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OFCCO’s New Compensation Directive and Other Directives Aimed at Transparency

10/01/18

Author: ADP Admin/Tuesday, September 25, 2018/Categories: Bulletin News

Overview: The Office of Federal Contract Compliance Programs’ (OFCCP) has issued five new Directives in furtherance of its efforts to make the Agency more transparent and efficient.

Details: Directive 2018-05: Analysis of Contractor Compensation Practices During a Compliance Evaluation outlines “standard procedures for reviewing contractor compensation practices during a compliance evaluation.” The eight-page Directive explains the agency’s methodology for creating Pay Analysis Groups, details its statistical methodology and modeling, including a listing of the variables it will control for in its regression models. The Directive also sets out OFCCP’s process for providing contractors with information regarding its conclusions. The new compensation directive explicitly replaces the controversial Directive 307 and sets out the Agency’s current approach, and commitment to transparency, with respect to pay equity analyses. Directive 2018-05 applies to all OFCCP reviews scheduled on or after August 24, 2018, and to open reviews to the extent “they do not conflict with OFCCP guidance or procedures existing prior to the effective date.”

OFCCP also released Directive 2018-06 “Contractor Recognition Program”, which announces a program by which OFCCP will recognize contractors with “high-quality and high-performing compliance programs and initiatives”; and new Directive 2018-07 “Affirmative Action Program Verification Initiative,” which is aimed at expanding OFCCP’s enforcement reach.

Moreover, Directive 2018-08: Transparency in OFCCP Compliance Activities will “ensure transparency in all stages of OFCCP compliance activities to help contractors comply with their obligations and know what to expect during a compliance evaluation, and to protect workers from discrimination through the consistent enforcement of OFCCP legal authorities.” The detailed directive sets out roles and responsibilities for OFCCP and contractors during a compliance review as well as policies and procedures to be followed. The Directive also includes a model on-site letter that will be used by OFCCP to request an on-site review.

Finally, OFCCP also released Directive 2018-09: OFCCP Ombud Service that announces the planned implementation of an Ombud Service in the national office of OFCCP. The service will “facilitate the fair and equitable resolution of specific types of concerns raised by OFCCP external stakeholders in coordination with regional and district offices.”

Action Required: Federal contractors should stay apprised of further developments and guidance provided by the OFCCP and, as always, stay on top of timely preparing and implementing Affirmative Action Programs, where required.

As always, please be sure to contact your HR Business Partner if you have any questions.

*Produced in cooperation with Jackson Lewis P.C.

This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice.

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