ESRI Entered into an Early Resolution Agreement with OFCCP to Resolve Pay Discrimination Allegations

ESRI will pay $2.3 million to 176 female workers paid less than male counterparts

Environmental Systems Research Institute (Esri), located in Redlands, CA, has entered into a five-year early resolution conciliation agreement with the Office of Federal Contracts Compliance Programs (OFCCP) to resolve allegations of pay discrimination against female workers.

During a compliance review, OFCCP found pay disparity among 143 female software development engineers and 33 female quality assurance engineers at Esri’s headquarters. OFCCP’s analyses revealed statistically significant lower pay rates and alleged that the company paid the 176 female employees less than their male counterparts in 2017.

To resolve the allegations Esri has agreed to pay $2.3 million in back wages and interest to the affected females. In addition, the company will review and revise its overall compensation programs, provided training to its managers, and conduct annual compensation analyses. Esri and OFCCP stipulate to use the ‘statistical model’ outlined in the agreement (redacted) to evaluate whether Esri’s compensation practices show statistically significant indicators of potential discrimination based on gender for the two positions identified.

Esri also committed to submit to OFCCP a progress report for each of the five years of the agreement through 2026.

Press release

OutSolve’s Take

We continue to stress the importance of conducting annual pay equity analyses and responding to pay inequities, especially now that it is an annual requirement as part of the AAP certification for federal contractors.  OFCCP’s recently Revised Directive on compensation analysis emphasized how contractors will be evaluated, provided further details on their compensation analysis obligations and clarifies OFCCP’s authority to request and review support documentation (See OutSolve’s Blog on OFCCP’s Directive on Advancing Pay Equity Through Compensation Analysis). Contractors must document their pay equity review analyses, type of statistical tests used, and results annually.

OutSolve is prepared to assist contractors in meeting these new requirements. We can provide our clients with annual reporting tailored to the statistical analysis of pay equity along with providing key visibility to pay gaps within the organization.  For further information about the new Directive, please contact info@outsolve.com or by calling 888-414-2410.