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Did government contractors pay more financial remedies to settle Labor Department class discrimination claims during the Bill Clinton, George W. Bush or Barack Obama years? Well, it depends on the calculation used.
The question of which administration’s enforcement approach secured more money for workers may become significant as a new labor secretary is confirmed and the DOL’s Office of Federal Contract Compliance Programs gains new leadership. The agency audits roughly 2 percent of about 200,000 federal contractor locations annually for affirmative action and nondiscrimination compliance.
The OFCCP under President Donald Trump will likely adopt its own audit strategy, perhaps a more “ business friendly” approach than the Obama administration took, Matt Nusbaum, senior counsel and director of OFCCP compliance policy for the Equal Employment Advisory Council, told Bloomberg BNA. The EEAC is a nonprofit employer association in Washington.
The agency will also likely look for an operational model focused on efficiency, as a budget reduction is anticipated in light of Trump’s proposed 21 percent funding cut for the DOL as a whole.
“Reinventing the wheel doesn’t scream efficiency,” Nusbaum said.
As such, the Trump administration may consider the two most recent approaches, from Bush and Obama, as it determines its own direction for the OFCCP.
An apples-to-apples comparison of settlement dollars across the last three administrations is difficult because each included different data in the recoveries reported, according to a Bloomberg BNA analysis. But if only back pay recovered for applicants and employees is taken into account, then total monetary relief collected in settlements by the OFCCP in each administration is in roughly the same ballpark—$80 million to $100—despite differences in budgets, staffing levels and enforcement priorities.
The OFCCP’s annual budget hovered between $105 million and $106.5 million during the Obama administration.
It employed a high of about 755 employees in fiscal 2011. The agency currently has about 615 employees.
Under the Bush administration, the agency received between $76 million and $81 million annually. It had a high of 776 employees in fiscal 2001, but that number dropped to about 576 by fiscal year 2008.
Budget and staffing information was more difficult to dig up for the Clinton administration.
The agency had a staff of about 816 in fiscal 1993, and that number fluctuated downward before climbing back up to about 811 in fiscal 2000.
Clinton OFCCP budgets fell within roughly $57 million and $66 million in the 1990s, but eventually reached $73.3 million in fiscal 2000, according to past Bloomberg BNA reports.
The Bush administration refined a tiered audit approach that originated under the Clinton administration.
The agency, under “active case management,” would close a compliance review if an abbreviated desk audit of a contractor’s employment data revealed no statistical indicators of discrimination.
The OFCCP under Obama, by contrast, conducted more comprehensive compliance reviews using an approach known as “ active case enforcement.”
Both employee-side and management-side stakeholders have previously speculated that budget cuts might lead the OFCCP to return to some form of tiered audits, but that remains to be seen.
Management-side representatives have been critical of the OFCCP’s approach under the Obama administration, with some viewing it as inefficient because it led to lengthier audits of fewer contractor facilities and lower monetary recoveries.
But Obama-era OFCCP officials countered that, on average, the agency remedied as many class members as it had in prior years with half the cases.
So who’s right? Turns out, it could be both.
The Bush administration’s OFCCP, at first blush, appears to have obtained more financial remedies.
It recovered about $262.5 million in remedies from discrimination settlements between fiscal years 2001 and 2007, according to one Bush-era document. The Bush OFCCP also reported about $67.5 million in remedies in fiscal 2008, bringing the total amount over an eight-year span to roughly $329.5 million.
But a closer look at the reported numbers reveals that the Bush OFCCP added annualized salaries and benefits to its calculations for back pay and interest obtained for class members.
Annualized salaries and benefits were estimates based on the number of class members that the OFCCP determined through statistical analysis should have been hired if not for alleged discrimination, David Cohen, president of DCI Consulting Inc. in Washington, told Bloomberg BNA. Cohen is also a co-chair of the OFCCP Policy Institute.
Say, for example, the OFCCP and a federal contractor settle sex discrimination in hiring allegations. The contractor agrees to pay $50,000 in back pay to a class of female applicants to settle the claims. The OFCCP also determines that 10 women should have been hired.
Assuming that the average salary for those positions is calculated to be $100,000, the OFCCP under the Bush administration would multiply that figure against the number of class members that should have been hired, Cohen said. That amounts to $1 million.
The Bush administration would then report the financial remedy obtained as $1,050,000—that is, $50,000 in back pay plus the $1 million in annualized salaries.
By contrast, the OFCCP under the Obama administration included only back pay and interest, if applicable, when reporting its monetary recoveries.
“The problem with annualized salary was that it was not an amount paid to the class under the terms of the agreement, and it was hypothetical,” Pamela Coukos, a former Obama-era OFCCP senior program adviser, told Bloomberg BNA.
Sometimes fewer class members apply for jobs negotiated in a settlement, some job offers remain unfilled, or workers leave in less than a year, said Coukos, who’s now a co-founder and principal of Working IDEAL, a consulting firm in Washington that advises employers on how to develop a diverse recruitment pool.
Adding annualized salaries to recoveries “also could massively over-inflate recovery amounts,” she said.
The Obama OFCCP obtained about $85.9 million in back pay and interest for class members between fiscal years 2009 and 2016, according to government data.
The numbers stem from settlements reached in audits and separate complaint investigations. It’s unclear whether the Bush monetary figures also included complaint investigation settlements.
Using the Obama administration’s calculations, the Bush administration’s recoveries may be much lower than $329.5 million.
To illustrate, the Bush administration said it collected about $29 million, $51.7 million and $67.5 million in financial remedies in fiscals 2001, 2007 and 2008, respectively.
But when annualized salaries and benefits are removed from the calculation, those numbers drop to about $9 million, $15.3 million and $17.1 million.
“Using a calculation of a hypothetical amount that a contractor was not formally required to pay under the agreement and adding 300 percent to the back pay doesn’t seem like a good way of understanding how an agency is performing its mission,” Coukos said.
Documents showing an apples-to-apples comparison for financial recoveries across administrations don’t appear to be publicly available. And the OFCCP denied Bloomberg BNA’s recent Freedom of Information Act request for such information.
Former Clinton and Bush officials contacted by Bloomberg BNA either declined to comment or weren’t immediately available to comment.
Assuming that back pay and interest constituted 25 percent to 30 percent of the Bush administration’s remedies, those recoveries could fall anywhere between $82.4 million and $99 million, give or take, between fiscals 2001 and 2008.
Previous administrations also used the annualized salary calculation.
But the Bill Clinton administration appears to have reported recoveries under two calculations, according to an OFCCP accomplishment data chart obtained by Bloomberg BNA.
The Clinton OFCCP reported monetary recoveries based on “backpay agreements” and “total agreements,” which seemingly includes annualized salaries, as those numbers align with the Bush-era figures.
The Clinton administration’s back pay collections totaled about $100.4 million between fiscal years 1993 and 2000. It listed about $274.5 million in “total agreements” in that same time period.
It’s unclear whether those monetary figures combine audit and complaint investigation settlements.
Given the differences in how financial remedies are calculated, it’s difficult to compare those numbers across administrations, the practitioners said.
Still, Coukos said the Bush and Obama administration financial recoveries—if focused only on back pay and interest—were “generally in the same ballpark.”
“There were no order of magnitude changes between the Bush and Obama administrations as I recall the numbers, but priorities shifted,” she said.
Management-side stakeholders like Cohen and Nusbaum generally agreed, but with caveats.
“If you look at financial settlements from Bush through Obama, they’re really no different except for the fact that the Obama administration had an increase in about 200 staff and some $20 million in budget,” Cohen said.
But perhaps monetary relief collected from settlements might not necessarily be the best measure of the OFCCP’s efficiency or effectiveness, the practitioners said.
To contact the reporter on this story: Jay-Anne B. Casuga in Washington at email@example.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
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