The Office of Federal Contract Compliance Programs (OFCCP) is taking steps to strengthen its pay equity enforcement strategy.

On March 22, 2022, the OFCCP published a notice of proposed rulemaking aimed primarily at reversing regulations created under the Trump administration in 2020.

The existing regulations require OFCCP to issue contractors a predetermination notice prior to a notice of violation when audits suggest employment discrimination is present. Currently, contractors have 30 days to respond to a pre-determination notice. The deadline can be extended for good cause.

According to the agency’s March 22 proposal, amending the 2020 rule would put the agency in better alignment with its mission to ensure equal employment opportunities.

“The 2020 rule undermined OFCCP’s ability to remedy workplace discrimination,” OFCCP Director Jenny Yang wrote in a blog post. “The 2020 rule disadvantages workers by decreasing the number of contractors we can evaluate for compliance with equal opportunity laws, delaying the resolution of discrimination findings, and potentially leading to the disclosure of information from interviews with workers that may chill workers’ willingness to participate in OFCCP investigations.”

If signed into law, the proposed rule would:

  • Revoke the 2020 final rule’s “rigid” evidentiary definitions and standards and instead apply Title VII of the Civil Rights Act of 1964 standards to compliance evaluations, including during the pre-enforcement notice and conciliation stages.
  • Modify applicable procedures around the use of pre-determination notices and notices of violation and reinstate flexibility to OFCCP’s pre-enforcement and conciliation procedures.
  • Promote efficiency in resolving cases by requiring contractors to respond to pre-determination notices within 15 calendar days (with receipt from OFCCP within the same time frame).
  • Remove a severability clause that had applied to certain portions of OFCCP’s regulations and replace it with severability clauses covering every part of OFCCP’s regulations.

The proposed rule would retain aspects of the existing regulations, including regulatory language allowing for early resolution through voluntary conciliation agreements.

The OFCCP is considering public comments on the proposal through April 21, 2022.

This proposal comes on the heels of a directive OFCCP issued on Equal Pay Day last month requiring federal contractors to conduct pay equity audits. On the same day, President Joe Biden signed an executive order promoting pay equity and pay transparency in the federal workforce.

As expected, OFCCP and other federal agencies are taking a firmer stance on enforcing diversity, equity, and inclusion (DEI) standards under the Biden administration. Organizations should heed these signals at the federal level and take measures to ensure they are fostering equitable workplaces.

Performing a pay equity audit is a good first step for employers looking to keep up with the changing tide. If your organization is new to pay equity, Trusaic is here to help. Our software PayParity offers powerful pay equity auditing and analytics to help your organization proactively ensure representation, pay equitably, and promote an inclusive workplace. 

To learn more about the benefits of conducting a proactive pay equity audit, download our research report Creating a Culture of Diversity, Equity, and Inclusion, conducted by the Harvard Business Review.

Download: Trusaic and HBR Research Report

Organizations that conduct a pay equity audit must communicate their progress and achievement along the way. To help you faciliate discussions around compensation, we created the Pay Equity Communications Planner.