OFCCP Issues Proposal to Implement New Contractor Compensation Reporting Requirement

On April 8, 2014, President Obama issued a Presidential Memorandum  – Advancing Pay Equality Through Compensation Data Collection – directing the Department of Labor to issue regulations within 120 days that will require federal contractors and subcontractors to submit to the DOL summary data on the compensation paid their employees, including data by sex and race.  The DOL, through the Office of Federal Contract Compliance Programs (OFCCP), will officially publish a proposed rule implementing this directive on August 8, 2014.

The OFCCP’s proposed rule avoids setting forth many specific requirements.  Among the few specific requirements contained in the proposal are thresholds for submission of the data. The proposed rule requires employers to submit compensation data to OFCCP if they have 100 or more employees and a federal contract or subcontract of $50,000 or more (plus certain financial institutions). 

The preamble to the proposed rule contains additional proposals that provide some indication of what OFCCP is contemplating for its final rule. Major proposals in the preamble include: 

  • Collection of one calendar-year’s worth of W-2 data, by EEO-1 category, along with other data such as hours worked;
  • January – March filing window;
  • Requiring submission of compensation data by both employers who file EEO-1s and employers who file the Department of Education’s Integrated Postsecondary Education Data System (IPEDS) report;
  • Establishing aggregate industry compensation standards, and selecting contractors for evaluation based on deviation from these standards; and
  • Sharing aggregate compensation data with the public, on an annual basis. 

The notice-and-comment period will be vital to determining the shape of the final rule. During this period, OFCCP will be taking comments from the regulated community into account as it writes the final rule. Comments from the federal contracting community regarding what will and will not work will be crucial. To that end, Littler’s OFCCP Practice Group, in conjunction with our Workplace Policy Institute®, will be gathering comments from federal contractors during the comment period, which ends on November 6, 2014. 

Littler will follow up this alert with a more detailed ASAP article regarding OFCCP’s proposed rule.

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.