Trump’s OFCCP Collects Record Millions in Back Wages

 

Roy Maurer By Roy Maurer October 11, 2019
LIKE SAVE

​Predictions that federal contractors would face smaller enforcement fines under the Trump administration have proved inaccurate.

Bank of America, Dell Technologies and Goldman Sachs are the latest big companies to settle workplace-discrimination allegations with the Department of Labor's Office of Federal Contract Compliance Programs (OFCCP).

The more than $21 million collected from the three employers ensures another banner year for the OFCCP. Three of the highest collection years on record have occurred during the Trump administration, and the payouts from Dell and Goldman are the largest the agency has ever obtained.

"To the extent contractors continue to harbor any illusions that OFCCP is not taking its enforcement obligations seriously, these latest statistics should wake them up to the sobering reality that they should take their compliance obligations seriously or risk significant monetary and other consequences," said Guy Brenner, a partner in the Washington, D.C., office of law firm Proskauer.

Goldman Sachs will pay almost $10 million to approximately 600 workers to settle pay-discrimination claims at its corporate headquarters in New York City. The financial services firm will also develop Functional Affirmative Action Programs, revising its current programs so they're based on business function or unit rather than geographic location. The OFCCP updated its guidelines in June to make it easier for companies to use these plans as opposed to the more traditional location-based plans.

Dell Technologies will pay $7 million to settle 20 outstanding compliance audits that found evidence of race- and gender-based wage discrimination affecting a class of about 5,475 workers. Bank of America agreed to pay $4.2 million in back wages to resolve hiring-bias violations based on race and sex found at six of the bank's facilities in four states.

The agency has ongoing litigation against JPMorgan Chase & Co., which has been accused of paying women less than men in technology roles, and against Oracle, alleged to owe female, Asian and black workers $400 million in shorted wages.

"In each case, the employer released a statement noting that OFCCP's claims resulted from statistical analyses by the agency that the contractor disputed," said Connie Bertram, an attorney in Polsinelli's Washington, D.C., office. "These major settlements emphasize the need for thorough self-auditing to identify and fix potential compensation and hiring vulnerabilities before contractors are required to submit data for OFCCP review and analysis as part of compliance evaluations."

[SHRM members-only toolkit: Managing Federal Contractor Affirmative Action Programs]

Early Resolution Initiative Nets Results

Both Goldman and Dell agreed to the agency's newly established "early resolution" agreements. Begun in November 2018, OFCCP's Early Resolution Procedures directive was designed to address a long-standing frustration at the agency, Bertram explained.

Previously, an OFCCP compliance audit involved a review of a single establishment or business unit. When technical violations or discriminatory practices were found, OFCCP did not have a mechanism for addressing similar violations at other establishments or business units, Bertram said.

"The directive offers OFCCP and contractors a mechanism for undertaking a mini-audit focused on specific technical violations or findings of discrimination," she said. "After the desk audit for technical violations or a truncated onsite [investigation] for potential findings of discrimination, OFCCP can propose an early resolution conciliation agreement that resolves the violation at both the establishment under audit and at other establishments of the contractor covered by the agreement."

The procedures allow OFCCP and contractors with multiple establishments to implement corporatewide compliance with regulations and resolve identified issues in return for five years' exemption from future random OFCCP audits.

The contractor would be required to provide periodic reports to the agency, and OFCCP would have the right to investigate individual claims of discrimination and suspected violations of the agreement.

LIKE SAVE

Job Finder

Find an HR Job Near You
Search Jobs

SPONSOR OFFERS

Find the Right Vendor for Your HR Needs

SHRM’s HR Vendor Directory contains over 10,000 companies

Search & Connect

HR Daily Newsletter

News, trends and analysis, as well as breaking news alerts, to help HR professionals do their jobs better each business day.
temp_image