Government Contractor Update – Proposed Pay Transparency Rule, New Compensation FAQs, Construction Contractor Audits

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There were several developments of interest to government contractors and subcontractors this past month, including the following:

  • Pay Transparency. The Federal Acquisition Regulation (FAR) Council issued a proposed rule on “Pay Equity and Transparency in Federal Contracting.” The rule would prohibit contractors and their subs from requesting or considering an applicant’s compensation history for certain positions, and would require them to disclose the expected salary range in job advertisements. Interested parties may submit comments on the proposed rule through April 1, 2024 through the Federal Register website. The FAR Council will consider the comments and may make changes to the proposed rule before issuing a final rule.
  • Compensation FAQs. The Office of Federal Contract Compliance Programs added a new “Compensation History” section to its FAQs. Of particular interest, the OFCCP notes that an employer’s reliance on prior salary in making hiring and compensation decisions, although not expressly prohibited by law, may result in unlawful pay discrimination based on race and sex in violation of Executive Order 11246, which prohibits discrimination and requires affirmative action for women and minorities, among other groups.
  • Construction Contractor Audits. The OFCCP has announced two initiatives that will revamp its audit selection process and audit procedures for construction contractors.
    • First, the OFCCP proposes to reinstate the long-abandoned Monthly Employment Utilization Report (CC-257), a monthly report of employee work hours and employee count by race/ethnicity, gender and trade in a covered area, which it will use to select contractors for audit. Comments may be submitted here through April 23, 2024.
    • Second, the OFCCP proposes to make substantial revisions to its information collection requirements, including the construction compliance review scheduling letter and itemized listing, which set forth the items and information that construction contractors must provide during an audit. The proposed changes will make the audit process more burdensome for construction contractors. Comments may be submitted here through April 26, 2024.