Federal Contractor Update – Revised Compensation Analysis Directive, Objections to Disclosure of EEO-1 Reports, and New Construction Contract Portal

The Office of Federal Contract Compliance Programs had a busy month, issuing several documents and resources of interest to federal contractors and subcontractors. These include the following:

• Compensation Analysis. The OFCCP has issued a revised Directive, “Advancing Pay Equity Through Compensation Analysis.” When originally issued in March, the Directive controversially appeared to require the disclosure of attorney-client privileged communications and attorney work product. The Directive now clarifies that it does not require production of such protected information. The Directive further:
  • Identifies the documentation that OFCCP requires from a contractor to determine that the contractor has satisfied its obligation to perform a compensation analysis:
    • when the compensation analysis was completed;
    • the number of employees the compensation analysis included and the number and categories of employees the compensation analysis excluded;
    • which forms of compensation were analyzed and, where applicable, how the different forms of compensation were separated or combined for analysis (e.g., base pay alone, base pay combined with bonuses, etc.);
    • that compensation was analyzed by gender, race, and ethnicity; and
    • the method of analysis employed by the contractor (e.g., multiple regression analysis, cohort analysis, etc.).
  • Explains the documentation required from a contractor when its compensation analysis identifies problem areas to demonstrate that it has implemented action-oriented programs:
    • the nature and extent of any pay disparities found, including the categories of jobs for which disparities were found, the degree of the disparities, and the groups adversely affected;
    • whether the contractor investigated the reasons for any pay disparities found;
    • that the contractor has instituted action-oriented programs designed to correct any problem areas identified;
    • the nature and scope of these programs, including the job(s) for which the programs apply and any changes (e.g., pay increases, amendments to compensation policies and procedures) the contractor made to the compensation system; and
    • how the contractor intends to measure the impact of these programs on employment opportunities and identified barriers.

• Objections to the Release of EEO-1 Reports. The OFCCP has issued a Notice that gives multi-establishment contractors the opportunity to provide written objections to having demographic data from their EEO-1 Reports from 2016-2020 disclosed in response to a specific Freedom of Information Act request (Component 2 pay data has not been sought), on the basis that such information constitutes “trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential.” There are FAQs for contractors wishing to object to the release of their EEO-1 data, as well as a portal for submission of objections. The OFCCP also details the information that contractors should submit in support of their objection.
• Notification of Construction Contract Award Portal. Construction contractors and subcontractors are required to submit notice to the agency within 10 working days of the award of a federal or federally assisted contract or subcontract exceeding $10,000. Typically, this is done by mail or email. However, the OFCCP has announced a new online portal by which notice should now be submitted, along with FAQs on the portal.