities helps contractors make progress toward a culture of inclusion. Communicating how the information will be used and that it will be kept confidential is key.

Bob Vetere of Northrop Grumman opened by speaking of the need to create a culture of diversity rather than an isolated campaign for self-identification, with the understanding that you may never reach the 7% utilization, though important to work toward. Among Bob’s recommendations were the suggestions of utilizing a welcoming statement on contractors’ websites, creating an engaging environment, and providing a self-service portal for accepting and handling requests for accommodation. Lori Kirsch of Florida Blue further focused on the need for cultural development through open discussion of leadership support, compliance standards, and cultural goals within the organization. Additionally, Lori shared that Florida Blue utilizes a dedicated recruiter to act as a liaison for individuals with a disability.

Marina Williams of Lockheed Martin emphasized the need for contractors to tap into their existing internal resources to best develop and celebrate a culture of diversity. Specifically, Marina suggested early and regular communications across the organization and to leverage existing communications and branding, as well as continuing development through communication and celebration of milestones and achievements. Jodi Woundy of Merck & Co., Inc. followed with a sample from the video series the organization has developed to engage their workforce in the self-identification process. Jodi suggested that pairing the videos with communications sponsored by senior leaders conveys to employees the importance the company places on employing and supporting individuals with a disability.

From Base Comp to Total Comp & Everything In Between 

During this session, Mickey Silberman from Jackson Lewis P.C. discussed compensation as it relates to OFCCP’s new tools and new rules and provided guidance and best practices for federal contractors and subcontractors. With the release of Directive 307 and the new scheduling letter and item 19, contractors must shift their focus to clearly understand their compensation systems. He explained that compensation is one of the President’s top EEO enforcement priorities and the agencies are getting the “tools” needed to uncover and eliminate pay discrimination. More specifically, two of the tools coming soon are the Equal Pay Report and the proposed “Pay Transparency” Rule. The Equal Pay report would require contractors to submit company-wide compensation data on an annual basis and the Pay Transparency rule would prohibit discrimination and retaliation against applicants and employees who discuss pay. Below are some key takeaways contractors can follow to prepare:

  • Review existing policies to ensure there are no restrictions regarding pay information.
  • Identify variables/factors that affect pay and be ready to provide an explanation for each.
  • Increase budgets for system changes and new requirements.
  • Review current systems that store variables/factors related to pay and develop a plan to combine data (e.g., performance scores, education, salary, etc.).Conduct privileged pay analyses and focus on base and total comp.
  • Identify and train all personnel involved in pay (e.g., Hiring manager, Talent manager, Supervisors, etc.).
Outreach – Individuals with Disabilities: Innovative Strategies for Enterprise-Wide Disability Inclusion & 503 Compliance

Speakers from the US Business Leadership Network (USBLN) discussed tools available to aid in evaluating a contractor’s extent of 503 compliance and disability inclusion, as well as some tips gleaned from contractors. Tips of note included the need for executive leadership team support for disability inclusion initiatives and utilizing cross-function teams to implement those initiatives. Leading organizations establish a disability employee resource group and centralize the accommodation process so that direct managers don’t have budget pressure for those requests. Regarding self-identification initiatives, using email alone to inform employees about the purpose of the survey was not as effective as:

  1. implementing a full campaign utilizing different media (i.e., videos, posters, voicemails),
  2. explaining why it is important for employees to participate (i.e., anyone could become someone with a disability – what kind of company do you want to be working for if it does/did happen to you),
  3. explaining how the results are confidentially maintained,
  4. including top executives or other employees willing to speak about their decision to participate, and
  5. training managers to be able to respond to employee questions about the survey is recommended.
Outreach – Individuals with Disabilities/Veterans: Successful Assessment of Veteran & Disability Outreach

This session focused on strategies for improving outreach and recruitment of disability and veteran populations, as opposed to assessment. Key takeaways on veteran outreach and recruitment included the recommendation that organizations internally evaluate the purpose for seeking to recruit veterans and be able to articulate that purpose. In addition, it was recommended that contractors enlist the assistance of employees who are veterans, where possible, to aid in providing insight to the veteran population and educate executives and hiring managers on this population. It was emphasized that the entire employee life cycle should be evaluated. This means identifying barriers in the recruiting systems and in the workplace and also educating the workforce, creating support for inclusion, and working to build brand recognition with disabled consumers who are a loyal consumer base. When asked about the assessment piece of compliance, the speakers pointed to tools being used to track outreach and recruitment efforts, including philanthropic donations, but did not include specific methods for evaluating the effectiveness of individual efforts.

Stepping into the Unconscious Mind. Understanding Implicit Bias and Job Steering Decisions, Analysis, and Prevention.

A legitimate steering claim would be one in which individuals are placed into particular organizational positions based on nothing more than protected group status. In this session, Julia Mendez (PeopleFluent), Charles Mullin (ERS Group), and Anna Nesterenko (ERS Group) provided an overview of bias and stereotype theory and research, which is the basis of OFCCP’s steering claims.

Presenters defined bias as “a subjective preference toward a particular viewpoint or belief that prevents a person from maintaining objectivity.” Unconscious bias (i.e., those subjective beliefs of which one may not be acutely aware) is distinguished from conscious prejudice and discrimination in which preferences or are known to and acknowledged by the individual who holds the beliefs. An example of unconscious bias that has been demonstrated and replicated in empirical research is that certain jobs tend to be associated with certain sex categories by many people (e.g., many individuals tend to think of men when they consider the job of Electrician). Similar examples may be found for race. As such, to the extent that sufficient guardrails are missing to protect against the influence of implicit bias in recruiting, selection, and placement, such processes may be vulnerable to discriminatory decisions and OFCCP challenge.

The presenters offered ten previously published strategies for combating unconscious bias in the workplace:

  1. Recognize that as human beings, our brains make mistakes without us even knowing it.
  2. Reframe the conversation to focus on fair treatment and respect, and away from discrimination and “protected classes”.
  3. Ensure that anonymous employee surveys are conducted company-wide to first understand what specific issues of hidden bias and unfairness might exist at the workplace.
  4. Conduct anonymous surveys with former employees to understand what issues they faced.
  5. Offer customized training based on survey results.
  6. Offer an anonymous, 3rd party complaint channel.
  7. Initiate a resume study within your industry, company and/or department to see whether resumes with roughly equivalent education and experience are weighted equally, when the names are obviously gender or race or culturally distinct.
  8. Launch a resume study within your company and/or department to reassign points based on earned accomplishments vs. birth traits.
  9. Support projects that encourage positive images of persons of color, LGBT and women.
  10. Identify, support and collaborate with effective programs that increase diversity.
Update on Contemporary OFCCP Enforcement: A View from 2014 Settlement Data

In this strategic leadership session, DCI’s David Cohen presented on OFCCP enforcement trends. According to Cohen, OFCCP’s top enforcement priorities are:

  1. Steering
  2. Compensation
  3. Entry-Level Failure to Hire Cases
  4. Good Faith Efforts
  5. Record Keeping

However, Cohen claimed, the data taken from DOL’s Public Enforcement Database show that the agency “is still trying to figure out compensation,” as indicated by a lack of settlements resulting from compensation discrimination and the majority of discrimination findings (70.58%) resulting from hiring cases in FY 2014.

Additionally, the total number of compliance evaluations and the percentage of those evaluations to result in a Conciliation Agreement or Financial Remedy are all lower in FY 2014 than in any other year under the Obama administration.

Other important takeaways from this session included:

  • Contractors in the Northeast and Mid-Atlantic regions should expect more pay discrimination cases.
  • There was at least one case where OFCCP pursued a compensation claim based on disability.
  • OFCCP will no longer look at compensation comparing white employees to “total minority” employees, but will instead be comparing the different race groups to each other.
  • Under the new Item 19 request, OFCCP will be increasingly looking at other forms of compensation besides base pay, such as bonuses.

Cohen’s advice is to conduct internal proactive analyses of base pay, and to consider analyzing additional forms of compensation as well, such as bonuses, commissions, and overtime pay. He suggests that OFCCP has said that they will follow Title VII principles and case law, so contractors should be conducting multiple regression analyses using “similarly situated employee groups” in their proactive analyses.

Legal Experts Panel

On the final day of the conference, David Fortney of Fortney & Scott moderated a panel of legal experts. The session was an effective wrap-up of the conference, with Fortney asking the panel to provide opinions on topics brought up in sessions over the previous two days. Some of the key takeaways from the panelists:

  • Valerie Hoffman of Sayfarth Shaw stated that, while both the EEOC and OFCCP say equal pay is a top priority, their inability to identify compensation issues is the reason for the focus on steering. However, steering is a placement problem, not a compensation problem. Her advice to contractors was to conduct pay analyses, fill in holes in your data (such as prior relevant experience), and make sure you have the tools to assess progress.
  • Mickey Silberman of Jackson Lewis said that despite the pressure on OFCCP to find pay discrimination, it is actually proving difficult for them to do so. The shift of focus to steering is because OFCCP is trying to use the same framework in compensation cases that has worked in failure to hire cases in the past.
  • Steering is not only possible in entry-level jobs, according to Nita Beecher of Mercer. She advised that an analysis of steering should make sure people are not getting stuck in their career advancement and that people are being promoted equitably. She also said that, while there are not many compensation findings by the agency, the ones that do happen tend to be bad.
  • According to Joe Lakis of Norris, Tysse, Lampey, & Lakis, the current relationship between the regulators and the regulated is the most tense and hostile that he has seen in 21 years, and that contractors are expending a lot of time, energy, and money trying to engage in good faith efforts.
  • Jon Geier of Paul Hastings advised that adverse impact analyses should be conducted using the “highest-selected” group as the comparator. In audits, he recommends always conducting any analyses prior to submission for risk assessment purposes. With regard to transitional items, such as the new reporting for Section 503 and VEVRAA, he has not received any pushback from simply indicating that you are aware of the requirements and that they will be done. He stressed that a very important, but often overlooked, step in an audit is to send a “Hold” letter to establishments advising them to retain all relevant records when a scheduling or courtesy letter is received.
  • Geier also suggested preparing alternate versions of AAPs using groupings other than AAP job groups that may be more meaningful within the organization. This may facilitate cooperation between the compliance and diversity functions and get more buy-in from executives. He stressed that these analyses should be conducted under privilege.
  • Several panelists lamented that the agencies did not use their presence at the conference to provide new information to attendees.

By Brittany Dian, HR Analyst; Bryce Hansell, HR Analyst; Kristen Pryor, Consultant; Kayo Sady, Senior Consultant; Jana Garman, Consultant;  Joanna Colosimo, Senior Consultant; Dave Sharrer, Consultant;  Amanda Shapiro, Senior Consultant; Yevonessa Hall, Consultant; and Yesenia Avila, Associate Consultant at DCI Consulting Group

 

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The 30th Annual Conference for the Society of Industrial and Organizational Psychology (SIOP) was held April 22-25, 2015 in Philadelphia, PA. This conference brings together members of the I/O community, both practitioners and academics, to discuss areas of research and practice and share information. Many sessions cover topics of interest to the federal contractor community, including employment law, testing, diversity and inclusion, big data, and regulations for individuals with a disability. DCI Consulting Group staff members were well represented in a number of high profile SIOP presentations and also attended a variety of other sessions worth sharing.

DCI highlights included, but were not limited to, President Dave Cohen presenting a pre-conference workshop with EEOC Chief Psychologist Dr. Rich Tonowski, Dr. Mike Aamodt presenting a master tutorial on background checks with Dr. Rich Tonowski, and Dr. Eric Dunleavy being awarded SIOP fellow status at the plenary session. Additionally, DCI staff members Dr. Art Gutman, Dr. Kayo Sady, Joanna Colosimo, Keli Wilson, and Vinaya Sakpal all presented at the conference. Session summaries and highlights can be found within six major themes as listed below.

    1. Hot Topics
    2. Disability Disclosure
    3. Diversity and Inclusion
    4. EEO Analytics
    5. Performance Appraisals
    6. Testing and Selection

 

Hot Topics

OFCCP and EEOC Enforcement Trends: Practical Tips for Mitigating Risk

DCI’s David Cohen and Dr. Richard Tonowski, Chief Psychologist at EEOC, presented a workshop that reviewed aspects of both the OFCCP and EEOC’s regulatory and enforcement agenda. Several of the highlights are summarized below.

OFCCP Regulatory and Enforcement Agenda

  • Equal Pay Report – current proposal that will require the collection of contractor compensation data (status – NPRM).
  • Pay Transparency – EO 13665 prohibits retaliation against employees and applicants for disclosing, discussing, or asking about compensation information (status – NPRM).
  • LGBT Protections – EO 13672 prohibits federal contractors from discriminating against any employee or applicant because of sexual orientation or gender identity and requires contractors to take affirmative action to ensure applicants and employees are treated without regard to sexual orientation or gender identity (status – Final).

OFCCP Trends

  • When analyzing the last ten years of data, the majority of OFCCP findings of discrimination have been related to a pattern or practice of  intentional discrimination, hiring, and placement (approximately 74%) and compensation issues (approximately 17%).
  • OFCCP’s focus on large analytical units (or aggregation of data) will almost always yield statistically significant differences between groups of interest. In some cases, data aggregation may be improper.
  • Disparity analyses should compare subgroups of interest to the highest selected group. OFCCP has endorsed this approach and recent settlements are reflective of this.

Current EEO Litigation Trends

  • Private-sector charges to EEOC are down.
  • EEOC-initiated litigation is down.
  • Few EEOC cases involve complex psychometric or statistical issues.
  • The current EEOC emphasis is on systemic cases, though most activity still involves single-claimant, disparate treatment issues.
  • The hottest EEOC litigation is over procedural matters (such as the adequacy of complaint, conciliation).

EEOC Strategic Enforcement Plan (2013-2016)

  • Eliminating barriers in recruitment and hiring, including those involving religious discrimination, credit and criminal history, and social media.
  • Protecting immigrant, migrant, and other vulnerable workers. The take-away message was employers should be proactive when there is a ‘vulnerable workforce.’
  • Addressing emerging and developing issues, such as pregnancy accommodation, ADAAA, big data, and LGBT issues.
  • Enforcing equal pay laws, with an emphasis on sex discrimination.
  • Preserving access to the legal system by targeting policies and practices which discourage or prohibit individuals from exercising their rights or impede EEOC’s enforcement efforts.

Preventing harassment via systemic enforcement and targeted outreach. Note that there has been a high volume of recent harassment cases.

Disability Disclosure

Alliance Special Session: Working with Mental Health Issues

In light of new data collection requirements now in effect under Section 503 of the Rehabilitation Act, the self-identification process for individuals with disabilities (IWD) is a hot discussion topic. Many are particularly curious about the decision to disclose from the perspective of applicants and employees with disabilities. During a panel discussion on mental health issues in the workplace, counseling psychologist Susanne Bruyère, Ph.D., shared her research on the factors influencing the decision to disclose or not disclose disability status in an employment setting. Listed below are several highlights from Bruyère’s discussion of her research:

  • Factors identified as most influential in the decision to not disclose a disability (barriers to disclosure)
    • Fear of unfavorable employment outcomes (e.g., not being hired, being terminated)
    • Concern of shifting employer’s focus from employee performance to the disability
  • Factors identified as most influential in the decision to disclose a disability (facilitators to disclosure)
    • Need for a workplace accommodation
    • Positive employee-supervisor relationship
    • Perception of employer’s commitment to disability inclusion
  • Factors identified as significantly less important in the decision process by IWD who ultimately decided against disclosure (in comparison to those who decided to disclose)
    • Including statements in employer recruitment material
    • Having an employee with a disability at a job fair

Implementing Diversity and Inclusion Practice

Panelists discussed a current shift in the way organizations are, and should be, approaching diversity and inclusion. Companies are moving away from just training women, for example, and moving toward training the managers who have the power to promote those women. One challenge that still remains is identifying any biases or stereotypes that may be present and learning how to overcome them.

Furthermore, it was emphasized that diversity is more than you can see. It is not about “how do I manage or teach minorities?” but rather, “how do I tailor my teaching style to each individual, no matter their background?” With a decrease in external pressures on employers, motivation to improve diversity and inclusion programs must ultimately come from within the organization.

Attracting and Retaining Qualified Individuals with Disabilities: A Contemporary Update

DCI’s Joanna Colosimo moderated this session which focused on a variety of issues regarding the recruitment, selection, and retention of individuals with disabilities in the context of the new reporting requirements that went into effect March 24, 2014. Employer, researcher, and practitioner panelists including Keli Wilson and Arthur Gutman of DCI covered a range of topics including the voluntary self-identification requirements pre- and post-offer, workforce metrics and the 7% utilization goal for individuals with disabilities, and potential legal considerations. Additionally, panelists addressed the challenges that employers continue to face in attempting to foster inclusive environments in which employees feel comfortable disclosing their disability status and shared best practices on outreach and selection.

In one example, Eyal Grauer, the Manager of Equal Opportunity Initiatives at Starbucks Coffee Company, shared that his employer has long been committed to recruiting, hiring and retaining people with disabilities and supporting inclusion and accessibility in the workplace. Although disabilities are often framed in a negative light, Starbucks has found just the opposite. Partners with a range of disabilities serve to enhance the company through their innovation, creativity and unique skillset and this philosophy should be at the forefront of all disability-inclusive programs and initiatives moving forward.

Diversity and Inclusion

Mending the Leaky Pipeline: Retention Interventions for Women in STEM

Presenters discussed the tendency for women to self-remove from STEM fields. For example, in several fields, women declare and begin studies in almost equivalent numbers. However, women are more likely to either not complete the program or to remove themselves from the field. Some methods discussed to reduce the number of women who fall out of traditionally male dominated professions included: working to minimize alienating language and imagery (i.e., posting pictures of women draped over a NASCAR vehicle in the break room can send the wrong message), downplaying the stereotype in task performance, creating peer groups, encouraging self-affirmation, and identifying mentors. Finally, it’s important to retain women in STEM fields so there are future role models for women thinking about or entering STEM fields.

Uncharted Waters: Employees with Disabilities

Per Section 503 of the Rehabilitation Act, federal contractors are required to establish a utilization goal of 7% employment for qualified individuals with disabilities. However, recent findings among contractors and non-contractors show that only an average of 3% of employees have identified as having a disability, highlighting the challenge employers continue to face with employee self-disclosure. The panel discussed potential reasons for low disclosure rates:

  • It may not always be clear to people whether or not they have a disability.
  • Language in the self-identification form is framed negatively instead of positively.

Asking someone whether they have an apparent or non-apparent disability may change how they respond. Likewise, when requesting participation, continually using language such as “this will not hurt your chances” instead of “this could help your chances” could deter employees from disclosing their disability. It is more than checking a box – employees have to understand and accept their disability, and then make the choice to disclose.

AttenTION: Integrating Military Veterans in to the Workforce

Several presentations focused on veterans in the civilian workforce; most addressing problems and solutions in three main areas: recruiting veterans into the workforce, getting them through the hiring process and retaining them in the workforce.

Recruitment/Outreach

There are a variety of both national and local level outreach resources available. Some best practices in this area involved emphasizing local level resources and involving veteran employees in the outreach effort. Some organizations with locations close to military installations initiated efforts to recruit transitioning military members before discharge is complete.

Hiring/Applicant Experience

It is often difficult for veterans and civilian recruiters and hiring managers to identify how military training and skills translate to company positions. Spending the time up front to define the knowledge, skills and abilities needed and the military skills and training that align will allow for more effective targeting efforts, resulting in a better job fit. Some areas where this has been successful included translating military leadership and supervisory skills, CDL transfer programs for drivers, and identifying that military skills translated well to competencies required for a sales position.

Retention

Veteran retention is receiving a lot of focus, as the turnover rate for 21-29 year old veterans is much higher than non-veterans, specifically during the first few years of employment. Female veterans leave at a higher rate than male veterans. Communication efforts can help with retention. Specifically, ensuring that top leadership is vocal about supporting veterans, communicating the value of the veteran’s position to achieving the organization’s mission, repeatedly providing information about resources available, and communicating to non-veteran employees to dispel “preference” myths have helped in some companies. Resources that can help reduce turnover include employee resource groups, mentoring, defining clear career paths, and offering a variety of resources to meet the diverse needs of veterans.

Lesbian, Gay, Bisexual, Transgender (LGBT) committee (ad hoc)

DCI staff attended the LGBT committee (ad hoc) meeting. A mission of this committee is to encourage research on LGBT issues. DCI will continue to share information that comes from continued involvement with this committee.

EEO Analytics

Current Issues in EEO Law

In this roundtable discussion, experts focused on four current issues in EEO law: recruitment, adverse impact, sexual harassment, and retaliation. After each topic was briefly introduced, the floor was opened up for an audience led discussion and question session. High-level discussion points included:

  • Although the Uniform Guidelines on Employee Selection Procedures (UGESP) do not indicate recruitment as a selection procedure, mishandling of recruitment can lead to selection violations such as adverse impact and the pattern or practice of discrimination.
    • As an example, an attempt to recruit a skilled laborer may lead you to recruit from local training schools. However, if those training schools do not have a diverse population of students, this pipeline of applicants may reduce diversity.
    • Background checks were discussed in light of legal considerations, including adverse impact and potential employer liability. It was stressed in this discussion the importance of considering the specific requirements of the job and also the nature of the business when assessing risk.
    • Employers are encouraged to take appropriate steps to prevent and correct unlawful harassment, including establishing a complaint or grievance process, providing anti-harassment training, and taking immediate action when complaints are reported.
    • Anti-discrimination laws prohibit harassment against individuals as retaliation for filing a discrimination charge, testifying, or participating in any investigation.
      • Harassment that is not severe or pervasive enough to interfere with terms and conditions of employment can lead to retaliation violations because criteria for retaliation claims are less than criteria for harassment claims.

Data Aggregation and EEO Analytics

This symposium provided an analysis of problems with data aggregation in three EEO scenarios: Adverse impact analysis, criterion-related validation analysis, and compensation analysis. In all three presentations, presenters demonstrated problems that aggregating unlike data can introduce in terms of arriving at correct conclusions in legal scenarios.

  • Using data from the Lopez v. City of Lawrence ruling, presenters demonstrated how conclusions regarding hiring/promotion discrimination can differ depending on whether hiring events are analyzed separately, analyzed in the aggregate without appropriate tests accounting for the multiple events combined, and analyzed in the aggregated contingent on Breslow-Day statistical results and using a Mantel Haenszel estimator. A take home conclusion from the presentation is that data should never be aggregated if there are conceptual reasons to keep the data separate (i.e., data from multiple locations representing distinct phenomena), but if there are no serious obstacles to aggregating, appropriate multi-event tests (such as the Mantel Haenszel) should be used.
  • Criterion-related validation research involves collecting selection assessment scores (e.g., written test scores, simulation scores, interview scores, some combination of different scores) from a group of individuals applying for or performing a job and establishing the degree to which those scores correlate, at a statistically significant level, with job performance ratings for the individuals. A statistically and practically significant correlation coefficient demonstrates that those who perform better on the assessment also tend to perform the job better. However, to the extent that different supervisors have particular rating tendencies (e.g., some tend to be lenient while others tend to be strict), the observed correlation coefficient between assessment scores and performance ratings will artificially decreased. The presenters offered an application of cluster-centered regression in such scenarios to demonstrate that such a technique is superior to ordinary least squares regression in criterion-related validation studies that involve supervisor ratings of performance.

Finally, presenters offered a clear demonstration of how the application of aggregation strategies offered in OFCCP’s Directive 307 are problematic in EEO pay analyses when they extend beyond the level of similarly situated data. Using simulated data from six known populations of similarly situated individuals (population parameters were established by the presenters as part of the simulation), the presenters shared results that demonstrate, definitely, false positive indicators of discrimination increase dramatically when similarly situated groups are aggregated in an EEO pay analysis.

 

Performance Appraisals

Does Your Performance Appraisal System “Meet Expectations”?

There were several sessions discussing whether formal performance appraisal (PA) systems should be abandoned. Those in favor of jettisoning formal PA systems argued that such systems involve a lot of time and money but there is no evidence that they actually result in financial benefits to the organization.  Those in favor of keeping formal PA systems argued that, although most PA systems need improvement, they are important to motivating and developing employees.

Several of the organizations that no longer use performance ratings, concentrate on goal accomplishment instead.  One panelist pointed out that effective goals are related to improving the organization rather than being related to day-to-day routine work activities. Another panel member commented that any effective PA system should be about helping the employee get better.

It was interesting that several organizations said that they no longer use performance ratings but in the descriptions of their new systems, it seems as if they still do.  For example, one organization said that it no longer uses performance ratings but instead, places employees into one of three categories: Driving the business, performing, and not performing. Isn’t this a rating scale?

Regardless of the panelists’ view of performance ratings themselves, one point on which everyone agreed was that feedback should not be an annual event. Instead, an ongoing cycle of feedback is critical to making any impact on employee performance.

Based on the number of sessions and the big turnout for each of these sessions, this promises to be a hot topic in the coming years.

Testing and Selection

Mobile Assessment: The Horses Have Left the Barn…Now What? 

Many organizations are moving away from traditional paper pencil assessments to high tech software programs to test applicants. Key differences in technology platforms (e.g. tablets, laptops and mobile phones) shared in a pre-conference workshop are listed below:

  • Small screen sizes may result in lower scores, primarily because of increased cognitive demands (e.g. smaller fonts and page manipulations required to read sentences).
  • Younger applicants prefer taking tests on a mobile device where older applicants typically prefer laptops or desktops.
  • Personality tests are easier to complete on a mobile phone than cognitive ability tests, which often contain diagrams.
  • Although a general reduction in scores is seen using smaller devices, subgroup differences stay the same across different device platforms.

20 Years of Changes in Pre-Employment Testing: Experiences and Challenges

Additional information on the changes in pre-employment testing due to technological advances was shared in this session. Key points from this session to consider when assessing applicants or integrating assessments in the applicant tracking system (ATS) are listed below.

  • Determine whether assessments are or should be mobile-friendly (i.e. consider the applicant experience).
  • Face validity is important in the context of technologically driven applicant processes (i.e. ask at the end whether the applicant was able to share their skills).
  • Involve relevant parties in integrating assessments in an ATS (e.g., Industrial-Organizational psychologists, compliance, legal, HR, recruiters, programmers, assessment developer, ATS vender).

Advancing Test Development Practices: Modern Issues and Technological Advancements

Part of the session explored adding game-like aspects to traditional cognitive assessments. Introducing game aspects to computer-based cognitive ability tests did not significantly impact testing times, which is good. However, the study also found that providing game-like feedback could impact applicant reactions to and performance on the assessment.

Although more research is needed, it’s important to be aware of different technology platforms for assessments and inform applicants of potential drawbacks associated with mobile device testing.

Using Background Checks in the Employee Selection Process

Although prevalent in the employee selection process, the use of background checks as a tool for applicant screening continues to draw heavy scrutiny from both the EEOC and plaintiffs attorneys. In spite of legal risk, approximately 86% of employers consider criminal history for at least some applicants (SHRM, 2012). During a SIOP tutorial session, Mike Aamodt of DCI Consulting and Richard Tonowski of the EEOC discussed legal implications and best practices for employers using background checks in employee selection.

Background checks, including credit and criminal history, have shown evidence of adverse impact against racial minorities when used to screen out candidates for employment. For this reason, employers should consider several factors when determining whether and how to use background checks. See the list below for several best practice recommendations for minimizing risk in the use of employee background checks:

  • Avoid blanket policies (e.g., policy that company will not hire applicants with past convictions without exception).
  • Demonstrate clear link between the purpose of conducting the check and specific requirements of the job.
  • Consider both the length of time since the conviction and the nature of the crime.
  • Notify any applicants who were rejected based on the background check and offer the opportunity to provide an explanation.
By Eric Dunleavy, Principal Consultant; Rachel Gabbard, Associate Consultant; Bryce Hansell, HR Analyst; Kristen Pryor, Consultant; Keli Wilson, Senior Consultant; Brittany Dian, HR Analyst; Emilee Tison, Consultant; Mike Aamodt, Principal Consultant; Kayo Sady, Senior Consultant; and Vinaya Sakpal, Consultant at DCI Consulting Group 
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Last year’s revisions to OFCCP’s scheduling letter included an addition of detailed compensation data (e.g., bonuses, incentive pay, commissions, merit increases, etc.) to be submitted as part of the itemized listing requirements.  Predictably, we are beginning to see requests for these types of compensation data during OFCCP audits (even those submitted before the change to the itemized listing). OFCCP’s strategy for analyzing these data remains unclear, but provisions in OFCCP’s proposed Equal Pay Report (EPR) may provide some insight.

The EPR proposal stated that Federal contractors would be obligated to submit yearly W-2 earnings for each employee. OFCCP could then compute statistical benchmarks of salary differences between protected class subgroups, although the appropriateness and meaning of such an analysis is dubious. The OFCCP Institute submitted a public comment through the rulemaking process to express reservations about the EPR plan. The OFCCP Institute illustrated, through simple data simulations (Appendix C), the gross analytic problems and interpretation difficulty posed by using W-2 earnings as the variable of interest.

If, during audits, the OFCCP plans to aggregate all compensation during the year for each individual and conduct protected class subgroup comparisons, they will run into many of the same problems outlined in the OFCCP Institute’s EPR public comment. To illustrate, we provide four simplistic simulations below:

 

Issue 1: Merit Increase and Part-time vs Full-Time status

Problem Statement: When part-time and full-time jobs are evaluated together, evaluation of earnings, rather than base pay, may show disparities simply due to full-time versus part-time hours worked.

Example: In this example, there are 3 men and 3 women in a job title. One man and two women work part-time at 20 hours a week, per employees’ hour requests. The hourly rate for this job title is the same for all employees. All employees received a bonus that was equivalent to their hourly rate multiplied by annual hours worked.

Conclusion: If bonus compensation is added to annualized base pay and average total compensation for men is compared to that for women, without regard for differences in full-time/part-time status, it appears that men make $250 a year more than women on average. If average bonus by sex is compared, without regard for differences in full-time/part-time status, it appears that the average bonus for women is 80% that of the average bonus for men ($1,250/$1,000).

 

Title

Sex

FT/PT Status

Time Period Salary Earnings

Annualized Base Pay

Bonus

Database administrators

F

PT – 1040 hrs

$25,000

$50,000

$750

Database administrators

F

PT – 1040 hrs

$25,000

$50,000

$750

Database administrators

F

FT – 2080 hrs

$50,000

$50,000

$1,500

Database administrators

M

PT – 1040 hrs

$25,000

$50,000

$750

Database administrators

M

FT – 2080 hrs

$50,000

$50,000

$1,500

Database administrators

M

FT – 2080 hrs

$50,000

$50,000

$1,500

 

Issue 2: Promotions/Demotions Differences

Problem Statement: When total salary earnings are evaluated, individuals who were promoted or demoted during the year will influence the analysis, despite similar pay at the data snapshot.

Example: In this example, there are 3 men and 3 women listed as cooks with an average salary of $30,000 per year, and the snapshot date is September 1st, 2015. Of the six individuals who were cooks as of the snapshot, two (2 women) were promoted into the cook role from a $20,000 a year role on March 1st, 2015. In addition, one sous chef (1 man; $70,000 a year) was demoted on March 1st, 2015.

Conclusion: If salary earnings or hourly rates during the AAP time period are compared, women cooks would appear to be making approximately 74% of what the men cooks make ($27,490.67/$37,389.67 annually or $13.22/$17.98 hourly). Clearly, any apparent discrepancies are due to promotion/demotion activity, but there is a possibility for misconception if OFCCP were to analyze these types of data.

 

Title

Sex

FT/PT

Status

Snapshot Hourly Rate

Time Period Salary Earnings

Time Period Hourly Rate

Status

Cook

M

FT – 2080 hrs

$14.45

$30,056.00

$14.45

Cook

M

FT – 2080 hrs

$14.45

$30,056.00

$14.45

Cook

M

FT – 2080 hrs

$14.44

$52,057.44

$25.03

Demoted 03/01

Cook

F

FT – 2080 hrs

$14.41

$26,826.00

$12.90

Promoted 03/01

Cook

F

FT – 2080 hrs

$14.40

$25,673.92

$12.34

Promoted 03/01

Cook

F

FT – 2080 hrs

$14.41

$29,973.00

$14.41

 

Issue 3: Employees with less than one year tenure

Problem Statement: Analyzing time period earnings for a group of employees, in which some employees were hired during the AAP time period, may result in the appearance of pay disparities where there are none.

Example: In this example, there are 3 men and 3 women distributed in one job with approximately the same exempt, full-time salary. Two women in this example were not hired until the end of February 2015. If the AAP snapshot date is September 1st, 2015, the time period salary earnings for the two women reflect six months of base pay.

Conclusion: Comparing the actual earnings of women to that of men would indicate that women, on average, are paid approximately 89% of what men are paid ($80,012/$90,010).

 

Title

Sex

FT/PT Status

Annualized Base Pay

Time Period Salary Earnings

Database Administrator

F

FT – 2080 hrs

$90,020

$90,020

Database Administrator

F

FT – 2080 hrs

$90,000

$75,000

Database Administrator

F

FT – 2080 hrs

$90,020

$75,016

Database Administrator

M

FT – 2080 hrs

$90,000

$90,000

Database Administrator

M

FT – 2080 hrs

$90,030

$90,030

Database Administrator

M

FT – 2080 hrs

$90,000

$90,000

 

Issue 4: Earnings other than base pay

Problem Statement: Analyzing all compensation for a group of employees in which some have received other forms of compensation (i.e., relocation funds, unreturned per diem payments, in-town evening meal reimbursements) may result in a false positive determination of potential discrimination.

Example: In this example, the 3 men and 3women have almost the same base pay values. Notice that all employees received some additional compensation in the form of unreturned per diem and/or in-town evening meal payments.  However, two women also received moving expense reimbursements.

Conclusion: Comparing the average total compensation of men and women would indicate that men earn $0.95 for every dollar earned by women, despite average base pay being nearly identical.

 

Title

Sex

FT/PT

Status

Base Pay

Total Compensation

Database Administrator

F

FT – 2080 hrs

$90,020

$98,020

Database Administrator

F

FT – 2080 hrs

$90,000

$92,000

Database Administrator

F

FT – 2080 hrs

$90,020

$105,020

Database Administrator

M

FT – 2080 hrs

$90,000

$91,000

Database Administrator

M

FT – 2080 hrs

$90,030

$94,030

Database Administrator

M

FT – 2080 hrs

$90,000

$95,000

 

Conclusion

The examples provided are overly simplistic, compared to the scope and complexity of organizational compensation data and policies, yet the complications inherent in evaluating non-base pay compensation are clear even with such basic examples. In 2015, we expect OFCCP to continue requests of “other forms” of compensation, and we encourage contractors to take a considered approach to such requests, and seek professional assistance in formulating responses.

By Kristen Pryor, M.S., Associate Consultant and Kayo Sady, Ph.D, Senior Consultant, DCI Consulting Group 

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On Equal Pay Day in 2014, President Obama signed an executive order to strengthen pay transparency for federal contractors.

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