Federal Contractors Must Disclose Annual Compensation Data

Federal Contractors Must Disclose Annual Compensation Data

Fake Dictionary, definition of the word compensation.

Federal Contractors Must Disclose Annual Compensation Data

The U.S. Department of Labor Office of Federal Contract Compliance Programs (OFCCP) announced on August 6, 2014 another obligation for federal contractors and subcontractors. The obligation requires federal contractors and subcontractors to now annually report summary workforce compensation data. It would be called an “Equal Pay Report” and would help OFCCP direct its enforcement resources toward contractors and subcontractors whose report would indicate potential discriminatory pay practices.

Covered federal contractors would submit this data as a supplement to the existing annual EEO-1 Report. The new report would require many more columns of additional information about pay. OFCCP also intends to publish this data from reports filed. OFCCP will then select contractors for a compliance review audit based on their report deemed outside of the “acceptable industry range”. No individual data would be reported, however a pay rate could be determined if a single employee occupied a particular race or gender category within an EEO-1 occupation category.

Employers would need to report the exact and total amount of employees by EEO-1 occupation categor by race and gender, as well as all the hours worked and aggregate compensation for all employees in each occupation category by race and gender.

This new rule/obligation would eliminate OFCCP’s need to neutrally select contractors for an enforcement audit. The new rule will be open for public comment until the 6th of November and is expected to be finalized in 2015.

This proposed compensation rule is yet another during a year of activism in which federal contractors have been made to deal with a deadlocked Congress that has been unable to carry out the Obama administration’s legislative agenda. OFCCP has been called on by the President to enact through federal contractors his equal pay initiative that has gained no traction in Congress.