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SSEG Frequently Asked Questions

Similarly Situated Employee Groups (SSEGs) - FAQs

OFCCP's Compliance Manual (www.dol.gov) specifies that AAP Job Groups must consist of a group of jobs that are similar in content, wage rates, and opportunities:

  1. Similar work content: Similarity of work content refers to the duties and responsibilities of the job titles which make up the job group.
  2. Similar rates of pay: Pay rates should be reviewed in conjunction with job content. Large apparent differences in pay, when associated with differences in job title and/or location within an organization, suggest an unacceptable job grouping.
  3. Similar opportunities: Opportunity refers to the ability to take advantage of training opportunities, transfers, promotions, mobility to desirable wage/salary situations, and other employment benefits. Most often, it refers to upward mobility.

On the other hand, the goal of SSEGs is to combine employees based upon additional factors such as level of responsibility, skills, and qualifications. Another difference is that SSEGs should be based upon an individual employee-level review. There are times when even job titles are too broad to be considered SSEGs and must be split to create more appropriate groupings (e.g., when organizations assign broad job titles such as "Manager" or "Supervisor" to employees performing dramatically different work).

Yes and no. AAP Job Groups are necessary for preparing AAPs. SSEGs become a necessity if OFCCP is conducting an audit that involves compensation. They should also be created for proactive compensation analyses.

SSEGs that are most likely to evade scrutiny under audit are those that meet OFCCP's proposed sample size criteria. This factor is listed first because the OFCCP is most likely to "red flag" employers that have divided their workforce into SSEGs that are so small that meaningful statistical analyses cannot be conducted. If an employer creates SSEGs that contain too few employees for a SSEG-by-SSEG analysis using conventional regression techniques, they will conduct a "pooled regression" approach that attempts to aggregate your entire workforce into a single analysis. If SSEG groupings are challenged, the obvious best defense is having a systematic and documented process that was used to assign each employee to SSEGs using an objective approach that considered the four primary factors.

OFCCP uses a technique called "Hierarchical Cluster Analysis" to statistically create SSEGs before coming to an employer's site to consider job analysis and interview data for creating SSEGs. Cluster analysis is a "first pass" way of creating SSEGs that considers only statistical markers in the data (e.g., job title, job group, job site, etc.). If the audit escalates and OFCCP comes onsite to conduct employee interviews and review job description/job analysis data they will ask the employer to "sign off" on the SSEGs prior to conducting any regression analyses.

Although SSEGs of 30+ employees are mentioned in the proposed regulations, it is our opinion that employees who are dissimilar with respect to the four SSEG criteria should not be combined into SSEGs for analysis purposes. OFCCP’s proposed guidance of having 30 employees in each SSEG is a purely a statistical desire and should never outweigh the need to analyze only those employees who are similarly situated. There are other types of statistical and non-statistical analyses that can be performed on groups with less than 30 employees.

It comes down to this . . . if you want to avoid scrutiny of your SSEGs then it’s necessary to create SSEGs that meet the OFCCP's minimum sample size requirements. If you feel that your organization has created valid, defensible SSEGs then our opinion is that all analyses should be based upon the groupings as they are created.

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