OFCCP issues revised directive for compensation analysis

Covered federal contractors have been tasked by the federal government with preventing disparities in pay for their employees based on race, gender, and ethnicity. To prevent such disparities, the Office of Federal Contract Compliance Programs (OFCCP) under the U.S. Department of Labor (DOL) requires federal contractors to annually conduct an in-depth compensation analysis.

In early 2022, the OFCCP issued Directive 2022-01. This aimed to give guidance on how the OFCCP would ensure compliance with its compensation analysis obligations. Recently, however, a revised version of this guidance has been issued. In this article, we will discuss the changes in the revised directive and how that affects strategy for compliance with the compensation analysis for federal contractors.

Background

On March 15, 2022, the OFCCP issued Directive 2022-01. As mentioned above, the purpose of the directive was to “provide guidance on how OFCCP will evaluate federal contractors’ compliance with compensation analysis obligations and clarify OFCCP’s authority to access and review documentation of compensation analyses.”

Ultimately, the directive encouraged federal contractors to devote greater attention to their duties regarding analyzing compensation systems. Notably, the directive suggested that the OFCCP could compel contractors to provide their compensation analyses, including privileged attorney-client communications and attorney work product.