Black, White and employees with Two or More racial backgrounds were paid less than similarly situated Asian employees

HM Health Solutions (HMHS)), a wholly-owned subsidiary of Highmark Health, and provider of IT support to health plan providers, has agreed to pay $410,000 in back pay and interest to resolve allegations of compensation discrimination found during a routine compliance evaluation. OFCCP alleged that the company discriminated against 67 Black, White and employees with Two or More racial backgrounds in by paying them less than similarly situated Asian employees in associate consultant and consultant roles.

Specifically, the OFCCP claimed that there were “…statistically significant disparities in pay disfavoring White, Black, and Two or More Race employees in the Associate Consultant and Consultant positions”, and that ”…a review of the compensation practices covering those in the Associate Consultant and Consultant positions revealed that HMHS paid 51 White employees, 12 Black employees, and 4 Two or More Race employees less than 43 similarly situated Asian employees.”

The conciliation agreement between the OFCCP and HMHS also provides that the contractor is to conduct a regression analysis of compensation using a methodology described in an attachment to the Conciliation Agreement]”, as well as make annual pay adjustments using an adjustment process also described in the attachment. Unfortunately, this attachment is fully redacted, so the rest of the contractor community is unable to benefit from the OFCCP’s instructions.

Press release

OutSolve’s Take

This agreement is interesting on a number of levels. First, it involves an allegation of compensation discrimination. Second, it pits Asian employees against employees who are White, Black, and “Two or More Races”. In other words, “non-Asians”. Third, there is no indication of what pattern or practice of behavior led to the alleged compensation discrimination.

HMHS’s “compensation practices” are not described by the OFCCP. What the agency apparently means by this is simply differences in pay. No “practice” is identified, no allegation that non-Asians with equal experience or education were hired to the job at lower rates of pay than Asians, no claim that non-Asians with similar performance didn’t receive similar increases in pay as Asians, or any other practice that might have led to pay differences among the different groups.

This agreement illustrates the value of doing proactive pay equity analyses to reduce risks and costs, and more importantly, to ensure that organizations compensate people equitably for similar work. Organizations who would like additional information on OutSolve’s Pay Equity Analysis, or other compliance services, reach out to us at info@outsolve.com or by calling 888-414-2410.