Welch Consulting’s labor economists have extensive experience helping firms understand and effectively respond to investigations conducted by the federal government (e.g., OFCCP audits, EEOC audits) and state agencies (e.g., California’s Department of Fair Employment and Housing – DFEH).

Practical Solutions Developed by Expert Economists

These agencies’ investigations use models that may not accurately reflect a firm’s employment practices.  We excel at isolating and understanding the sources of the agency’s findings, and at explaining to the agency the appropriate way to study the firm’s decisions.  As a leading statistical and economic consulting firm, Welch Consulting specializes in capturing firm-specific data and introducing new explanatory measures that address initial statistical discrepancies.  We have the necessary experience to advise clients of potential pitfalls if a proactive adverse impact analysis reveals areas of concern.

OFCCP Audits

The OFCCP audits more than 3,000 government contractor establishments every year.  What differentiates the OFCCP from other agencies is that OFCCP audits take place even if there are no employee complaints regarding the contractor’s employment practices.  We have worked on hundreds of OFCCP audits across every major industry and in each of the OFCCP’s six regional offices.  We understand how the OFCCP analyzes the contractor’s data to identify “indicators” during pay equity analyses and reviews of employment selections (e.g., hiring, promotions, terminations). 

OFCCP Audits: Representative Engagements

The Assignment

Welch Consulting was retained by a nationally-recognized research laboratory to assist in an OFCCP audit of a compensation structure in which initial analysis showed unexplained differences in pay among men and women and white and minority employees.

Our Findings

Our economists studied the company’s pay practices and discovered that the OFCCP’s pay discrepancies were caused by their omission of relevant work skills and experience, such as differences in time-since-degree and degree discipline across race groups. The client provided educational background data that our experts organized and incorporated into the statistical models. The audit closed shortly after the company explained our findings to the OFCCP.

The Assignment

A government contractor in the oil and gas industry engaged our experts to proactively study their compensation and employment selections data prior to submitting their AAP to the OFCCP.

Our Findings

Our economists helped the contractor improve the collection and organization of their employment data and assisted in the design of Pay Analysis Groups (PAGs) to be submitted with their AAP. The resulting statistical analyses are a better reflection of the contractor’s decision process and incorporate the business-related factors the contractor considers when making compensation and employment selection (e.g., hiring) decisions. Following the initial analyses, Welch experts have advised this company on an annual basis prior to potential auditing activity by OFCCP (thus also avoiding potential conflicts including workplace discrimination lawsuits in the future.)

EEOC Investigations

We have assisted with the response to numerous EEOC investigations, ranging from identifying the compensation of similarly situated employees for a charge of pay discrimination by a single party, to responsibility for data production and analysis as testifying experts in cases with claims of systemic discrimination. In our experience, early expert involvement leads to a thorough analysis and understanding of the data that facilitates the rebuttal of the EEOC’s claims and can provide the foundation for a successful settlement.

Examples of our involvement in EEOC investigations regarding systemic claims include:

  • Race-based claims in hiring
  • Age-based claims in terminations
  • Gender-based claims in pay and promotion

EEOC Investigations: Representative Engagements

The Assignment

Welch Consulting was retained to assist in defending an EEOC action claiming the analysis of an opposing statistical expert provided evidence of discriminatory hiring by our client.

Our Findings

As a premier statistical consulting firm, Welch Consulting constructed a complete and reliable statistical model in rebuttal to EEOC’s expert, resulting in his ultimate exclusion from the matter.  In turn, Welch’s client received a favorable judgment and was awarded fee reimbursement against the EEOC.

The Assignment

A national grocery store chain was investigated by the EEOC, who alleged similarly situated men and women were not paid equally, to the disadvantage of women.

Our Findings

When the skill and responsibility levels within the organization were more finely recognized, we showed that the pay men and women received did not differ within similarly-situated men and women within the job category. Following our demonstration, this aspect of EEOC’s investigation did not proceed.

The Assignment

A Colorado retail chain store was investigated following allegations that suburb outlets were hiring minority applicants at a lower rate than white applicants.

Our Findings

The EEOC based its measure of the relevant minority representation on the Denver standard metropolitan statistical area (SMSA), which had a higher percentage of minority applicants than any outlying suburb.  We demonstrated that actual applicants to suburban stores were a lower percentage minority than the Denver SMSA, and that outreach efforts to boost minority applications were in place. The EEOC ultimately accepted this finding.

California’s DFEH (Department of Fair Employment and Housing) Investigations

At the State level, California actively investigates complaints that individuals have been treated unfairly in employment actions such as hiring, promotion, termination, and pay, including potential violations of the California Equal Pay Act.  When the Department chooses, it can bring actions against employers that can require a statistical analysis in response. It’s important to note that employers can anticipate the results of these investigations and take steps to mitigate outcomes by obtaining a pay equity audit or employment practice audit.

DFEH Investigations: Representative Engagements

The Assignment

Welch Consulting was retained by a national retailer with California establishments to assist in responding to a DFEH investigation alleging race discrimination in hiring.

Our Findings

Our economists studied the relevant labor market for each establishment under investigation and documented large race differences in the pool of job candidates for pairs of stores relatively close to each other. This finding supported the need to study the hiring practices of each store separately.

Further Insights

Welch Consulting can help federal contractors navigate the complexity of an OFCCP audit. We are experienced with each step of the process. We can help with any of the following:

  • Identify relevant data
  • Perform statistical consultancy services
  • Supplement the data and refine the analysis
  • Prepare data for production
  • Generate tables and reports of results
  • Respond to questions from the OFCCP
  • Verify the OFCCP’s calculations
  • Directly discuss the statistical results with the OFCCP

The OFCCP’s methodology is undergoing constant changes: Directive 2018-05 is the most recent in a series of major overhauls to OFCCP compensation guidance over the past decade. More changes are expected in 2020, including potential changes to the OFCCP’s use of statistical evidence.  Our experts are actively engaged in ensuring that the OFCCP follows sound statistical and transparency protocols.