by David S. Fortney and Judith E. Kramer
Effective February 28, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) is changing its approach to compliance audits and enforcement proceedings related to how contractors pay their workers. The changes effectively open nearly every federal contractor’s actions, policies, and practices on compensation to scrutiny, review, and possible challenge.
On February 28, the OFCCP will formally rescind the “Voluntary Guidelines” and “Compensation Standards” issued in 2006. The agency has claimed those documents improperly limit its ability to conduct full investigations of compensation matters.
The OFCCP’s new guidance specifies the procedures investigators will follow to review federal contractors’ systems and practices on compensation. Under the new guidance, federal contractors can expect a more intensive review relating to compensation during OFCCP audits beginning on or after February 28.
Federal contractors should take steps immediately to ensure they understand the changes and their impact.