OFCCP Seeks Comments on Proposed Compensation Data Collection Tool

The Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has issued an advance notice of proposed rulemaking (ANPRM) (pdf) to solicit public input on the agency’s development and implementation of a new compensation data collection tool. According to the agency’s summary of this ANPRM, to be published in the August 10, 2011 edition of the Federal Register, “[p]ossible uses for the collected data include generating insight into potential problems of compensation discrimination at the establishment level that warrant further review or evaluation by OFCCP or contractor self-audit.” The agency further states that the data provided could be used “to conduct analyses at the establishment level, as well as to identify and analyze industry trends, Federal contractors’ compensation practices and potential equal employment-related issues.” The agency claims that the tool would likely be used “primarily as a screening tool” that would enable the agency to “effectively and efficiently identify supply and service contractors whose compensation data indicates that further investigation is necessary” as well as be used to “identify contractors for compensation focused reviews as well as full compliance reviews.”

In December 2010, the OFCCP proposed to rescind two compensation guidance documents: Interpreting Nondiscrimination Requirements of Executive Order 11246 with respect to Systemic Compensation Discrimination (Standards) (pdf) and the Voluntary Guidelines for Self-Evaluation of Compensation Practices for Compliance with Executive Order 11246 with respect to Systemic Compensation Discrimination (Voluntary Guidelines) (pdf), a move that may give the agency more leeway in finding federal contractors and subcontractors liable for pay disparities. A new means of collecting compensation data can be seen as the next step in this process. To this end, the OFCCP seeks comment “on issues relating to the scope, content and format” of a new compensation data collection tool, in addition to “suggestions for ensuring that the tool will be an effective and efficient means of identifying contractors for review.” Specifically, the ANPRM sets forth 15 detailed questions for public comment. Such questions include the following:

  • What data or information should be collected in order for the OFCCP to assess whether further investigation into the contractor’s compensation decisions and policies is necessary?
  • What groupings (for example, EEO-1 job categories, job titles, AAP job groups) should be used in answering the previous question?
  • What elements of compensation should be collected?
  • Is there a set of questions that would capture information that would be helpful in understanding a contractor’s compensation system, such as policies relating to promotion decisions, bonuses, shift pay, setting of initial pay, etc.?
  • What type of compensation trend analyses would be appropriate to conduct on an industry-wide basis?
  • What specific categories of data would be most useful for identifying contractors in specific industries for industry focused compensation reviews?
  • What specific categories of data would be most useful for conducting compensation analyses across a contractor’s various establishments?
  • What are the benefits and drawbacks of collecting contractor’s compensation data on a nationwide basis rather than, or in addition to, an individual establishment basis?
  • What were the strengths and weaknesses of the compensation section of the 2000 Equal Opportunity (EO) Survey?
  • The OFCCP is considering requiring businesses that are bidding on future federal contracts to submit compensation data as part of the Request for Proposal process. In such a case, the data collected may be used for trend analyses as well as targeting contractors for post-award compliance reviews. What are the benefits and drawbacks of administering the data collection tool in this manner?
  • Should the OFCCP decide to expand the scope of the compensation data collection tool beyond supply and service contractors to include construction contractors, what factors or issues particularly relevant to such contractors should OFCCP keep in mind when designing and implementing the tool?
  • How will small businesses be impacted by the requirement to provide the compensation data requested by the new data collection tool?

The OFCCP announced that it was issuing this ANPRM to solicit comments from interested parties as early as possible in the development process of this new data collection tool. The agency is especially interested in the nature of data that would be most useful for analysis, and any practical implementation issues. Comments on this proposal and/or responses to the individual questions must contain the regulatory identification number (RIN): 1250-AA03, and be received within 60 days of the ANPRM’s publication in the Federal Register. Comments may be submitted electronically through the federal eRulemaking portal, or via mail or hand delivery to: Debra A. Carr, Director, Division of Policy, Planning, and Program Development, Office of Federal Contract Compliance Programs, Room C-3325, 200 Constitution Avenue, N.W., Washington, D.C. 20210.

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Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.