As OFCCP continues to move forward with sweeping changes to the Supply & Service Scheduling Letter and Itemized Listing (Scheduling Letter), contractors should take steps now to prepare for more in-depth questions during audits, especially around employee pay. While pay equity has been an OFCCP enforcement priority for several years, the proposed Scheduling raises the stakes in this area.
The Scheduling Letter formally initiates a review of federal contractors selected for a compliance audit by the agency and identifies the items that a federal contractor must initially produce to OFCCP during the audit. The agency released an updated Scheduling Letter proposal and a Supporting Statement on April 19, 2023, providing the public with 30 days to provide further comment. All indications are that OFCCP hopes to move forward with its proposal without a lot of additional changes.
One of the biggest surprises for contractors may be the amount of pay data that needs to be provided in every audit – not just where a desk audit reveals concerns. If the Scheduling Letter proposal is finalized, all contractors will be required to provide the following items:
You may be wondering: why does OFCCP want all this information? The answer is simple: OFCCP’s Supporting Statement for these sweeping changes makes clear that the agency believes more data is always better:
Generally, OFCCP uses statistical analyses to determine whether there are statistically significant gender, race, or ethnicity-based disparities after controlling for legitimate pay related factors. Two years of data allows OFCCP to better identify whether there is a pattern or practice of systemic compensation discrimination. Also, if the data reveals disparities for the two-year period, OFCCP can remedy the discrimination for the full two-year period (and going forward if it is a continuing violation), thereby ensuring that victims are made whole.
What to do next?
Berkshire will be closely monitoring developments regarding the agency’s proposed changes to its audit process and will keep you updated. In the meantime, if you have been thinking about embarking on a pay equity journey, now is the time to start.