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Office of Federal Contract Compliance Programs (OFCCP)

 

Frequently Asked Questions:
Proposed Rule on Requirement to Report Summary Data on Employee Compensation

 

On August 6, 2014, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs issued a Notice of Proposed Rule Making proposing that covered federal contractors and subcontractors with more than 100 employees to submit an annual, Equal Pay Report on employee compensation. OFCCP is proposing to collect total W-2 earnings, total number of employees and total hours worked by sex, race and ethnicity for each EEO-1 job group (broad occupational categories like managers, professionals, sales workers and craft workers). OFCCP has also issued an Information Collection Request (ICR) that includes a sample of the form it may use to collect the summary compensation data.

General

 

Overview of the proposed rule.

 


 

General

What is a Notice of Proposed Rulemaking (NPRM)?

An NPRM is the government’s way of providing the public formal notice that it is proposing a new regulation or modifying an existing regulation.

 


 

What is an Information Collection Request (ICR)?

An ICR is an agency’s request for government approval to collect certain information. It includes a description of the collection and the agency’s plan to use the information. It may also include documents that the agency will use such as forms or surveys.

 


 

How do I submit comments on the NPRM?

You may submit comments on the NPRM by using any of the following methods:

  • Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
  • Facsimile: (202) 693-1313 (for comments of six pages or less).
  • Mail: Debra A. Carr, Director, Division of Policy and Program Development, Office of Federal Contract Compliance Programs, Room C-3325, 200 Constitution Avenue, N.W., Washington, D.C. 20210.

All comments must be received on or before January 5, 2014.

 


 

How do I submit comments on the ICR for the Equal Pay Report?

You may submit comments on the ICR by using either of the following methods:

  • The hyperlink embedded in the NPRM to navigate to the ICR for the proposed Equal Pay Report form and its instructions. The NPRM is on the Federal Register Web site at www.regulations.gov.
  • The list of “Supporting Documents” that accompanies the NPRM at www.regulations.gov.

 


 

How will I know whether OFCCP received my comments on the proposed rule?

OFCCP does not generally acknowledge receiving comments. You may, however, request confirmation that a mailed, hand delivered or faxed submission of your NPRM comments was received by OFCCP by calling (202) 693-0103 (voice) or (202) 693-1337 (TTY) (these are not toll-free numbers). All NPRM comments, whether mailed, hand delivered, faxed or submitted through the eRulemaking portal, are posted on the portal’s web site. You may go to www.regulations.gov to view your posted comments.

 


 

What does OFCCP do with the comments it receives?

OFCCP reviews and analyzes all comments it receives. Your comments assist us as we develop the Final Rule on this new reporting requirement.

 


 

Can I review comments submitted by others?

Yes. Anyone can review the comments we receive on the NPRM by going to www.regulations.gov. The comments are also available for public inspection during normal business hours at OFCCP’s Washington, D.C. office at 200 Constitution Avenue, N.W., Washington, D.C. 20210, Room C-3325. Readers, print magnifiers and other appropriate aids are available to people needing assistance.

 


 

Is there a deadline for submitting comments?

Yes. OFCCP must receive your NPRM comments on or before January 5, 2014. Comments on the ICR must be submitted by November 6, 2014.

 


 

Who should I contact for additional information?

For additional information, please call OFCCP’s Help Desk at 1-800-397-6251 (TTY: 1-877-889-5627) or go to www.dol.gov/ofccp.

 


 

Overview

Why does OFCCP want to collect compensation data?

In 2010, President Obama created the National Equal Pay Task Force (Task Force) to provide a coordinated Federal response to pay discrimination. The Task Force found that the lack of sufficient employee compensation data makes identifying wage discrimination difficult and undercuts federal enforcement efforts. To address this issue, the Task Force recommended that OFCCP collect pay data from federal contractors to help identify contractors who are more likely to be out of compliance.

Consistent with the Task Force recommendation, President Obama issued a Presidential Memorandum, “Advancing Pay Equality Through Compensation Data Collection,” on April 8, 2014. This Memorandum directed the Secretary of Labor to propose a rule within 120 days that would require Federal contractors and subcontractors to submit to DOL summary data on the compensation paid their employees, including data by sex and race.

The Equal Pay Report is designed to improve voluntary compliance by federal contractors and subcontractors with laws prohibiting pay discrimination and to deter employers from perpetuating policies and practices that lead to unfair pay disparities. Requiring federal contractors and subcontractors to report the data will lead to more contractors voluntarily changing their pay practices, and taking other proactive measures to make sure they are in compliance. Further, this data will allow OFCCP to improve the efficiency and effectiveness of its enforcement program and to focus more resources on reviewing contractors with potential pay disparities.

 


 

Who must file the Equal Pay Report under the proposed rule?

The proposed rule applies to prime contractors and first tier subcontractors who are required to file EEO-1 Report(s), have more than 100 employees, and have a federal contract, subcontract, or purchase order amounting to $50,000 or more that covers a period of at least 30 days (including modifications). Construction contractors, including construction subcontractors of any tier, are subject to the proposed rule if they meet the requirements described above.

OFCCP is also considering covering postsecondary academic institutions that file the IPEDS report with the Department of Education. OFCCP welcomes comments on covering this group under the proposed rule. The NPRM seeks comment on this proposal and on whether to use the same Equal Pay Report format for contractors who file the IPEDS report or a modified version of the Equal Pay Report.

 


 

How will the proposed rule affect small businesses?

Since contractors with 100 or fewer employees are exempt from reporting, OFCCP has already ensured that small businesses who might find it more difficult to report are excluded. Furthermore, since the report is based on records that contractors must already maintain, OFCCP has ensured that the proposed rule would not be overly burdensome for small businesses.

 


 

Will OFCCP use the compensation data as a basis for a compensation violation?

No. Information based on data from the proposed Equal Pay Report would not in itself result in any sanction or adverse action against the contractor for compensation discrimination. OFCCP would merely use the information to prioritize a contractor for a compliance evaluation, a procedure to which any Federal contractor is already potentially subject under the Executive Order.

If OFCCP selects a contractor for a compliance evaluation, that review would cover compensation data beyond what is in the contractor’s Equal Pay Report and would involve a more specific and detailed data request.

 


 

How will OFCCP ensure the confidentiality of the compensation data?

Under the proposed rule, OFCCP will treat information contained in the Equal Pay Report as confidential to the maximum extent permitted under the Freedom of Information Act, 5 U.S.C. 552. Consistent with current agency practice, OFCCP will not publicly disclose information that could cause commercial harm to contractors and subcontractors who are still in business.

As mentioned in the NPRM, OFCCP plans to design a web-based portal for reporting and maintaining compensation information that conforms with applicable government IT security standards. Moreover, the information will be accessible to a small group of agency employees who need access to the information, this data will not be widely circulated.

Finally, OFCCP may publish aggregate information based on pay data collected from the Equal Pay Report, such as ranges or averages by industry, labor market, or other groupings, but only in such a way as not to reveal any particular contactor’s or individual’s data.

 


 

How often will contractors have to submit the Equal Pay Report?

OFCCP is proposing that contractors submit the report on an annual basis.

 


 

When will contractors have to submit the Equal Pay Report?

OFCCP is proposing a reporting window of January 1 to March 31st. The data in this report would be based on W-2 earnings for the prior calendar year (Jan. 1- Dec 31st) for all employees included in the contractor’s EEO-1 report for that year. This deadline will generally align with the time period covered under a contractor’s W-2 filings. OFCCP welcomes comment on the reporting period and filing window.

 


 

How will contractors submit the Equal Pay Report?

Each contractor must submit the Equal Pay Report electronically through a web-based filing system. Contractors may key in their data electronically or upload their forms into the system using the standard formats provided by OFCCP. The Director may grant a hardship exemption from the requirement to submit the Equal Pay Report electronically. A hardship exemption may be granted in the case of unexpected technical difficulties that prevent a contractor or subcontractor from electronically submitting the Equal Pay Report by the filing deadline and, in the very rare instances, when a contractor’s payroll and human resources systems or other necessary systems are not automated.