Straight Talk on the Much-Anticipated “Compensation Data Collection Tool”
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Straight Talk on the Much-Anticipated “Compensation Data Collection Tool”

For something that is not yet even a Proposed Rule, the “Compensation Data Collection Tool” in the early drafting stages at the Department of Labor’s Office of Federal Contract Compliance Programs is generating a fair share of noise on the Internet.  The most recent DOL Uniform Agenda shows June 2013 as the action date for release of a Proposed Rule around the Compensation Data Collection Tool, and has labeled it a “significant priority.”

It has taken more than two years for the OFCCP to get this far on the Compensation Data Collection Tool.  It may take another two years or longer to reach a final rule.  And there may be a grace period before it becomes effective.

So why all the chatter?

Compensation discrimination is one form of discrimination that is already prohibited by Executive Order 11246.  That’s not news.

What is news is that OFCCP is once again trying to develop a tool “…to provide insight into potential problems of pay discrimination by contractors that warrant further review or evaluation by OFCCP or contractor self-audit.”

Executive Order 11246 was signed by former President Lyndon B. Johnson on September 24, 1965, applicable to federal contractors above a certain annual contract value, to prevent discrimination and take affirmative action in employment and compensation on the basis of race, color, religion, gender, or ethnicity.

The most recent OFCCP data collection and analysis aimed at federal contractors took place in two stages from 2000 to 2005.  Equal Opportunity Surveys were sent out and the collected data analyzed.  But, the EO Survey was rescinded in 2006.

Then, in 2011, OFCCP issued a Request for Comments about “…the possible design of its new data collection tool,” the Federal Register posting described 15 categories of data or information that might be collected by OFCCP.  The Request for Comments lists the potential uses of the data as

— conduct analysis
— identify and analyze industry trends, practices, and issues
— develop indicators for identifying potential noncompliance by contractors

You can find the Federal Register posting in Volume 76, at pages 49398 to 49901.

When you read through the 15 categories of data listed by OFCCP, you quickly see that for an individual employee these are the same compensation decisions and data an employer routinely makes.  For any employee, the contractor knows the starting salary or hourly rate, any shift differential, possible commissions, how many paid holidays, paid sick or personal days, and more.  At the individual employee level, it looks likely no additional work would be involved beyond the transposition of information already known to and recorded by the employer.

What could require additional work are some of the ideas within the 15 categories of data such as computing averages and matching jobs to one of the standard job classification schemes (e.g,. the Occupational Classification Codes), and company policies relating to wages and benefits.  Even so, the data collection is likely to be in an electronic form, and could easily function like any other computer program, simply taking the individual data entered and automatically converting it into the desired aggregate data.

As with any compliance rule or regulation, the Compensation Data Collection Tool would present an opportunity for contractors to learn more about their own companies.  When a contractor goes through data capture and analysis, it can dispel misimpressions that were holding back a company from reaching its full potential through diversity and equality in its workforce.

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