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Compensation Analysis

While sexual harassment gets the most press, pay discrimination found in routine Department of Labor Compliance Evaluations (formerly, Compliance Reviews) may cost your company more and result in even more unfavorable publicity than complaints brought by employees. In the last year or two the Office of Federal Contract Compliance Programs (OFCCP) has become increasingly interested in contractor companies' compensation practices.

  • In the Affirmative Action Plan
    The new regulations require that in every Executive Order 11246 Affirmative Action Plan: "At a minimum ... must evaluate compensation system(s) to determine whether there are gender-, race-, or ethnicity-based disparities;" (41 CFR 2.17(b))

  • For Compliance Evaluations
    In the listing of required support data, the OFCCP is now requesting compensation data as part of the scheduling letter for all Compliance Evaluations (except for compliance checks).

  • In the Equal Opportunity Survey
    In the new Equal Opportunity Survey, the OFCCP requires employers to provide compensation data coupled with tenure data.

Because the OFCCP is looking for discrimination in pay practices, we strongly encourage our client companies to find their own areas of potential discrimination before the OFCCP does. It is imperative that your company conduct its own compensation analyses at least annually, and always before submitting compensation data to the federal government -- whether in response to a Compliance Evaluation scheduling letter or an Equal Opportunity Survey.

We will be happy to assist you in conducting a compensation analysis to determine any potential areas of discrimination. Specifically, we can:

  • offer guidance to your compensation department in conducting its own compensation analysis;

    OR

  • conduct the compensation analysis for your company, using:
 
  • the same analysis the OFCCP will use (DuBray approach), in order to know where they will focus their attention; and

  • more statistically sound analyses.

For more information regarding the OFCCP's methods of analyzing compensation, please visit their website.

 

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