by Kurt Ronn

Times are tough in the U.S. economy. Imagine presenting a budget to the chief financial officer that significantly increases your annual budget and adds 1,000 new employees to your payroll. You need to present a very strong increase in revenue and a bold return on investment to justify a budget increase and new head count—even in the government.

Secretary of Labor Hilda L. Solis submitted her 2010 budget on May 7 and broke new ground when intro¬ducing the budget over a webcast. This could be a sign of a new level of transparency.

Regardless of the method of transmission, the Solis budget provides a clear window into the intentions of the U.S. Department of Labor (DOL). Secretary Solis requested approximately 1,000 new government employees to address the current talent shortage within DOL. The significant increase in staff spreads across the Office of Federal Contract Compliance Programs (OFCCP), Occupational Safety and Health Administration (OSHA), Office of Disability Employment Policy (ODEP), and the DOL’s Wage and Hour Division (WHD).

Secretary Solis indicated that 670 of the new hires would focus on frontline enforcement of the new regu¬lations. One day after Secretary Solis released the DOL budget, the Equal Employment Opportunity Commission (EEOC) released its budget, which called for 224 additional staffers. The EEOC measure repre¬sents a 10 percent increase in staff. Considering the budget focus on adding staff, it is clear that the government is planning to process considerably more cases and complaints in 2010 than in prior years. The additional employees should improve response time, help reduce some of current backlog, and allow them to focus on enforcing the ADA Amendments Act and Lilly Ledbetter Fair Pay Act and build on the successful systemic approach to enforcement.

Federal contractors should take special note of the 213 additional employees requested for OFCCP. This represents a 36 percent increase in its current staff. Secretary Solis wants to continue to improve how OFCCP processes and investigates audits related to compensation. The budget also enables OFCCP to bring in external experts to substantiate claims and improve investigations and the analysis of compensa¬tion for federal contractors. Better cases yield bigger dollars.

Two million dollars earmarked for the new active case management system will help implement what OFCCP Director of the Division of Statistics & Technology Javaid Kaiser, Ph.D., talked about at the Industry Liaison Group (ILG) National Conference in Anaheim, California, last year. During that confer¬ence, Kaiser discussed how automating and stream¬lining the process would enable OFCCP to process audits more efficiently and identify when audits have fallen through the cracks. The new system will improve consistency across the regions by imple¬menting a rules-based system that will help a compli¬ance officer determine if the cases move forward or release. Enforcement officers will be able to spend more time pursuing “quality” cases and have addi¬tional visibility across the enterprise.

OFCCP is not the only agency that is seeing signifi¬cant increases. WHD will get an increase of 288 addi¬tional staff, with 200 dedicated to frontline enforce¬ment. This will bring the agency’s staff numbers to pre-2001 levels. Note: WHD will receive an additional 116 staff from the American Recovery and Reinvestment Act of 2009 (Recovery Act).

The Recovery Act will result in a 31 percent increase in overall staff in 2010. This increase will help address some inefficiency in the current investigation process and allow WHD to step up enforcement where employers are not following FLSA and FMLA requirements, with a special emphasis on agricultural workers, young workers, and workers with disabilities.

Secretary Solis has requested that ODEP increase its staff by 19.5 percent and receive an additional $10 million in budget to address the growing needs of the disabled. The increased staff will enhance ODEP’s ability to work with DOL’s One-Stop offices, and directly with employers and unions to improve the employment process for individuals with disabilities.

With some agencies increasing their staff by as much as 36 percent to handle the increased workload, it should serve as a warning to all employers to review current employment practices and be prepared for an OFCCP audit or EEOC charge focused on compensa¬tion or disability.

To compound this issue, Congress could create the perfect storm for EEOC by passing the Paycheck Fairness Act, which provides for punitive damages left out of the Lilly Ledbetter Act. If the Paycheck Fairness Act is passed, EEOC’s increased staff would be poised to respond to new charges and prosecute organizations. The Paycheck Fairness Act may also make it possible for employees who receive back pay from an OFCCP audit to file a complaint with EEOC requesting punitive damages for pay discrimination that organization has already admitted. 

Balance the Budget

Employers need to fill in the blank column not shown in the budget request: Revenue. The bottom line of the new budget needs to balance. To make the budget work, Secretary Solis must present a compelling return on investment. The DOL actions are in the best interest of American workers, but employers need to realize that the budget shows employers where they need to spend their time; increased fines and settlements due to poor employment practices are the last thing a business needs in this economy.

More people, better tools, streamlined processes, and better focus should yield a greater return on the government’s dollars. Business, and particularly federal contractors, needs to be proactive, especially in the areas of compensation analysis, recordkeeping, and process execution. Although most cases are likely to be settled around failure-to-hire, the strong enforce¬ment trend and the big dollars are headed toward fair pay and compensation.

In the past, outdated tools and too few hands on deck hindered the government’s ability to prosecute cases. However, the new budgets clearly demonstrate that the government is continuing to head in the direction of systemic discrimination and will have the ability to pursue actions that are more case-worthy.

This comes at a time when the tables are turned on businesses. Poor economic conditions have resulted in reductions in force, smaller compliance budgets, and less overall resources. The government is likely to be better funded, have better tools, and be one of the few entities actually hiring and creating new jobs. Businesses need to be prepared to do more with less while the government is planning to do more with more. 

View original publication in the Affirmative Action Solutions Newsletter - The Need to Know section