By Kelline R. Linton,
On August 6, 2014, the Office of Federal Contract Compliance Programs (“OFCCP”) issued a Notice of Proposed Rulemaking that would require federal contractors and subcontractors with 100 or more employees to submit an annual Equal Pay Report to the OFCCP. The OFCCP officially published the proposed rule on August 8, 2014, and all 90-day public comments are due by November 6, 2014.
This proposed rule applies to prime contractors, first-tier subcontractors, and construction subcontractors of any tier who (1) are required to file EEO-1 Reports; (2) have more than 100 employees; and (3) have a federal contract, subcontract, or purchase order amounting to $50,000 or more lasting for at least 30 days. The proposed rule would amend the current regulations by requiring these contractors to supplement their EEO-1 Report with summary information on (1) total number of workers within each EEO-1 job category by race and sex; (2) total W-2 wages for all workers in each EEO-1 job category broken down by race and sex; and (3) total hours worked for all employees in each EEO-1 category by race and sex.
The OFCCP stated the data will not result in sanctions; instead, it will use the data from the equal pay reports to prioritize contractors for compliance evaluations and audits. As such, this proposed rule could potentially eliminate the OFCCP’s current random audit selection process. However, the rule does not allow contractors an opportunity to provide the reasons for any pay disparities contained in their EEO-1 Reports, so the Department of Labor may use the data for wholesale audits of pay systems.
What should contractors do? We recommend that covered contractors consider conducting proactive equal pay analyses now to address any areas of concern before reporting the data. However, contractors should also be mindful of any potential confidentiality issues. While the OFCCP believes the Freedom of Information Act would exempt disclosure of contractor data, it is currently unclear whether this will actually protect pay data in all cases. If you have any questions on this proposed rule and the reporting implications, we are available to assist. For more information on the proposed rule, please visit: http://www.dol.gov/ofccp/EqualPay/EPR_FAQs.html.
How to submit comments on the proposed rule:
You may submit comments on the NPRM by using any of the following methods:
• Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
• Facsimile: (202) 693-1313 (for comments of six pages or less).
• Mail: Debra A. Carr, Director, Division of Policy and Program Development, Office of Federal Contract Compliance Programs, Room C-3325, 200 Constitution Avenue, N.W., Washington, D.C. 20210.
All comments must be received on or before November 6, 2014.