On August 18, 2022, the Office of Federal Contract Compliance Programs (OFCCP) published a revised Directive, titled “Advancing Pay Equity Through Compensation Analysis.” The purpose is to clarify its Directive issued in March 2022, titled “Pay Equity Audits.” OFCCP’s Director, Jenny Yang, provided more commentary about this Directive in a recent blog post.
The OFCCP reaffirms that it does not require federal contractors to provide attorney-client privileged communications or attorney work product during compliance reviews. However, contractors are required to show the OFCCP they have performed a compensation analysis and provide documentation if the analysis shows problem areas.
The Directive states that contractors are “encouraged to make their full compensation analyses available where OFCCP identifies concerns during a compliance evaluation.” However, “a contractor may conduct a separate analysis during the relevant AAP period that does not implicate privilege concerns and provide that analysis to OFCCP in full.”
The Directive also lists documentation required if the analysis shows problem areas (see below).
- the nature and extent of any pay disparities found, including the categories of jobs for which disparities were found, the degree of the disparities, and the groups adversely affected;
- whether the contractor investigated the reasons for any pay disparities found;
- that the contractor has instituted action-oriented programs designed to correct any problem areas identified;
- the nature and scope of these programs, including the job(s) for which the programs apply and any changes (e.g., pay increases, amendments to compensation policies and procedures) the contractor made to the compensation system; and
- how the contractor intends to measure the impact of these programs on employment opportunities and identified barriers.
