Obama Directs DOL to Require Contractors to Submit Compensation Data Annually to OFCCP
On April 8, 2014, President Obama issued a memorandum directing the Secretary of Labor to publish a rule that would require federal contractors and subcontractors to submit summary compensation data of their employees, including by race and gender, to the Department of Labor.
The memorandum is based on the notion that while working women have made significant progress since the Equal Pay Act of 1963 was established, they still earn 77 cents for every dollar that a man earns. The pay gap is even more significant for African-American women and Latinas. President Obama emphasized that while current laws mandate that contractors not discriminate based on pay, it is difficult to enforce the laws because of a lack of reliable employee compensation data by race and gender.
The Notice of Proposed Rulemaking (NPRM) on the Compensation Data Collection is scheduled to be published in August 2014.
Impact on federal contractors
Once the details of the regulations are published, the impact will be more evident in how the OFCCP will use a compensation data collection tool to collect and analyze employee compensation data obtained from contractors. In the meantime, contractors should continue to annually review their compensation practices as required by current OFCCP regulations and investigate any potential problem areas that may exist in the data due to pay disparities.