Tuesday, June 18, 2019

Contractor Agrees to Pay $50 Thousand in Back Wages to Resolve Discrimination Allegations

The Department of Labor has a number of divisions tasked with contractor compliance with various labor laws. In the past few months, we have reported on actions by the Labor Department's Wage and Hour Division (WHD) to ensure compliance with primarily the Davis-Bacon Act and the Service Contracting Act. Where violations (or noncompliances) are found, contractors usually agree to make up for shortages in wages and fringe benefits. Occasionally, especially in the case of repeat offenders, the WHD can take more drastic action such as 'debarment' where, for a period of time, recalcitrant contractors can no more Government contracts.

A second Labor Department division tasked with compliance is the Office of Federal Contract Compliance Programs (OFCCP). This division, as the name implies, is only interested in Government contractors and grantees. Its primary focus is not a law at all but an Executive Order (EO No. 11246) which prohibits federal contractors and federally-assisted construction contractors and subcontractors, who do over $10 thousand in Government business in one year from discriminating in employment decisions on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin. The EO also requires Government contractors to take affirmative action to ensure that equal opportunity is provided in all aspects of their employment.

Most of the compliance evaluations performed by OFCCP are routine, probably randomly selected, however there is nothing to prevent the Office from following up on leads and/or hotline complaints.
Recently, after a routine compliance evaluation of a federal contractors subsidiary of Cummins Diesel, the contractor, Consolidated Diesel Inc. agreed to pay $50 thousand in back wages for 'alleged' pay discrimination against African-American managers at its manufacturing facility. OFCCP alleged that since at least 2013, Consolidated Diesel paid 11 African-American managers less than white managers in similar roles.

Fifty thousand dollars for eleven employees over a six year period is not a lot of money. That amount works out to an average of $63 per month. Consolidated Diesel did not admit liability however agreed to pay it to resolve OFCCP's alleged discrimination findings. Consolidated Diesel also agreed to take steps to ensure that its pay practices meet the legal requirements.

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