OFCCP has released a detailed new directive that outlines their methods for calculating back pay for victims of employment discrimination.  Back pay is central to the make whole relief that OFCCP seeks in these situations.  In fact, the directive states, “back pay is generally sought as a remedy in all cases, both individual and class, where employment discrimination results in a loss of compensation for victims of discrimination.”  Directive #310 was made effective and released on July 17.

The methods for calculating pay differs depending on whether it is a case of individual or class discrimination:

Formula Relief

  • Used when there is a large number of affected individuals, when the individual relief method is impractical or when the number of class members exceeds the number of employment opportunities available
  • Classes will include individuals who meet the case-specific criteria of potential victims, “without requiring evidence they were specifically discriminated against.” [emphasis added]
  • Financial remedies are shared among class members

Individual Relief

  • Used when there is a single or small group (less than 5) of victims of discrimination and when the economic losses for the individual can be traced to supporting documentation.
  • Economic losses are determined by the nature of the discrimination minus any mitigating factors
  • Similarly situated employees who did not face discrimination can be used as comparators for what the affected individual may have earned

In either kind of relief, back pay “generally can be obtained for a period up to two (2) years prior to the date of the scheduling letter” and “from the date of violation forward until the discriminatory action(s) are stopped.”  OFCCP’s comprehensive view of where wages can be lost includes:  compensation or salary, overtime, premium pay and shift differentials, incentive pay, raises, bonuses, lost sales commissions, cost-of-living increases, tips, medical and life insurance, fringe benefits, and pensions, stock awards and options.  Back pay remedies are also subject to interest which will be compounded quarterly.

In addition to outlining when each method of calculation should be used, the directive also explains the processes by which the back pay is calculated and potentially mitigated by intervening circumstances.  It may be viewed in its entirety here.