Sophisticated New Methods Aid OFCCP Search for Violators

By Gina Ruiz

Jul. 25, 2007

The past several years have ushered in significant changes in the way the Office of Federal Contract Compliance Programs achieves its primary objective of guarding against workplace discrimination based on race, gender, religion and disability.

    Experts say the agency now relies on sophisticated techniques like linear regressions and statistical data analysis to make its auditing capabilities tougher than ever.

    “There is no doubt that the OFCCP will become to the HR community what Sarbanes-Oxley was for finance and accounting professionals,” says Ted Daywalt, CEO of military job board VetJobs and OFCCP committee chair for the International Association of Employment Websites, a trade organization.

    The changes first became evident in 2003, when the OFCCP created the Division of Statistical Analyses, spearheaded by director Michael Sinclair. The division’s goal was to bring a greater level of accuracy to OFCCP investigations, says Michael Biddle, a spokesman for the federal agency.

    Since that time, Sinclair has increased the number of OFCCP agents. In addition, he has developed training initiatives to help them master statistical analysis techniques, Biddle explains.

    It appears that Sinclair’s efforts are paying off: There has been a sharp spike in settlements derived from systemic discrimination cases. Last year, companies paid more than $51 million in settlements, almost doubling the $26 million from 2003.

    Employers of all sizes and across all industries are feeling the agency’s bite. Daywalt has heard of assessments that could cost companies millions of dollars if they are found to be in violation.

    Any firm—not just federal contractors, but also subcontractors doing indirect business with the government—are subject to OFCCP assessments. Daywalt urges companies to be conservative when it comes to determining whether they need to adhere to the OFCCP rules.

    “Everybody, not just big employers and vendors in the recruiting industry, is going to have to be on their toes when it comes to compliance,” Daywalt notes. “It won’t be cheap, but it is necessary.”

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