The President yesterday unveiled his proposed FY 2016 budget for Congressional review and approval, including the OFCCP’s proposed budget. (FY 2016 will commence on October 1, 2015).
OFCCP has identified five strategic goals for FY 2016:

  1. “…to identify and address systemic pay discrimination to help narrow the persistent pay gap based on sex and race;”
  2. “…focus on the elimination of gender, racial and ethnicity-based discrimination in the construction trades;”
  3. “…perform critical upgrades of its obsolete case management system;”
  4. “…add a focus on ensuring employees and contractors have the information they need for implementing President Obama’s historic Executive Order extending nondiscrimination protections to Lesbian, Gay, Bisexual and transgendered (LGBT) employees of, and job applicants to, federal contractors;” and
  5. “…continued enforcement of the Section 503 and VEVRAA regulations implemented in FY 2014 will lead to the fair recruitment, hiring, pay, promotion and retention of veterans and individuals with disabilities in the workplace.”

Four numbers drive OFCCP’s Budget Request:

  1. OFCCP wants to add ten (10) employees to its headcount to prosecute compensation investigations;
  2. OFCCP head count has fallen almost 18% to its lowest point in the Obama Administration (down 138 employees to 650 in FY 2015 from 788 in 2010, the first full year of the Obama Administration. Compare: OFCCP employed 1,000 employees during the Reagan Administration.)
  3. OFCCP’s FY 2015 budget for 650 employees was $106,476,000 while OFCCP’s proposed budget for FY 2016 is $113, 687,000 (+$7,211,000) to support 660 employees (budget request consists primarily of wages paid to employees) ; and
  4. OFCCP’s compensation for executive service positions now averages $170,000/yr while compensation for the average GM/GS Grade (Grade 12) at OFCCP is $90,932/yr.

The Dysfunction:

OFCCP proudly boasts in its Budget Justification that its FY 2014 achievements were to:

-“…increase the number of comprehensive audits;”
-“improve the quality of its investigations including identifying cases of compensation discrimination and engage stakeholders strategically to identify victims;”

NOTE 1: “…OFCCP recovered nearly $1.5 million in back pay and salary adjustments for pay discrimination cases – a substantial increase over the prior year.”

COMMENT: $1.5M is a very small percentage of the compensation contractors paid to the approximately 4 million employees OFCCP audited in FY 2014 and represents less than a 2% violation rate from among all audits OFCCP completed in FY 2014.

NOTE 2: “In FY 2016, OFCCP anticipates potential benefits from data provided through the Equal Pay Report—a tool for contractors to provide summary data on worker compensation by demographics as described in a Notice of Proposed Rulemaking published in FY 2014. (footnote omitted) This tool will allow OFCCP to focus investigative resources on those contractors more likely to have pay discrimination violations. OFCCP also proposes an additional funding request for 10 FTE, which will be used to strengthen enforcement efforts to combat pay discrimination by focusing on gender fair pay in the workplace.”

COMMENT: Most federal contractors told OFCCP in their comments concerning OFCCP’s proposed Equal Pay Report regulations that:

  • The EPR would not likely assist OFCCP in its audit selection processes and would produce many “false negatives” and many “false positives”;
  • OFCCP’s compensation audit program has not historically produced evidence of widespread unlawful compensation discrimination;
  • The primary differentiator in pay between employees is the jobs the Applicants select and the level of their education and related work experience; and
  • The costs to contractors to respond to OFCCP’s compensation audit inquiries far exceed the small benefit to society, as measured by OFCCP’s continuing modest back pay collections.
John C. Fox
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