OFCCP has changed its approach to compensation discrimination

On August 24, 2018, the Office of Federal Contract Compliance Programs (OFCCP) changed its approach to investigating compensation discrimination. The OFCCP issued Directive 2018-05 entitled “Analysis of Contractor Compensation Practices During a Compliance Evaluation.” This new directive rescinds Directive 2013-03 entitled “Procedures for Reviewing Contractor Compensation Systems and Practices.” The 2013 document is more commonly referred to as Directive 307.

Here’s an excerpt from Directive 2018-05 that explains the purpose of the new directive (emphasis added):

DIR 2013-03 was issued, in combination with other OFCCP guidance and training, to provide clarity to contractors and improve equal employment protection for workers.

Upon further review of Directive 307, and because OFCCP now receives individual-level compensation data as part of the scheduling letter submission, OFCCP has decided to update the guidance set out in Directive 307. OFCCP is concerned that contractors lack the clear guidance Directive 307 intended to give. OFCCP believes that fulsome guidance will further support contractors’ ability to conduct meaningful self-audits so that they can proactively identify and address issues with their compensation practices.

Pay discrimination by federal contractors is unlawful, and its elimination is a key enforcement priority for the agency. OFCCP, however, can only audit a small proportion of all contractor establishments per year. Therefore, facilitating proactive compliance is an important component in achieving this objective. This new directive will support the agency’s efforts to eliminate pay discrimination through both enforcement and compliance.

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© 2018