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New OFCCP Leadership Committed to Pay Discrimination Enforcement

Insight & Impact - Labor & Employment Newsletter

ISSUE:

Federal contractors should brush off the sands to summer and ensure they are current on OFCCP's current approach to pay discrimination. If your company is a federal contractor, keep reading to ensure you are up to date.

There is a new Acting Director of OFCCP. Former Director Ondray Harris resigned and Craig Leen became the Acting Director of OFCCP at the end of July. Leen has focused on transparency as one of his goals.


Read more Insight & Impact from September 2018:


As part of that initiative and in response to criticism concerning OFCCP's approach to compensation discrimination, on August 24, 2018, OFCCP issued a new directive on how it will analyze contractor's compensation. It is DIR 2018–05 Analysis of Contractor Compensation Practices During a Compliance Evaluation. DIR 2018-05 provides guidance to contractors on how they should proactively analyze their pay, broadly outlines OFCCP's approach for analyzing pay, and states that elimination of pay discrimination is a key enforcement priority. The guidance applies to OFCCP reviews scheduled on or after August 24, 2018, and to open reviews to the extent it does not conflict with OFCCP guidance or procedures existing prior to August 24, 2018.

IMPACT:

Given OFCCP's continuing focus on pay equity, federal contractors should statistically analyze their compensation from a discrimination perspective. Specifically, they should closely review DIR 2018-05 and formulate how they would explain their pay to OFCCP. Such analysis should be done in consultation with legal counsel to shield the analysis from disclosure to OFCCP and plaintiffs in discovery. Current regulations already require federal contractors to annually prepare compensation analyses focusing on equity and discrimination issues. Of course, the pressure from executive leadership, Boards of Directors, and activist shareholders on pay equity is another reason why companies should prepare privileged compensation analyses.

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