Earlier this week, the Office of Federal Contract Compliance Programs (OFCCP) issued an opinion letter that serves as Director Leen’s first attempt at directly addressing the use of Pay Analysis Groupings (PAGs) in audits. This is the agency’s second opinion letter since a November 2018 directive that committed to providing guidance to federal contractors through these opinion letters.
Specifically, this letter reviews the question of whether contractors can work directly with the agency to establish a PAG structure that would be deemed acceptable prior to an OFCCP audit. Director Leen writes that contractors can submit their PAG structure to the agency for review and feedback, to be considered in future audits. However, he also writes that the agency cannot “conclusively agree” that it will use any predetermined PAGs in future compliance reviews as the factors affecting that workforce and its compensation might have changed since review of the PAGs. OFCCP analyzes compensation data based on the systems and structures that were in place during the period under review, so that information would take precedence over any previously reviewed or “approved” PAGs.