Shaping Smarter Regulations

OFCCP Should Withdraw Its Proposed Employee Compensation report

The Office of Federal Contract Compliance Programs has published an NPRM which would require federal subcontractors to submit to the federal government employee summary compensation data collected in an “Equal Pay Report” (EPR). (Though the rule is not yet final, we include it in this submission because the comment period has closed (as of January 5, 2015) and the RFI only prohibits review of “DOL rulemakings currently open for public comment.” (emphasis added).) According to the proposal, “OFCCP will collect and analyze the contractor summary compensation data to establish objective industry standards for identifying potential discrimination in employee compensation.”

 

The OFCCP has proposed a January 1 to March 31 report filing window for the EPR, and has proposed that the EPR include “summary compensation data using total W-2 earnings paid as of the end of each calendar year for each worker who was included in the contractor’s EEO-1 report for that year.” The EEO-1 report is currently based on an employer’s workforce during a payroll period between July 1 and August 31, and has a filing deadline of September 30. As such, the proposal requires contractors to report, by March of each year, on the compensation of their workforce as it existed six months previously.

 

The disconnect between the timing of the EEO-1 report and the EPR will create significant administrative burdens for contractors and result in outdated data that does not reflect the contractor’s existing workforce at the time of submission. The separate reporting timeframes means that contractors will be required to prepare reports at two different reporting cycles, rather than combining the reporting obligations to one time period. Additionally, due to the six-month gap, contractors will be reporting on just some of their actual workforce as it exists at the time of filing. The data will include employees who terminated after the EEO-1 filing in September and will not include those who have been hired since that time. This unnecessarily duplicative and ineffective timeframe for filing the EPR report makes this proposed regulation a prime candidate for “for review, modification due to conflicts,[or] inconsistencies.” 80 FR 5715. Accordingly, the timing of submission for both the EEO-1 and EPR reports should coincide so as to make OFCCP’s proposed rule “more effective and least burdensome.” Id.

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Idea No. 63