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OFCCP Encourages Submission of Pay Analysis Groups, But Won’t Commit to Accepting Them Later

Posted Tuesday, August 20, 2019 6:26 am

The Office of Federal Contractor Compliance Programs (“OFCCP”) recently issued an opinion letter addressing Pay Analysis Groupings (“PAGs”), which are groups of employees who are comparable for purposes of analyzing a contractor’s pay practices.  Specifically, the question was whether OFCCP would collaborate with contractors to develop a PAG structure that OFCCP would then accept as valid for use in future OFCCP audits.

The letter states that contractors can submit their PAG structure to OFCCP for review and feedback, “which OFCCP would take into account in future compliance evaluations.”  However, the letter noted that OFCCP’s compensation analyses during an audit would be based on the contractor’s pay systems, functions, and workforce organization as they exist or existed during the period under review.  Thus, even if a contractor worked with OFCCP to develop a PAG structure, OFCCP could not commit that it would rely upon such PAG structure in all future compliance evaluations “as there may have been material changes to factors considered by OFCCP in its initial evaluation of the contractor’s PAGs.”

Despite its inability to commit, the letter encourages contractors to submit PAGS to OFCCP for review and feedback, which would reduce pay discrimination through “proactive, self-auditing compliance.”  If a contractor decides to avail itself of this opportunity, the submission should include “sufficient data for OFCCP to determine if the aggregation is similar to what would be available in a compliance review.”  The letter does not explain what constitutes “sufficient data,” but directs requests for assistance to OFCCP’s Director of Enforcement.  OFCCP’s website currently lists Robert LaJeunesse, Ph.D., as the Acting Director of Enforcement.

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