An EO Survey By Any Other Name? OFCCP's Proposed Rulemaking on New Compensation Data Collection Tool

The Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) today issued an advance notice of proposed rulemaking (ANPRM) inviting public comment on the agency's development and implementation of a new compensation data collection tool. The purpose of the new data collection tool is "to provide insight into potential problems of pay discrimination by contractors[.]" According to the ANPRM, the new data collection tool is intended to be used primarily as "a screening tool" that would "allow OFCCP to effectively and efficiently identify supply service contractors whose compensation data indicates that further investigation is necessary to ensure compliance with the non-discrimination requirements of" Executive Order 11246. In addition, the data collection tool could be used to "identify and analyze industry trends[.]"

The OFCCP's proposed data collection tool threatens to impose a significant compliance burden on contractors attempting to gain access to government contracts at the federal level. The agency's ANPRM raises the specter of reintroducing the controversial Equal Opportunity (EO) Survey, which required federal contractors from 2000 to 2006 to report information on personnel data and compensation by EEO-1 category.[1] The EO Survey was widely criticized by the federal contractor community as being unduly burdensome, particularly for contractors that utilized functional affirmative action programs that then had to report data by establishment. In 2006, the OFCCP rescinded the EO Survey after two independent studies concluded that the EO Survey had little predictive value as a tool for indicating discrimination or non-compliance.[2] 

The proposed compensation data tool would enhance the obligations imposed by the former EO survey. In addition, it  would define compensation extremely broadly to include individual W-2 earnings; base salary; holiday pay; hourly wage; shift differential; commissions; stock options; and other elements of compensation (e.g., paid leave, health or retirement benefits). OFCCP is also considering the collection of data on: average starting or initial total compensation (including paid leave and health and retirement benefits); average pay raises; average bonuses; minimum and maximum salary; standard deviation or variance of salary; the number of workers in each gender and race/ethnicity category; average tenure; and average compensation data by job series (e.g., all engineers within a particular department or all secretaries throughout the establishment).

Federal contractors have the opportunity during the comment period to provide input on issues relating to the scope, content, and format of the data collection tool to ensure that it is an effective and efficient data collection instrument. Specifically, the ANPRM sets forth 15 questions for public comment, including:

  • What are the strengths and weaknesses of the compensation section of the 2000 EO Survey? ■
  • hould OFCCP decide to expand the scope of the compensation data collection tool beyond the supply and service contractors to include construction contractors, what factors or issues particularly relevant to such contractors should OFCCP keep in mind when designing and implementing the tool?

Importantly, the OFCCP asks for comment on an option that it is considering which would require "businesses bidding on future Federal contracts to submit compensation data as part of the Request for Proposal process."  This "option" should be of great concern to federal contractors because it folds traditional federal contractor obligations into the bid proposal process.