OFCCP PUBLISHES NOTICE PROPOSING TO RESCIND COMPENSATION STANDARDS AND VOLUNTARY GUIDELINES

by Fred Satterwhite, Senior Consultant, DCI Consulting Group

Today's Federal Register includes OFCCP's notice proposing to rescind two guidance documents originally published in 2006 that addressed compensation discrimination, commonly referred to as the "Standards" and "Voluntary Guidelines." The Standards described the agency's methodology for investigating and identifying systemic compensation discrimination during a compliance evaluation, and the Voluntary Guidelines described the methodology that federal contractors could use to conduct proactive analyses of their compensation systems in order to comply with OFCCP regulations.

In the notice, OFCCP states that the Standards "have limited OFCCP's ability to effectively investigate, analyze and identify compensation discrimination," and the Voluntary Guidelines "are largely unused by the Federal Government contracting community and have not been an effective enforcement strategy."

In the "Background" section of the notice, OFCCP affirms that "compensation discrimination may occur on an individual basis, or systemically," arguing that the Standards- by focusing on the systemic context- limited the agency's ability to identify problems in a contractor's compensation practices. OFCCP argues that the Standards are too "rigid" and do not allow the agency to tailor its investigative and analytical procedures to the facts of a specific case. OFCCP also states that, since 2006, "contractors have rarely utilized the analytical procedures outlined in the Voluntary Guidelines when analyzing their compensation practices under section 60-2.17(b)(3)."

According to the "Proposal" section of the notice, OFCCP "believes it is unnecessary to issue new Federal Register notices articulating its interpretations of Title VII principles related to compensation discrimination," indicating that future compensation investigation procedures will instead be issued "in the same manner as procedures for investigating other forms of discrimination, for example through the FCCM, directives and staff guidance materials." The agency states that it will "provide any needed compliance assistance on section 60-2.17(b)(3) through various means, including webinars and the website distribution of Frequently Asked Questions as appropriate," rather than publishing new notices in the Federal Register.

OFCCP also makes it clear that "once rescinded, nothing in the Standards or Voluntary Guidelines or their preambles could be relied upon as a statement of OFCCP's interpretation of Title VII principles or OFCCP regulations."

Public comments on the proposal may be submitted through the Federal eRulemaking Portal site on or before March 4, 2011.

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