OFCCP Remains Focused on Pay Equity, Data Tool, Assistance, Director Shiu Says

With an emphasis on practical strategies to improve productivity and performance, and limit potential liabilities, Bulletin to Management™ concisely analyzes new developments in employment and human resources management.

By Kevin P. McGowan  


INDIANAPOLIS--As part of a “robust” regulatory agenda, the Labor Department's Office of Federal Contract Compliance Programs remains focused on contractors' compensation systems and preventing sex and race discrimination in pay practices, OFCCP Director Patricia Shiu told a meeting of employer representatives July 31.

Speaking at the Industry Liaison Group's 31st annual national conference, Shiu told participants she was among those attending a White House ceremony in June commemorating the 50th anniversary of the Equal Pay Act.

She called the ceremony a sign of the Obama administration's ongoing determination to address a persistent gender pay gap that has female workers still earning about 80 cents for every dollar earned by men.

“We are committed to doing what it takes to close that pay gap once and for all,” Shiu said.

In February, OFCCP rescinded compensation guidelines promulgated in 2006 by the Bush administration that the current administration considered too rigid and issued Directive 307, indicating a new approach to evaluating contractors' pay practices in accord with principles under Title VII of the 1964 Civil Rights Act (64 BTM 73, 3/5/13).

Shiu said OFCCP plans to propose a compensation data collection tool, which has been in development since the agency issued an advance notice of proposed rulemaking on the topic in August 2011 (62 BTM 258, 8/16/11).

OFCCP also is developing an “in-depth compliance assistance program” for contractors specifically focused on compensation issues that the agency expects to roll out sometime in 2014, Shiu told the group.

Although the Obama administration since 2009 has made the gender pay gap a priority, Shiu said the issue has taken on “increasing urgency” as one critical not only for women, but also for families in which a woman is the sole or primary breadwinner.

Eliminating the gender pay gap means stoking economic growth and increasing the purchasing power of U.S. households, Shiu said.

Proposed Changes to Sex Bias, Construction Rules Coming

Also on the regulatory front, Shiu said federal contractors in the “months ahead” also should expect to see proposals to revise “outdated” rules regarding sex discrimination and construction industry affirmative action that have not been changed in more than 30 years. The current sex discrimination regulations, for example, do not even address the changes wrought by the 1978 pregnancy discrimination amendment to Title VII, Shiu said.

Shiu added that, in general, the agency's intent in issuing new regulations is to provide “very clear thresholds” against which contractors can measure their own compliance with the nondiscrimination and affirmative action obligations under Executive Order 11,246, Section 503 of the Rehabilitation Act, and the Vietnam-Era Veterans' Readjustment Assistance Act.

Shiu did not specifically mention OFCCP's proposed Section 503 and VEVRAA regulations that would establish benchmarks and utilization goals for contractors' hiring of protected veterans and persons with disabilities.

But speakers at other conference sessions July 31 said OFCCP this week sent to the White House Office of Management and Budget the Labor Department's tentative final rules on both topics.

Voluntary Compliance Preferred

Thomas Perez, the new labor secretary, is a “strong believer” in “building and strengthening relationships” with employers and has said promoting job creation and safeguarding workers' rights are not “mutually exclusive” but rather complementary goals, Shiu told the conference.

Shiu said it “would be a mistake” for contractors to think that OFCCP's mission is inimical to job creation and expansion.

Instead, she emphasized that her vision for OFCCP is “facilitating the success” of employers that take on federal contracts and their affirmative action requirements.

A diverse workplace is a “better workplace” and a “fairer workplace” but also a more productive and profitable workplace for federal contractors, Shiu said.

Since 2009, the agency has audited some 19,000 contractor establishments employing about 7.5 million workers and obtained about $45 million in financial remedies for alleged discrimination victims, Shiu said.

It also is working to “create lasting relief” in workplaces where violations are found, including 9,300 potential job offers for workers in settlements over the past four years, Shiu said.

“As always, our goal is to achieve voluntary compliance,” Shiu emphasized.

She said in more than 99 percent of OFCCP compliance reviews, the agency finds contractors in compliance or able to achieve compliance voluntarily.


Shiu said it “would be a mistake” for contractors to think that OFCCP's mission is inimical to job creation and expansion. Instead, she emphasized that her vision for OFCCP is “facilitating the success” of employers that take on federal contracts and their affirmative action requirements.




Among the key factors for contractors to maintain compliance, Shiu said, are “proper prior planning” and accountability throughout an employer's organization to nondiscrimination and affirmative action.

The affirmation action plan is “your road map to success,” not something that “just sits on the shelf” until OFCCP comes calling, Shiu said.

The AAP should be a live document that “reflects a unified commitment to diversity” from the top of the organization through all decisionmakers, Shiu added.

Prepare and Respond Promptly

Shiu said in more than half of OFCCP compliance reviews, federal contractors have not completed their affirmative action plans within the required 120-day period after being awarded their federal contract.

OFCCP can provide technical assistance to such contractors in developing their AAPs, and Shiu emphasized that contractors that request and receive such help are not targeted or subject to any special OFCCP attention or repercussions.

“It's our job to help you succeed,” Shiu told the contractor representatives. “Just don't wait until we come knocking on your door.”

Shiu said she often is asked how OFCCP selects contractors for compliance reviews. The agency uses a scheduling process that complies with Fourth Amendment requirements and involves no targeting of particular contractors or establishments, she said.

As a courtesy, OFCCP sends corporate scheduling announcement letters (CSALs) to contractors that have been selected for review, Shiu said. The CSAL is intended to give the contractor “a little extra time” to prepare for OFCCP's audit in advance of the formal scheduling letter, she said.

The CSAL is a notice to “start your engines,” Shiu quipped. She advised that once the contractor receives the scheduling letter, it should promptly respond by providing OFCCP with its AAP and any other requested data within the requisite 30 days.

“We're trying to complete our audits in an efficient, businesslike manner,” Shiu said. “We want to close these evaluations as quickly as you do.”