OFCCP Publishes Guidance on Calculating Back Pay

By | July 17, 2013

On July 17, 2013, the Office of Federal Contract Compliance Programs (OFCCP) issued Directive 310, which took effect immediately.  The directive provides guidance on the calculation of back pay for victims of employment discrimination.  The OFCCP presents two methods for doing so, the formula relief model and the individual relief model.

Directive 310 can be found on the OFCCP’s website at: http://www.dol.gov/ofccp/regs/compliance/directives/dir310.htm. The OFCCP uses back pay as a part of “make whole relief”, which can also include other monetary and non-monetary components.

Directive 310 indicates when it is appropriate to use the formula relief model and when it is appropriate to use individual relief model for calculating back pay, and describes the elements that should be considered in determining which model to use. It also identifies basic principles that should apply to back pay calculations, including addressing mitigation when raised as a defense by the contractor.

The Directive indicates that the formula relief model is used as a way to approximate back pay for a class when it is unrealistic to calculate individual losses accurately.  The Directive states that formula relief is the method used in systemic discrimination cases for calculating a total amount of the back pay for an affected class of discrimination victims. The back pay award is then divided (pro rata or otherwise) among all the members of the class.

The Directive indicates that the individual relief model is used when there is either a single victim or a small group where individual losses can be calculated.  For a contractor to use mitigation as a defense for this model they may claim the victim(s) did not use reasonable diligence in looking for alternative employment. Evidence is collected such as copies of job applications, rejection letters from potential employers, and interviews with the victim(s) to prove or disprove the claim.

The OFCCP has published a Frequently Asked Questions page for the directive, which can be found at: http://www.dol.gov/ofccp/regs/compliance/faqs/dir310faqs.htm.

Please contact us by calling (732) 446-2529 or sending us an e-mail at glennbarlett@gbcs.net if you are interested in discussing Directive 310.