Comment period for rule on federal contractor compensation data extended

November 03, 2014 - by: HR Hero 0 COMMENTS

The U.S. Department of Labor (DOL) has extended the comment period for a proposed rule that would require federal contractors and subcontractors to submit an annual equal pay report to the Office of Federal Contract Compliance Programs (OFCCP).

The 60-day extension means comments must be submitted by January 5, 2015. Interested parties can read and comment on the proposed rule, which was published in the August 8 Federal Register, by visiting www.dol.gov/ofccp/epr.html.

Under the proposed rule, the requirement to submit equal pay reports would apply to companies that (1) file EEO-1 reports, (2) have more than 100 employees, and (3) hold federal contracts, subcontracts, or purchase orders worth $50,000 or more for at least 30 days. Through the equal pay reports, the OFCCP would be able to collect summary employee pay and demographic data.

Major provisions of the proposed rule include:

  • Covered contractors and subcontractors must submit summary data on employee compensation by sex, race, ethnicity, job categories, and other relevant data points such as hours worked and the number of employees.
  • The OFCCP will compile and publish aggregate industry compensation data and standards based on the more than 100,000 reports that would be filed.
  • The OFCCP will select contractors for audit based on compensation differences outside of an “acceptable range” compared to industry standards.

Attorneys with Fortney & Scott, LLC, in Washington, D.C., have expressed concerns about the rule. One concern relates to confidentiality since the equal pay reports will reveal contractors’ compensation practices.

The attorneys also say the use of W-2 information will produce data “skewed by occasional, individual aberrations that aren’t reflective of a general compensation system.” That information will become part of the published industry standard, which will be used by employees and others to make employment decisions and create an incentive for contractors to meet the standard.

The attorneys are also concerned about the creation of a targeted selection process to replace the OFCCP’s current random audit selection process.

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