The Blueprint:Case Studies in Effective
Compliance
Office of Federal Contract Compliance ProgramsOffice of Federal Contract Compliance Programs
Greta Young
Phoenix District OfficeNovember 15th, 2011
Presentation Overview Discrimination Defined
Case Study #1: Mediocre Management Solutions
Identifying Disparate Impact (IRA)
Overview of the Uniform Guidelines on EmployeeSelection Procedures (UGESP)
Case Study #2: Inferior Industries
Relevance to AAPs and Discrimination Findings
OFCCP Application and Use in ComplianceEvaluations
Case Study #3: Exemplary Electronics
Question & Answer
Disparate TreatmentDiscrimination resulting from one or more individualsdenying an employment opportunity, benefit, orotherwise treating qualified individuals differentlydue to his or her race, gender, national origin, color,religion, disability, and/or status as a protectedveteran
Disparate ImpactDiscrimination resulting from a facially neutral policyor practice disproportionately eliminating qualified,protected applicants and/or employees
Theories of Discrimination
Theories of Discrimination
Disparate Treatment• Adverse Action• Intent
Disparate Impact• Adverse Action• Result of a Process
Continued
IdentifyingDisparate Impact
41 CFR 60-3.4 (D)
“A selection rate for any race, sex, orethnic group which is less than 4/5ths ofthe rate for the group with the highestrate will generally be regarded…asevidence of adverse impact.”
Referred to as the 80% rule or 4/5ths rule
IdentifyingDisparate Impact
41 CFR 60-3.4 (C)
“If the…total selection processfor a job has an adverse impact,the individual components of theselection process should beevaluated for adverse impact.”
Continued
Discrimination:Defined
41 CFR 60-3.3 (A)
“The use of any selection procedure which has anadverse impact on the…members of any race, sex,or ethnic group will be considered to bediscriminatory and inconsistent with theseguidelines, unless the procedure has been validatedin accordance with these guidelines, or theprovisions of section 6 of this part are satisfied”
Mediocre Management Solutions is a growing companyproviding human resource consulting and financialservices. They recently opened a new office and hiredseveral business analysts.
• Mediocre Management Solutions received 72 totalapplications (41 minorities and 31 non-minorities).
• The company made 9 hires (1 minority and 8 non-minorities).
• Hiring process consists of application, phone screen, in-person interview, and background check.
Case Study #1:MEDIOCRE MANAGEMENT SOLUTIONS
Case Study #1:MEDIOCRE MANAGEMENT SOLUTIONS
Total Non-Min Hires
Total Non-Min Applicants
8 Non-Min Hires
31 Non-Min Applicants.02
Total Minority Hires
Total Minority Applicants
1 Minority Hires
41 Minority Applicants.02 / .08= .26
The app/hire data is applied in the formula below todetermine the favored group and identify potentialadverse impact.
GroupTotal
ApplicantsTotal Hires
Non-Min 31 8
Min 41 1
/ = ImpactRatio
The Formula:
= .26=
Case Study #1:MEDIOCRE MANAGEMENT SOLUTIONS
Case Study #1:MEDIOCRE MANAGEMENT SOLUTIONS
DisfavoredGroup
80% Rule?AdverseImpact?
Minorities 8% YES
Compare the final impact ratio percentage to the 80%rule-of-thumb used by agencies to measure selectionrates.
Conclusion: A .08 impact ratio for minoritieswarrants further investigation8% < 80%
Case Study #1:MEDIOCRE MANAGEMENT SOLUTIONS
Case Study #1:MEDIOCRE MANAGEMENT SOLUTIONS
ApplicantID #
Explanation for Hire
00011 Applicant has degree incomputer science
00017 More years of prior experience;worked for a direct competitor
00022 Greater fluency in HTML, XHTML,CSS, and SQL
00041 Relevant training in projectmanagement
Case Study #1:MEDIOCRE MANAGEMENT SOLUTIONS
Case Study #1:MEDIOCRE MANAGEMENT SOLUTIONS
The Selection Process:
Total Selection Process:• Total pool of eligible candidates• Actual candidates selected
Components of a Selection Process:• Every step in the process where one
or more candidates are eliminatedfrom further consideration
The Selection Process:
Components of a Selection Process:Examples of Individual Components
•Application Screen
•Job Skills & Knowledge Tests
•Interviews
•Pre-employment tests
•Final Hiring Decision
Continued
The Selection Process:
Any event in the selection
process where some candidates
pass and others fail can be
measured for adverse impact;
Continued
Therefore, ALL of these events are…
41 CFR 60-3.2 (B)
Employment Decisions
“These guidelines apply to tests and otherselection procedures which are used as a basis forany employment decision.”
“Employment decisions include but are not limitedto hiring, promotion, demotion, membership,referral, retention, and licensing and certification.”
The total selection process is made up ofindividual components where candidateseither pass or fail – tests.
Adverse Impact: The overall selection ratefor any group (race, sex, ethnicity) is lessthan 4/5ths of any other group.
The use of any selection procedure causingadverse impact is discriminatory unlessjustified in accordance with…
Uniform Guidelines onEmployee Selection Procedures
title 41, part 60-3, sections 1 - 18
“These guidelines incorporate a single set of principles which aredesigned to assist employers…to comply with requirements of federal
law…they are designed to provide a framework for determining theproper use of…selection procedures. 41 CFR 60-3.1: Statement of purpose
Overview of Key Principles
60-3.3: Discrimination DefinedA. Procedure having adverse impact constitutes
discrimination unless justified
B. Consideration of alternative procedures
60-3.4: Information on ImpactA. Records concerning impact
B. Applicable race and gender groups
C. Evaluation of selection rates
D. Adverse Impact (the 4/5th rule)
E. EEO Posture
continued
Overview of Key Principles
60-3.5: Standards for validity studiesA. Acceptable types of validity studies
B. Criterion-related, content, construct validity
D. Need for documentation
G. Method of use
K. Currency
60-3.6: Use of procedures not validatedA. Alternative procedures to eliminate impact
60-3.3 (B): Where validation is not feasiblealternative selection procedures withoutadverse impact must be instituted
60-3.6 (A): Alternative procedures should:1. Eliminate adverse impact in the total selection process;
2. Be lawful, and;
3. Be as job related as possible.
continued
Overview of Key Principles
continued
Overview of Key Principles
60-3.10: Employment Agencies & ServicesA. Selection procedures devised by an agency
Use of an agency does NOT relieve anemployer of EEO obligations under Federal law
60-3.11: Disparate TreatmentA. No selection procedure, regardless of
validation, can be imposed upon membersof a race, gender, etc where otheremployees, applicants, etc have not beensubject
OFCCP Application
Provide a framework for investigatingdiscrimination indicators
Standardize procedures to facilitateconsistency in EEO/AA law enforcement
Codify various court decisions concerningstatistical interpretation, discriminatoryactivity, and employer responsibilities
OFCCP Application
Outline methods and procedures forreviewing the validity of selectionprocedures consistent with court decisions
Specify records and documents to reviewduring compliance evaluations andcomplaint investigations
Give Federal contractors due notice ofexpectations and requirements ofselection procedure evaluation
continued
Relevance to AAPs Although different, the guidelines are
related to, and influence, the compositionof AAPs
Do not relieve any AA obligations
Encourage development and effectiveimplementation of AAPs
OFCCP considers overall EEO posture priorto instituting action against contractors
The guidelines do not preclude the use ofprocedures to achieve AA objectives
Relevance to AAPs Self-evaluation and development of
action-oriented programs requiredelements of AAPs
Guidelines clarify how adverse impact isdetermined, actions to take when adverseimpact is identified, required records anddocuments, and reporting
Should be addressed in ID of problemareas, development of action-orientedprograms, and internal auditing
continued
Relevance to AAPs Identify adverse impact in total selection
processes
Analyze specific components of a selectionprocedure for adverse impact Any action taken where applicants &
candidates pass or fail
Identify specific actions resulting inadverse impact and validate Consider alternative procedures
Maintain ALL relevant documentation
continued
Inferior Industries had recently landed several largeclients and was hiring for account representativepositions.
• Minimum Requirements: A high school diploma orequivalent, two years billing/accounts receivableexperience, and knowledge of computer systems.
• Inferior Industries received 225 total applicants meetingthe minimum requirements (161 males and 64 females).
• The company made 57 total hires (35 males and 22females).
Case Study #2:INFERIOR INDUSTRIES, INC.
Case Study #2:INFERIOR INDUSTRIES, INC.
.64Total Female Hires
Total Female Applicants.34.22
22 Female Hires
64 Female Applicants
The personnel activity data is applied in the formula below todetermine the favored group and identify potential adverseimpact.
GroupTotal
ApplicantsTotal Hires
Males 161 35
Females 64 22
/ = ImpactRatio
The Formula:
Total Male Hires
Total Male Applicants
35 Male Hires
161 Male Applicants /= = .34.22 =“The materials and content presented by DOL are intended to provide general information, and not specific, legal or other advice. DOL strongly encourages you to seek appropriate guidance to assess your specific needs and circumstances."
Case Study #2:INFERIOR INDUSTRIES, INC.
Case Study #2:INFERIOR INDUSTRIES, INC.
Using the 80% rule-of-thumb, the hiring process at InferiorIndustries resulted in adverse impact affecting males.
DisfavoredGroup
80% Rule?AdverseImpact?
Males 64% YES
Conclusion: A 64% impact ratio for males warrantsfurther investigation of selection process64%< 80%
“The materials and content presented by DOL are intended to provide general information, and not specific, legal or other advice. DOL strongly encourages you to seek appropriate guidance to assess your specific needs and circumstances."
Case Study #2:INFERIOR INDUSTRIES, INC.
Case Study #2:INFERIOR INDUSTRIES, INC.
Identification of Problem Areas
(41 CFR 60-2.17 (b))
Each year, The Company performs in-depth analysesof its total employment process to determinewhether obstacles to equal opportunity exist.
Case Study #2:INFERIOR INDUSTRIES, INC.
Case Study #2:INFERIOR INDUSTRIES, INC.
Compliance Evaluations
OFCCP review process mirrors contractors’self-evaluation process
Major difference: Interpretation Evaluate contractors’ proactive response to
identified adverse impact
Determine quality/availability of records
Refine data analyses; determine causality
Assess compliance w/validation requirements
Determine if discrimination occurred
Exemplary Electronics is a proactive federalcontractor who sells computer parts andaccessories to several government agencies.
• Exemplary Electronics received 138 totalapplications (102 females and 36 males)
• 92 applicants were selected for hire (60 femalesand 32 males)
• Selection process consisted of initial application,phone screen, in-person interview, and referencecheck
Case Study #3:EXEMPLARY ELECTRONICS
Case Study #3:EXEMPLARY ELECTRONICS
Total Male Hires
Total Male Applicants.89.59
32 Male Hires
36 Male Applicants
Exemplary Electronics conducted an Impact RatioAnalysis on their total selection process, whichproduced the following results:
GroupTotal
ApplicantsTotal Hires
Males 36 32
Females 102 60
/ = ImpactRatio
The Formula:
Total Female Hires
Total Female Applicants
60 Female Hires
102 Female Applicants /= = .89.59 = .66
Case Study #3:EXEMPLARY ELECTRONICS
Case Study #3:EXEMPLARY ELECTRONICS
Since the selection rate for females was 66% that of theselection rate for males, using the 80% rule-of-thumb,Exemplary Electronics identified adverse impact affectingfemales.
DisfavoredGroup
80% Rule?AdverseImpact?
Females 66% YES
Conclusion: A 66% impact ratio for femaleswarrants further investigation66%< 80%
Case Study #3:EXEMPLARY ELECTRONICS
Case Study #3:EXEMPLARY ELECTRONICS
Process Evaluation
Applicant Pool
138 total applications received102 female / 36 male
138 pass phone screen102 female / 36 male
96 pass 1st interview60 female / 36 male
92 pass reference check60 female / 32 male
Applicant Pool:74% female / 26% male
Process Evaluation
Do the Math!
Applicant Pool:74% female / 26% male
Selection Rate: Screen100% female / 100% male
Selection Rate: Interview59% female / 100% male
Selection Rate: Reference Check100% female / 89% male
Screen: 1.0 IRA
Interview: .59 IRA
Check: .89 IRA
Exemplary Electronics implemented a variety ofmeasures to eliminate the adverse impact in the hiringprocess:
• Standardized their interview process
• Instituted a scoring system
• Provided training to management & other decision-makers
Case Study #3:EXEMPLARY ELECTRONICS
Case Study #3:EXEMPLARY ELECTRONICS
As a result of their multiple action steps, ExemplaryElectronics was able to eliminate adverse impactcome their next 6-month reporting period.
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