Hunton Employment & Labor Perspectives

In response to a presidential memorandum directing the Department of Labor (“DOL”) to collect summary compensation data from federal contractors and subcontractors to combat pay discrimination, the DOL’s Office of Federal Contract Compliance Programs (“OFCCP”) recently proposed a rule calling on certain federal contractors to submit reports on employee compensation.  The rule, published in the Federal Register on August 8, requires covered contractors to annually submit an “Equal Pay Report.” Covered federal contractors and subcontractors are those who:

• File EEO-1 reports;
• Have more than 100 employees; and
• Hold federal contracts or subcontracts worth $50,000 or more for at least 30 days.

Effective February 28, 2013, the Office of Federal Contract Compliance Programs (“OFCCP” or “Office”) has rescinded two guidance documents implemented during the Bush administration that outlined methods for investigating and evaluating pay discrimination claims against federal contractors and replaced them with new guidelines emphasizing a case-by-case approach that provides investigators with authority to conduct more thorough investigations and identify a broader range of compensation-related discrimination.  The first document, Interpreting Nondiscrimination Requirements of Executive Order 11246 With Respect to Systemic Compensation Discrimination (“Compensation Standards”), set forth the procedures OFCCP followed when issuing a notice of violation for pay discrimination; and the second document, Voluntary Guidelines for Self-Evaluation of Compensation Practices for Compliance with Nondiscrimination Requirements of Executive Order 11246 (“Voluntary Guidelines”), contained directions that federal contractors themselves could follow to preemptively show compliance with their obligation to evaluate their internal pay practices for fairness.