Organizations doing business with the federal government may be subject to affirmative action requirements, overseen by the Office of Federal Contract Compliance Programs (OFCCP). In an effort to provide more transparency and efficiency in its compliance evaluations, the OFCCP recently issued a new directive providing information on how it will analyze contractor compensation. Under Executive Order 11246, covered contractors and subcontractors are required to periodically self-audit their compensation practices to identify and eliminate pay disparities based upon race/national origin and gender. If selected for a compliance evaluation by the OFCCP, contractors must provide compensation information to the government. Under the current scheduling letter modified under the Obama administration, contractors must provide, as part of their initial submission to OFCCP, individual compensation information for all employees in the affirmative action plan that is under review by the OFCCP. OFCCP’s new directive aims to:
- Provide more transparency in how OFCCP will evaluate compensation evaluations.
- Provide information so contractors can conduct self-audits and proactively address compensation issues that may exist.
- Improve the consistency and efficiency of OFCCP’s compensation analyses during compliance evaluations.