My Conversation with OFCCP Director Shiu about “Good Jobs For Everyone”

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Secretary Hilda Solis' vision of "Good Jobs For Everyone" was articulated in the Department of Labor's Strategic Plan for the years 2011 to 2016. All of the agencies within the DOL are working to achieve that goal, and OFCCP is no exception. I recently had the opportunity to talk one-on-one with OFCCP Director Patricia Shiu about how her agency is fulfilling that vision.

On June 21, 2012 Director Shiu appeared as a guest on my weekly radio show, The Proactive Employer. In her overview of the role her agency plays, she described OFCCP not only as a worker protection agency, but also as an engine of economic growth and opportunity. She pointed out that approximately 25% of the American workforce is employed by federal contractors and subcontractors, accounting for more than $700 billion in taxpayer dollars and taxpayer business. That's a substantial part of the United States economy, and Director Shiu sees OFCCP as having a pivotal role in the socioeconomic development of the country:

"We're trying to be part of a much larger vision, which is an economy that's built to last, and what we do quite frankly helps to build a very solid middle class. That's so important, as you know, for our economic recovery."

Exactly how does OFCCP help to build a solid middle class? By leveling the playing field and ensuring everyone has a fair shot at getting a good job, according to Director Shiu.

OFCCP is leveling the playing field three ways: (a) enforcement of civil rights laws prohibiting discrimination on the basis of race, sex, national origin, color, religion, disability status, and protected veteran status, (b) a robust regulatory agenda, and (c) outreach and communications programs.

Director Shiu and I discussed OFCCP's very active and robust regulatory agenda. The agency is proposing a number of regulatory changes – described by Director Shiu as 'updates':

"Many of these regulations are 30 or 40 years old, and we're trying to update them and make them more workable, and make them more strategically designed to achieve Secretary Solis' vision of 'Good Jobs For Everyone.'"

We talked specifically about some of OFCCP's proposed regulatory changes, including the establishment of a hiring goal of 7% for individuals with disabilities and hiring benchmarks for protected veterans. Director Shiu stated "what gets measured gets done." By quantifying an aspirational goal for individuals with disabilities and creating a hiring benchmark for protected veterans, she believes that affirmative action requirements for these two groups will be "raised up." She pointed out that what OFCCP is proposing is "really no different than what has been going on when it comes to race and sex for decades and decades."

Director Shiu also made it clear that goals and benchmarks are only one piece of the process. She stated:

"It's all of the steps before that contractors have to take in order to make sure that they're doing everything possible at every stage of employment in order to ensure that they have a robust applicant pool of qualified people with disabilities, of qualified protected veterans. That means you have to do really good outreach. That means you have to do really good recruitment. That means you have to think about what in your company you need and who are the kind of people with those sorts of skills that will bring the kind of experience that you want, and that means you're going to have to think about your outreach in a different way."

There has been a lot of discussion about both the proposed benchmark and goal. Some of that discussion has focused on whether these two measures are really quotas. Director Shiu addressed this issue head on, stating "neither are quotas, and quite frankly it's kind of offensive to me." She went on to explain that affirmative action has never been about quotas with respect to women and minorities, and it's not about quotas when it comes to protected veterans or individuals with disabilities.

Another part of creating "Good Jobs For Everyone" is ensuring employees are paid fairly. Compensation has been an issue at the top of OFCCP's regulatory agenda – and also at the top of the Obama administration's agenda – for some time. In our discussion about OFCCP's proposed changes with respect to compensation, Director Shiu said "what's really important here, I think, is to put this problem into context." She pointed out that it's been nearly fifty years since President Kennedy signed the Equal Pay Act and stated that women "still earn anywhere from 23 to 20 cents less per hour."

I think it's important to note that the statistic referenced by Director Shiu is the raw wage gap, and compares all men to all women. If we control for differences in occupation, industry, labor market experience, education, union status, full time or part time status, hours worked, etc., the gender wage gap falls significantly. Some studies estimate the adjusted gender wage gap at 8 or 9 cents per hour after controlling for these factors, and those estimates don't account for differences in willingness to engage in compensation negotiations, the cash / benefits tradeoff, differences in caregiving responsibilities by gender in our society, etc.

Director Shiu's passion about gender pay equity was evident from her remarks:

"You know, if people can't be paid fairly for the work that they do, then we've really got a problem here. Over the course of a lifetime, a woman who does not get paid fairly – let's talk about a Lilly Ledbetter... She will lose approximately $380,000… That is a huge amount of money that makes a difference in how families survive, educational opportunities, where people live, what they eat. You know, think about that – think about how much that would make a difference for the regular working class, middle class family. Huge, huge difference. And it's about time that we actually took seriously this wage disparity and tried to resolve it."

Director Shiu said that OFCCP's new guidance on compensation would do just that.

It was also apparent from our discussion that OFCCP is actively seeking input from its stakeholders on all of its proposed changes and updates. Director Shiu pointed out that OFCCP takes very seriously the constructive and helpful comments submitted by stakeholders in response to Notices of Proposed Rulemaking. She stated "we read every comment and we analyze every comment. We think about every comment, we discuss them."

Director Shiu noted, however, that the 7,000 plus comments received in response to the Compensation Data Collection Tool NPRM were "not particularly constructive or helpful." She stated:

"Many of them did not answer the question that we asked. We asked how you gather your data. Instead what we got was a lot of responses that tried to presuppose what the data collection tool was going to look like, and then try and argue why it wouldn't work."

The Compensation Data Collection Tool is still in the clearance phase and has not yet been finalized. Because of that, Director Shiu couldn't comment further on the tool, but assured me that "we're still working on it."

I also asked Director Shiu about the proposed rescission of the Compensation Standards and Guidelines.

"The 2006 guidance is unnecessarily narrow and does not comport with Title VII principles of law. And to that extent, because under the Executive Order, we follow Title VII's principles, there's no reason why our compensation analysis, whether it's based on sex discrimination or race discrimination, should be unduly hampered by guidance that requires things such as regression analyses or class sizes of a certain number. The fact of the matter is, you know, as someone who's done compensation discrimination cases in my previous life, including class action cases, I can tell you there are a lot of different ways to prove compensation discrimination cases. This narrows it in such a way that you can only look at certain kinds of job groups, and that – quite frankly – is just not what happens out in the real world."

This is an issue on which I don't think Director Shiu and I will ever completely agree. It's true that there are a lot of different ways to prove compensation discrimination. Anecdotal evidence plays a role, as do simple workforce-wide calculations of average pay by gender, race, etc. But, based on my experience as a consulting and testifying expert in compensation discrimination matters – including class action cases – regression analysis is exactly what happens out in the real world. In order to make a scientifically sound assessment regarding the presence or absence of discrimination, it's necessary to examine compensation among similarly situated employees with formal statistical tools. My experience in performing compensation analyses – and reviewing compensation analysis reports prepared by other experts – indicates that regression analysis is the preferred formal statistical tool for examining compensation.

In fairness to Director Shiu, she is not suggesting that OFCCP will never use regression analysis, abandoning it totally and permanently. My hope is that OFCCP will continue to examine questions of compensation discrimination through a combination of regression analysis and other formal statistical tools, as well as other non-statistical techniques derived from broader Title VII principles.

Our discussion also clearly indicated that the worker protection side of OFCCP hasn't disappeared in the shadow of regulatory issues. The agency has recently undertaken a worker outreach program. Director Shiu noted that "it's important for workers and their advocates to know that OFCCP exists, so that we can serve the affected workers." There's also a communications component; Director Shiu said that it was very important that "our message gets out, our stories get out." Just a few days ago, (Work in Progress): The Official Blog of the U.S. Department of Labor published a post announcing the world premiere of Opening Doors, a short film that tells the story of OFCCP through the eyes of three individuals. According to the post, "in this mini-documentary, you will learn about each of these people and how OFCCP successfully defended their rights in the workplace." You can read the post and view the film here.

While Director Shiu assured that OFCCP will continue to provide technical assistance to the contractor community, it does seem like the emphasis of outreach and education has shifted from employer to employee. A similar shift has also occurred at other agencies within the Department of Labor, most notably the Wage and Hour Division.

Nonetheless, OFCCP does seem committed to working with employers. When I asked her what she'd like people to know about OFCCP, Director Shiu said:

"I think the bottom line is that the OFCCP is here – ready, willing and able – to work with the business community and to work with all of its stakeholders to achieve Secretary Solis' mission of 'Good Jobs For Everyone.' That's why I was so excited about this meeting… with some of the heads of major corporations, because there are a lot of common interests. There are a lot of people in business that want to do this, so we have to begin to define what success looks like. And I'm very confident that working together we can do that."

If you'd like to listen to my full interview with Director Shiu, as well as follow-up comments from John Fox, Esq., you can access it here.