BCGi does not often report on others’ reporting, but this is worth highlighting—OFCCP Director Jenny Yang has confirmed to Bloomberg News that she is “very committed to working to close the existing racial and gender pay gaps,” signaling that this will be a major focus of the agency during her tenure.
Director Yang was instrumental in the EEOC’s recent efforts to collect pay data from employers required to file the annual EEO-1 as a way to develop benchmarks for identifying suspicious pay gaps based on protected characteristics, specifically sex and race/ethnicity. Although that effort, known as the EEO-1 “Component 2,” has been suspended, it could still be revived. In the meantime, state and local efforts such as California’s pay data reporting requirement are continuing the charge to increase transparency into employers’ compensation practices. And the OFCCP has for a number of years now requested employee-level compensation data in every full audit, providing the agency with a wealth of highly detailed compensation data that could be used for broader purposes.
Increased Collaboration with the EEOC?
Notably, Yang is the former Chair of the EEOC, the more well-known federal agency that enforces Title VII nondiscrimination obligations for private employers which serve as the basis for the OFCCP’s regulations implementing Executive Order 11246. Despite a longstanding “memorandum of understanding” between the two agencies to share information, historically the two agencies are not known for playing well together in the sandbox. Now that the former EEOC Chair is the Director of the OFCCP, that could change.
Traditionally, the EEOC is better-known for its investigative and prosecutorial prowess, but the agency’s authority is relatively limited. In particular, when the EEOC investigates a claim they are limited to documents, data, and information related to the specific claim under investigation. When it comes to federal contractor employers, however, the OFCCP’s authority is nearly carte blanche—anything and everything relating to nondiscrimination and/or affirmative action, specifically or generally, must be turned over to the agency upon request. If these two agencies can find a way to cooperate better, the combination of the OFCCP’s access and the EEOC’s legal skills could radically alter the investigation and enforcement experience for federal contractors.
“Law and Order” (In a Good Way)
The good news is that Yang is an attorney with a healthy respect for the law. Many have opined that the OFCCP could return to “the bad old days” under former Director Patricia Shiu in which the agency often played fast and loose with established Title VII jurisprudence and leveraged its considerable weight to extract settlements despite the sometimes questionable legal merits of a particular case.
In contrast, Director Yang explained to Bloomberg News why the OFCCP is not appealing the agency’s recent loss in the controversial Oracle case involving allegations of pay discrimination against women and people of color to the tune of $400 million, stating simply, “We do not believe the Oracle decision accurately applied Title VII standards.”
So while the OFCCP might be turning up the heat in areas like pay discrimination, Director Yang is sending a strong message that the agency will do so within the four corners of the law, which is extremely important. Added scrutiny may or may not be a concern for your organization, but not having to guess how the laws will be applied, what evidentiary standards will be required, etc., means it will at least be a fair fight.
What Does This Mean for Me?
Employers have struggled in recent years to answer a seemingly simple question: “What should we be doing to mitigate our risk with regard to compensation?” Between Title VII, Executive Order 11246 (for federal contractors), the Equal Pay Act, and myriad state and local laws and regulations regarding pay equity and nondiscrimination, many long for an analytical “silver bullet” that will help them not only identify actual issues, but also help defend their organizations by demonstrating the legitimate, nondiscriminatory factors that can lead to the appearance of an issue where, legally, none actually exists.
That silver bullet has been elusive for a variety of reasons. Perhaps the biggest hurdle is that the factors that tend to determine employee pay, and that impact their pay during their careers, are notoriously difficult to quantify and analyze with any degree of accuracy. That is, to the extent such factors are even tracked in the first place. In the end, it always comes down to knowing why you pay your people what you do and having “the receipts” to back it up.
There are a number of firms that employ labor economists and statistical experts to help your organization on its pay equity journey, and Biddle is no exception. If you are looking for help and considering your options, consider talking to one of Biddle’s experts.
As always, if you have questions, comments, or concerns, feel free to reach out to us at firstname.lastname@example.org.