In a new release dated February 26, 2013, the Office of Federal Contract Compliance Programs (OFCCP) announced the issuance of Directive 307, which takes effect on February 28, 2013. This Directive rescinds two enforcement guidelines published in 2006, commonly referred to as the “Compensation Standards” and “Voluntary Guidelines” and includes new guidance for OFCCP Compliance Officers and federal contractors. The news release can be found at: http://www.dol.gov/opa/media/press/ofccp/OFCCP20130305.htm.
The OFCCP states that they will no longer be constrained to using the same “cookie-cutter approaches” to analyze compensation, which only allowed looking for a single type of pay discrimination. The OFCCP states that Directive 307 will allow a more case-by-case approach to determine whether they feel that pay discrimination has occurred and more fully enforce Title VII of the Civil Rights Act of 1964. The OFCCP has created a page on its website that includes links to several sources of information including the Notice of Rescission, the Directive, a Fact Sheet, Frequently Asked Questions (FAQs), along with the Press Release at: http://www.dol.gov/ofccp/regs/compliance/CompGuidance/. The website indicates that there will be a Compliance Assistance webinar and PowerPoint presentation regarding the new Directive.
The FAQs indicate that a variety of tools will be used by the OFCCP and that there is no single tool that must be used in every case. The OFCCP acknowledges that as of now there is no change in the Compliance Review Scheduling Letter Item 11 that requests compensation data for desk audit by salary range, rate, grade, or level. The OFCCP Directive and FAQs confirm the current trend in Compliance Reviews to seek employee level data. It appears that the OFCCP will continue to analyze compensation data submitted for desk audit by AAP Job Groups and possibly larger groups, despite the lack of job group in Item 11 of the Scheduling Letter. The Directive states that “If a contractor submits summary compensation data based on job groups, titles in those job groups should be consistent with the groupings in the Affirmative Action Plan (AAP). Summary compensation data submitted in a format other than by AAP Job Group, or the contractor’s existing pay grade level or band system, generally is not acceptable for analysis.” We believe that the submission of summarized data by level will continue to meet resistance from OFCCP Compliance Officers.
The Directive states that “The investigation procedures established in this Directive apply to all OFCCP reviews scheduled on or after February 28, 2013, and they apply to open reviews to the extent they do not conflict with OFCCP guidance or procedures existing prior to the effective date. Regardless, the 2006 Compensation Standards and Voluntary Guidelines govern determinations regarding the issuance of an NOV for systemic compensation discrimination in any OFCCP review scheduled, opened or otherwise pending on the effective date of this Directive.”
We believe that the publication of the new compensation directive signals a renewed interest by the OFCCP in analyzing contractor’s compensation data and practices. It is now more important than ever to prepare AAPs as soon as possible following the beginning of the AAP year and examine all indicators of compensation disparities among employees of different gender, race, or national origin. It is essential to identify the legitimate business reasons for any differences that exist.
Please contact us by calling (732) 446-2529 or sending us an e-mail at email@example.com if you are interested in discussing Directive 307.