After a relatively quiet 2012, the Office of Federal Contract Compliance Programs (OFCCP) hit the ground running in 2013. In a second major announcement this year, OFCCP issued new investigation standards and procedures on February 28 as well as a new policy directive for reviewing the compensation systems and practices of federal contractors and subcontractors.
Directive 307 provides for broad investigation of “any observed difference in compensation” and allows OFCCP compliance officers to utilize a wide range of statistical and non-statistical analytical tools in investigating and remedying compensation discrimination. The Directive, entitled Procedures for Reviewing Contractor Compensation Systems and Practices, has applied to all OFCCP compliance reviews scheduled on or after February 28, 2013.
Contractors must review and monitor their compensation systems to “determine whether there are gender-, race-, or ethnicity-based disparities.” During a compliance evaluation, OFCCP requests
compensation data and analyzes contractors’ compensation systems and practices to determine if discrimination exists and, if so, how it should be remedied. 41 C.F.R. § 60- 2.17(b)(3), (d).
Despite OFCCP public statements to the contrary, the new Directive offers little “clear guidance” at all for federal contractors in preparing affirmative action programs that will pass the scrutiny of an OFCCP compliance review. Rather, the Directive provides investigators continued broad discretion to examine a wide array of contractor practices and to make case-by-case judgments on how to proceed in any given compliance review.
The Directive states the following:
Investigation of potential compensation discrimination presents complex and nuanced issues. The choice of the best approach for a case depends upon the underlying facts, the available data, and the contractor’s compensation system and practices. As such, OFCCP takes a case-by-case approach to analyzing compensation issues.
To more fully understand how this case-by-case process might affect your workplace, review the factors listed in the full-version of this article, along with the section entitled "What Do You Do Now?" which provides tips on reacting to a compliance audit or action by the OFCCP related to your compensation system.