Optimum HR Systems

Simple solutions to potentially big problems

By Richard Warren

Recently, three articles in the HR press have shown that the consequences of bypassing commonly accepted HR best practices can have significant impact on employers.

The first article is about the increased, record number of charges filed with the EEOC: almost 100,000 new charges in 2011 and more than $364 million in back pay and penalties due to discrimination on the workplace. That combined with the $170 million in monetary benefits that the EEOC private-sector national mediation program collected for plaintiffs, puts the total penalties above one half billion dollars. 

The second article is about the new legislation on age discrimination. On November 16th, a final regulation was approved which establishes that “an employment practice that adversely impacts older workers is discriminatory unless the practice is justified by a “reasonable factor other than age” (RFOA). This rule compliments the ADEA (Age Discrimination in Employment Act from 1967 and gives more precise interpretation on RFOA, as well as emphasizes a list of factors that can determine if a case will be viewed as an age discrimination matter. (See full text of the rule) 

The third article explains that gender related compensation disparities still exist in the workplace: The U.S. Office of Accountability states: “Women in general have surpassed men in obtaining education over the last three decades, but on average, women with a high school degree or less earned lower hourly wages than men with the same level of education…Even when less-educated women and men were in the same broad industry or occupation category, these women's average hourly wage was lower than men's. GAO estimated that in 2010, less-educated women earned 86 cents--compared with 81 cents in 2000--for every dollar men earned, after adjusting for available factors that may affect pay.” (Read more here)

Age discrimination cases, resolved by the EEOC in 2010 were 63% greater than 10 years ago (24,800 vs. 15,155 respectively), representing almost 25% of all claims filed and resulting in $93 million of monetary benefits paid (see stats here). Gender discrimination was slightly more expensive - $129.3 million, and 30,914 resolutions in 2010. (See full statistics here).

Simple tools can dramatically reduce your risk of problems such as those outlined in the above articles. When was the last time you conducted a HR practice assessment? Updated your employer handbook? Reviewed your protocols for handling allegations of employment related discrimination?
If you would like to discuss any of these issues in more detail, please contact our compliance expert, Katie Birthler. 

 

Optimal Knowledge: The Harmony Issue

In a perfect world, there should be a harmony between what business goals dictate and what compliance requirements impose. This idealistic harmony rarely exists for several reasons. Some companies believe that they cannot afford to make changes in their way of doing business and adjust to a variety of compliance requirements regarding affirmative action, safety regulations, manufacturing processes or other employment related regulations.  Some other companies believe that since they are stellar performers in almost all aspects of their business they probably will not be hit by an audit. Some companies simply don’t know better – they don’t follow changing regulations, trends in auditing, etc.

All these practices can, in the end, be more costly and disruptive than complying in the first place. The goal should be to integrate compliance into every process so that it becomes automatic and you are prepared long before the auditor (inspector) shows up at your front door.

In this issue, Dick Warren writes about the recent OFCCP audit trends and suggests several steps to develop an “audit-ready” Affirmative Action Plan. With several examples of the cost of safety procedures in recent OSHA citations and the steps to avoid them, Vija Kelly stresses the fact that in most cases is less expensive to adhere strictly to the rules out of the gate than to address them after an inspection. Dick Lee speaks about another type of harmony – one that affects us all – the harmony between a costumer-centric healthcare and the business goals of the healthcare providers. His advice applies to any type of organization.

This conversation about harmony should continue at all levels in your organization. Download the Harmony issue.

OFCCP: New employee notification required

Beginning June 19, 2010, Federal contractors and their subcontractors will be required to post a notice informing employees of their rights under the National Labor Relations Act to form, join and assist a union, and to bargain collectively with their employer. Contractors and subcontractors are obliged to post notice visibly in and around their plants and offices so it can be seen by all employees covered by the NLRA.  The advice of DOL is to post the notice where other similar notices and posters are displayed in the contractor’s or subcontractor’s facilities. That includes electronically posted notices on organization’s website, specifically on the career or job section. The notice should be also translated, in cases where a significant portion of contractor's workforce is not proficient in English.

This reflects the requirements to implement the regulations under the Executive Order 13496, signed by President Obama on January 2009. To read more about thee Executive Order 13496, click here .

Clients of Optimum HR Systems, who are Federal Contractors or subcontractors to Federal Contractors can download the  posters with the notice here, or on the DOL Office of Labor-Management Standards (OLMS)  website, or request the posters from the local OFCCP field offices. The DOL will print posters and provide them to the Federal contracting departments and agencies.

Please note that after June 19, 2010 it will be against the law to not post these notices. As DOL informs us, “contractors that violate the Labor Department’s regulations requiring employee notification of these rights may be subject to sanctions, including suspension or cancellation of the contract.”

The Office of Federal Contract Compliance Programs (OFCCP) is organizing a webinar to give more details on the new notification requirements on June 3, 2010. You can obtain more info about the webinar at http://www.dol.gov/OFCCP/

NEW!!! The Power Point presentation from the June 3, 2010 OFCCP webinar is available to download here.

OFCCP Directive affecting ADA - Report form a webinar

On January 8, 2009 the OFCCP and ODEP offered an online seminar to explain what federal contractors should do to comply with the new directive affecting online applications for the disabled. Optimum HR Systems participated in the webinar and would like to share with you the main points discussed during the presentations and during the questions sessions.

The OFCCP made it clear that the federal contractor is the responsible entity for complying with the new directive. There is a long standing principle that contractors cannot delegate their compliance responsibilities. Accordingly, your website needs to be designed and built to reasonably accommodate disabled applicants. In addition, you must make sure that if you are outsourcing all or part of the screening process, your subcontractor  will need to comply with these rules from the moment a candidate is considered to be an “applicant”.

At a minimum, the beginning of your online application process should prominently display a statement of your Disability Accommodation policy and a method for individuals needing an accommodation to contact the person responsible for facilitating alternative methods of application (hard copy, fax, etc). Ideally, this information would be included on your paper applications and job announcements as well.

ODEP  discussed a resource, to determine if websites comply with the new directive. This diagnostic tool is available here.

The presentation slides are available on the OFCCP website and can be also downloaded here .

If you would like to discuss this in more detail, please contact Richard Warren, Optimum HR Systems compliance specialist.

OFCCP modifies the ‘Tipping Point Test’

In the last month or so there has been a lot of discussion on the Internet about the modified OFCCP threshold for pay differential analyses. The threshold was recently raised from 2 to 5% without much fanfare. Our understanding of the reasoning behind the change is that the old screening method, the 233 rule, was generating too many “false positives”. That is, it was producing to many apparent disparities between “protected” workers and “non-protected” workers that were easily explained by non-discriminatory reasons such as tenure, experience, job scope and the like.

The revised tipping point test, is as follows:

•    Are there differences in average pay of at least 5 percent between gender or race groups within the same pay division (Job Classification, AA Job Group, etc) that affect at least 30 females or minorities negatively?

•    Does the number of females or minorities that fall into the negatively affected pay divisions make up at least 10 percent of the entire workforce for that gender or racial group?

•    Is the percentage of the female or minority workforce in the affected pay divisions at least three times as large as the percentage of males or non-minorities in pay divisions where the males or non-minorities are affected negatively.

Our advice to our clients and friends is that it is best to proceed with caution regarding salary policy administration. You should:

•    Review the salary analysis included in your current Affirmative Action Plan … or …. do your own analysis, comparing mean salaries by job classification for males v. females and minorities v. non-minorities and highlight any disparities of 5% or more..
•    Make sure you can demonstrate that any apparent discrepancies are due to objective  criteria such as experience, tenure, job scope and the like.
•    Make sure that your processes for determining salaries are even handed, well documented and include “checks and balances” between line managers and HR.