

United States: 

OFCCP Takes Goal At Spend Equity Audits In New Directive



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In the to start with inside company directive all through Jenny Yang’s
tenure as director, the Office of Federal Agreement Compliance
Applications (OFCCP) issued Directive
2022-01, entitled “Pay Equity Audits” on March 15,
2022.
OFCCP’s directive informs contractors that the regulatory
requirement in 41 C.F.R. Portion 60-2.17(b) to “perform
in-depth analyses of … [c]ompensation devices to establish
regardless of whether there are gender-, race-, or ethnicity-based mostly
disparities” needs once-a-year quantitative “pay equity
audits.” The agency goes even more in professing that
“contractor transparency” necessitates that contractors
deliver these pay out equity audits to OFCCP on request.
Highlights of Directive 2022-01 incorporate the subsequent:
- 
- A reminder that when an OFCCP compliance analysis is
scheduled, contractors need to supply OFCCP with the payment
data and information requested in the Itemized Listing connected to
OFCCP’s Scheduling Letter. This features worker-stage
compensation for all workforce in the institution or practical
affirmative action program (FAAP) firm audited, as nicely as
documentation and procedures associated to the contractor’s
payment procedures. - When the agency’s desk audit reveals disparities in pay back
or other problems about the contractor’s shell out tactics, OFCCP
may perhaps ask for further info to look into the
contractor’s compliance. This includes the contractor’s
“pay fairness audit,” which is not particularly outlined,
but which the directive promises is a required component of the
contractor’s regulatory compliance obligations. - OFCCP will ask for “a total copy” of the
contractor’s pay back equity audit executed underneath 60-2.17(b)
such as “all pay out groupings that have been evaluated, any
variables used, and the results of the analyses, including any
disparities found.” OFCCP may well also seek “information
relating to the frequency of shell out equity audits, the interaction
to management, and how the effects ended up used” to handle
gender-, race-, and/or ethnicity-based pay back disparities. - OFCCP recognizes that contractors could conduct pay back equity audits
for needs unrelated to demonstrating compliance with OFCCP
polices. If the contractor generates a pay back equity audit
allegedly needed by the affirmative action restrictions, OFCCP
“will not require” the contractor to develop other fork out
equity audits if it “can validate that they ended up conducted
underneath privilege.” But if a contractor conducts a
“dual-reason fork out equity audit”—“i.e., 1
that implicates the two lawful worries and OFCCP
compliance”—OFCCP explained it may perhaps request this
info. - “[A] contractor engaged in litigation from OFCCP may perhaps
not withhold its fork out equity audit and compliance documents by
invoking the work-item doctrine.”









Critical Takeaways
Acquiring been stung in the latest litigation involving the
discoverability of contractors’ fork out practices and analyses,
OFCCP’s new directive indicates that the agency will proceed
its endeavours to closely examine contractors’ quantitative
assessments of fork out techniques. While the concept that
60-2.17(b) requires an annual quantitative shell out
information investigation is novel at best, OFCCP entirely intends to press the
envelope by requesting pay analyses in compliance evaluations underneath
the auspices of transparency and investigatory effectiveness. While
OFCCP’s directive does not have the drive of legislation, does not
adjust the affirmative action restrictions governing federal
contractors, and does not build lawful obligations, contractors
might want to contemplate the implications of this new directive on any
quantitative pay equity analyses that they perform.
The content material of this post is supposed to supply a general
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Well known Article content ON: Accounting and Audit from United States
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