LivaNova USA and OFCCP Reach Conciliation Agreement

The OFCCP and LivaNova USA have reached a conciliation agreement regarding alleged violations that L...



Posted by Nick Setser on November 16 2022

The OFCCP and LivaNova USA have reached a conciliation agreement regarding alleged violations that LivaNova failed to comply with EO 11246. The OFCCP conducted an analysis on LivaNova’s 2018 Affirmative Action Plan for its Arvada, CO establishment and found potential compensation disparities between Males and Females in EEO Categories 1.1 (Executives) and 3 (Technicians). Although LivaNova denied these allegations, the Company agreed to an interesting, forward-looking resolution with OFCCP to resolve the compliance review.

Details of the Agreement:

LivaNova agreed to conduct 4 reviews as part of the settlement: a self-analysis of pay disparities, a review of compensation policies and procedures, compensation training for managers, and a review of pay transparency practices. Interestingly, the conciliation agreement does not include a back pay remedy for the time period under review, which is typically a remedy sought by OFCCP in all discrimination settlements. Instead, under the terms of the agreement, LivaNova will conduct a new pay equity analysis of employee compensation using a January 1, 2023, snapshot date. As part of the agreement, the Company agreed to allocate $50,000 towards making pay adjustments going forward if any unexplained pay disparities were found as a result of this new analysis. This self-analysis is to review both base pay as well as non-base compensation, and will also review starting salary, promotions, and job assignment decisions. The review will also include a review of compensation practices & establish monitoring procedures, and managers / compensation decision-makers will undergo training regarding best practices in compensation. Lastly, LivaNova agreed to review its Arvada, CO location to confirm that pay transparency posters are displayed.

Analysis:

The OFCCP’s review of LivaNova’s compensation data is emblematic of the agency’s current emphasis on compensation practices and disparities. OFFCP Director Yang has stated on several occasions that compensation is a primary focus of the agency, and this agreement should be a reminder to all contractors and sub-contractors to ensure that their pay and pay practices are compliant. This settlement is unique for OFCCP because the agreement does not include any specific back pay award for the period under review. Instead, the focus of the agreement is on conducting a new analysis of more current employee compensation data. Other contractors in long-running compliance reviews with OFCCP should consider this approach when negotiating any resolution with OFCCP.

The settlement is also a good reminder that conducting a yearly review of compensation systems is a requirement for all compliant affirmative action programs, and guidelines regarding what is required of that review can be found here. The best way to ensure that there is overall compensation equity at your organization is typically to conduct a proactive pay equity study, which should be handled by a compensation expert and conducted under privilege when possible. Equitable compensation is a focus for not only regulatory agencies, but also for employees everywhere, and organizations should seek to be proactive in examining their compensation systems to ensure they are utilizing best practices.

Nick Setser
Nick Setser, M.A., Industrial & Organizational Psychology, is a Compensation Services Consultant at Berkshire Associates Inc. Nick regularly advises clients on compensation best practices, offering practical guidance on how to navigate OFCCP risk, market analysis, and pay equity.

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