From: Crowell Moring
Significant changes are just over the horizon for federal contractors and subcontractors, as the Office of Management and Budget (OMB) has approved the revised Scheduling Letter and Itemized Listing (Scheduling Letter) proposed by the Office of Federal Contract Compliance Programs (OFCCP). Three years after the OFCCP first submitted a revised Scheduling Letter to the OMB for approval, the Agency published a notice in the Federal Register on September 30th, announcing that the OMB has approved the revised Letter for use until March, 31, 2016. The revised Scheduling Letter will require contractors, at the outset of a compliance review, to submit to OFCCP individualized compensation data, personnel activity data broken out by each racial subgroup (rather than in two groupings – minorities and non-minorities), and additional materials to demonstrate compliance with the new regulations that became effective earlier this year, overhauling contractor obligations under the Veterans’ Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act.
The “big ticket” item approved by OMB is the requirement that contractors submit individualized compensation data at the outset of every desk audit. This is a substantial change from the prior obligation to produce only aggregate data on the average compensation of males, females, minorities and non-minorities by salary range, grade or level. The new Scheduling Letter also significantly expands the definition of “compensation” to include hours worked, incentive pay, merit increases, locality pay and overtime. These revisions illustrate OFCCP’s ever-increasing focus on compensation issues. They also serve to re-emphasize how important it is for contractors to conduct privileged analyses of their compensation prior to audit so that they can better understand their vulnerabilities and perhaps take corrective action to address disparities prior to submitting their data for review.