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OFCCP targets compensation: are you ready?

Written by Husch Blackwell LLP Tuesday, 23 August 2011 23:00

In June 2011, the Office of Federal Contract Compliance Programs (OFCCP) settled a pay discrimination lawsuit against AstraZeneca, one of the largest pharmaceutical companies. The settlement is notable not just for the salary adjustments AstraZeneca agreed to make, but more for the wide-ranging, prospective action to which AstraZeneca agreed.

In discussing the settlement, OFCCP Director Patricia Shiu highlighted the steps the OFCCP is taking to aggressively combat pay discrimination. More recently, on July 1, 2011, Secretary of Labor Hilda Solis spoke about the OFCCP's efforts to end pay discrimination as one of three key enforcement efforts by the agency and on August 10, 2011, it began the formal rulemaking process to develop a tool to gather compensation data from federal contractors. We recommend a close look at your compensation practices now, to avoid future problems with the OFCCP as well as with private plaintiffs.

In early June 2011, AstraZeneca agreed to pay $250,000 to 124 women in order to settle a lawsuit claiming pay discrimination against female sales specialists at its Philadelphia business center. The OFCCP claimed the female sales specialists had been paid, on average, $1,700 less than male sales specialists. AstraZeneca agreed not only to provide back pay for the women covered by the lawsuit, but agreed to work prospectively to with the OFCCP to conduct statistical analyses of pay for hundreds of employees in 13 states and the District of Columbia, and to make salary adjustments as needed. A copy of the Consent Decree can be accessed here.

In commenting on the Astra Zeneca settlement, OFCCP Director Shiu highlighted three problems that needed to be addressed to help close the pay gap: (1) a better way to collect good data from employers, "to identify and root out discrimination"; (2) better regulations regarding pay secrecy, which would allow women to talk openly about their salaries; and (3) education of workers and employers about their rights and obligations. Director Shiu stated the agency would address these issues by proposing a new data collection tool for compensation and new regulations, and by "aggressively going after employers who discriminate."

In July 2011, Secretary of Labor Solis spoke at an employment lawyers' convention, focusing on the OFCCP's enforcement efforts to end pay discrimination, among a few other goals. Concerning efforts to end pay discrimination, Secretary Solis highlighted that the OFCCP is "dramatically" shifting its enforcement priorities. She noted that in 2010, 14 percent of the OFCCP's investigations involved compensation and she anticipated that the percentage would increase in 2011 to between 20 and 40 percent of all investigations.

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