Office of Federal Contract Compliance Programs (OFCCP) and Compensation
OFCCP Rescinds Compensation Guidelines
On October 25, 2010, the OFCCP sent a Notice to the Office of Information and Regulatory Affairs (OIRA), a branch of the Office of Management and Budget (OMB), which would rescind its systemic compensation discrimination standards. Director Patricia Shiu had announced the plan to rescind these standards in a keynote speech at the National Industry Liaison Conference on August 4, 2010. The agency has already informally stopped following the standards that were used, even though a formal withdrawal is not yet official.
After the OFCCP sent the Notice to the OMB, the next step will be that the OIRA has to review the drafts of final and proposed agency regulatory actions before they are published in the Federal Register. It is unclear how long this process will take. It could take weeks, months or even years. In addition, the OFCCP has not announced what the proposed replacement to the standards will be.
So what does this mean for Federal Contractors? Internal equity is key. Being proactive in establishing a fair, objective and consistent pay structure is essential. SHRM quoted David Cohen, President of DCI Consulting, and he said it best. "The OFCCP can rescind its compensation standards, but it cannot rescind Title VII case law, which requires multiple regression analysis." Contractors that already are conducting proactive analysis using SSEGs and regression analysis should "stay the course," fix problems when they find them and, if audited, "stand your ground."
OFCCP Plans to Rescind Compensation Standards (DCI Consulting)
OFCCP Takes Steps to Rescind Compensation Guidelines (Seyfarth Shaw)
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