[Federal Register Volume 76, Number 154 (Wednesday, August 10, 2011)]
[Proposed Rules]
[Pages 49398-49401]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-20299]
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DEPARTMENT OF LABOR
Office of Federal Contract Compliance Programs
41 CFR Parts 60-1
RIN 1250-AA03
Non-Discrimination in Compensation; Compensation Data Collection
Tool
AGENCY: Office of Federal Contract Compliance Programs.
ACTION: Advance notice of proposed rulemaking.
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SUMMARY: The Office of Federal Contract Compliance Programs (OFCCP) is
issuing this Advance Notice of Proposed Rulemaking in order to invite
the public to provide input on the development and implementation of a
compensation data collection tool. Possible uses for the collected data
include generating insight into potential problems of compensation
discrimination at the establishment level that warrant further review
or evaluation by OFCCP or contractor self-audit. OFCCP could use the
data collected by the tool to conduct analyses at the establishment
level, as well as to identify and analyze industry trends, Federal
contractors' compensation practices and potential equal employment-
related issues.
OFCCP is issuing this Advanced Notice of Proposed Rulemaking to
solicit comments from interested parties as early as possible in the
development process of this new data collection tool. There will, of
course, be an additional opportunity to comment following the
[[Page 49399]]
publication of the Notice of Proposed Rulemaking. However, to maximize
the opportunity to participate in the rulemaking process, OFCCP
strongly encourages all interested parties to take this opportunity to
submit any ideas, comments or concerns which OFCCP should consider in
the course of designing this compensation data collection tool. OFCCP
is especially interested in the nature of data that would be most
useful for analysis, and any practical implementation issues.
DATES: All comments must be received on or before October 11, 2011.
ADDRESSES: You may submit comments, identified by RIN number 1250-AA03,
by any of the following methods:
Federal eRulemaking Portal: www.regulations.gov. Follow
the instructions for submitting comments.
Mail and Hand delivery/Courier: Debra A. Carr, Director,
Division of Policy, Planning, and Program Development, Office of
Federal Contract Compliance Programs, Room C-3325, 200 Constitution
Avenue, NW., Washington, DC 20210.
Receipt of submissions will not be acknowledged; however, the
sender may request confirmation that a submission has been received by
telephoning OFCCP at (202) 693-0103 (voice) or (202) 693-1337 (TTY)
(these are not toll-free numbers).
All comments received, including any personal information provided,
will be available online at http://www.regulations.gov and for public
inspection during normal business hours at Room C-3325, 200
Constitution Avenue, NW., Washington, DC 20210. People who require
assistance to review comments will be provided with appropriate aids
such as readers or print magnifiers. Copies of this Advance Notice of
Proposed Rulemaking will be made available in the following formats:
Large print, Braille, electronic file or computer disk, and audiotape.
To schedule an appointment to review the comments or this Advance
Notice of Proposed Rulemaking in an alternate format, contact OFCCP at
the telephone numbers or address listed above.
FOR FURTHER INFORMATION CONTACT: Debra A. Carr, Director, Division of
Policy, Planning and Program Development, Office of Federal Contract
Compliance Programs, 200 Constitution Avenue, NW., Room C-3325,
Washington, DC 20210. Telephone: (202) 693-0103 (voice) or (202) 693-
1337 (TTY).
SUPPLEMENTARY INFORMATION: The Department of Labor's Office of Federal
Contract Compliance Programs (OFCCP or Agency) enforces Executive Order
11246 (Executive Order) which requires Federal Government contractors
and subcontractors to provide equal employment opportunity through
affirmative action and nondiscrimination based on race, color, national
origin, religion, and sex.\1\ Compensation discrimination is one form
of discrimination prohibited by the Executive Order.
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\1\ OFCCP also enforces Section 503 of the Rehabilitation Act of
1973, as amended, 29 U.S.C. 793 and the Vietnam Era Veterans'
Readjustment Assistance Act of 1974, as amended, 38 U.S.C. 4212.
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Identifying and remedying compensation discrimination remains an
important part of OFCCP's compliance efforts. In 2000, concerns about
compensation discrimination led OFCCP to require contractors to
proactively conduct in-depth analyses of their compensation systems to
ensure that those systems were not discriminatory.\2\ That same year,
OFCCP began requiring contractors to submit compensation data requested
in the scheduling letter at the outset of a compliance evaluation to
permit the agency to evaluate compensation practices as a matter of
course in reviews.
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\2\ See 41 CFR 60-2.17(b)(3).
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In 2000, OFCCP also initiated a reporting requirement, the Equal
Opportunity Survey (EO Survey), which required a subset of contractors
to submit information to OFCCP independent of OFCCP compliance
evaluations. 65 FR 68022, 68046 (November 13, 2000). The EO Survey
required contractors to submit information about personnel activities,
compensation and tenure, and certain information about the contractor's
affirmative action program. The EO Survey had three major objectives:
(1) To increase compliance with equal opportunity requirements by
improving contractor self-awareness and encouraging self-evaluations;
(2) To improve the deployment of scarce federal government
resources to those contractors that were most likely to be out of
compliance;
(3) To increase agency efficiency by building on the tiered-review
process already accomplished by OFCCP's regulatory reform efforts,
resulting in better resource allocation.
65 FR 68039.
From its inception, OFCCP was concerned about verifying the utility
and efficiency of the EO Survey. The development of the EO Survey began
in March 1998, with initial field testing beginning in August 1999. In
April 2000, a pilot EO Survey was sent to approximately 7,000
contractors. After receipt of the pilot EO Survey responses, OFCCP
commissioned a study to determine whether the pilot EO Survey results
could be used to predict whether a contractor would have findings of
non-compliance. Bendick & Egan Economic Consultants, Inc., The Equal
Opportunity Survey: Analysis of a First Wave of Survey Responses (Sept.
2000)(Bendick Report). The report concluded that the potential
increases in OFCCP efficiency and effectiveness through use of the EO
Survey could be substantial and recommended that use of the survey be
expanded and refined. Bendick Report at 31.
OFCCP mailed 53,000 EO Surveys between December 2000 and March
2001, and 10,000 per year from 2001-2004. OFCCP commissioned another
study to determine whether the EO Survey could be used to develop a
model that more effectively targets contractors who engage in systemic
discrimination. The report, issued in 2005, concluded that the EO
Survey had little predictive value as a tool for indicating
discrimination or non-compliance.\3\ All of these studies have data
limitations that undermine drawing firm conclusions about the true
predictive power of the EO Survey. However, based primarily on this
2005 report, OFCCP rescinded the EO Survey in 2006.\4\
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\3\ Abt Associates Inc., An Evaluation of OFCCP's Equal
Opportunity Survey, p. 39, (Feb. 2005).
\4\ See 71 FR 53032 (Sept. 8, 2006).
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The purpose of the proposed new tool is to provide insight into
potential problems of pay discrimination by contractors that warrant
further review or evaluation by OFCCP or contractor self-audit.
Accordingly, it is envisioned primarily as a screening tool, although
it may also have research value. The tool would allow OFCCP to
effectively and efficiently identify supply and service contractors
whose compensation data indicates that further investigation is
necessary to ensure compliance with the non-discrimination requirements
of the Executive Order and would provide contractors with a self-
assessment tool that may be used periodically to evaluate the effects
of their employee compensation decisions. The data collected through
this tool may be used to identify contractors for compensation focused
reviews as well as full compliance reviews. Women still earn only 77
cents for each dollar earned by a man.\5\ The wage gap is even greater
for
[[Page 49400]]
women of color: non-Hispanic white women make 75 cents for every dollar
earned by a non-Hispanic white man, while African-American women make
62 cents and Latinas make 53 cents for every dollar earned by a non-
Hispanic white man.\6\ Potentially non-discriminatory factors can
explain some of these differences. Even so, after controlling for
differences in skills and job characteristics, women still earn less
than men.\7\ Some scholars find that these differences can be
explained, to some extent, by differences in education and prior labor
market experience.\8\ Others identify job segregation as an important
cause of the pay gap.\9\ Ultimately, the research literature still
finds that an unexplained gap exists even after accounting for
potential explanations.\10\ Moreover, research literature finds that
the narrowing of the pay gap has slowed since the 1980's.\11\ To the
extent that these factors, such as type of job or amount of continuous
labor market experience, are also influenced by discrimination, the
``unexplained'' difference may understate the true effect of
discrimination. In addition to the gender pay gap, scholars have found
race and ethnicity-based pay gaps that put workers of color at a
disadvantage.\12\ As a result, eliminating compensation discrimination
by Federal contractors has been, and continues to be, a priority issue
for OFCCP.
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\5\ Calculations from U.S. Census Bureau, Current Population
Survey, 2010 Annual Social and Economic Supplement, Table PINC-05:
Work Experience in 2009--People 15 Years Old and Over by Total Money
Earnings in 2009, Age, Race, Hispanic Origin, and Sex, available
athttp://www.census.gov/hhes/www/cpstables/032010/perinc/toc.htm
(last visited Dec. 7, 2010).
\6\ Id.
\7\ Explaining Trends in the Gender Wage Gap, A Report by the
Council of Economic Advisers (June 1998).
\8\ See O'Neill, June E., ``The Gender Gap in Wages, Circa
2000,'' American Economic Review (May 2003).
\9\ Jacobsen, Joyce P., The Economics of Gender (2007).
\10\ Jacobsen, supra; see also, e.g., Blau, Francine D. and
Kahn, Lawrence M.,''The U.S. Gender Pay Gap in the 1990s: Slowing
Convergence,'' 60 Industrial and Labor Relations Review 45 (2006).
\11\ Id.
\12\ Altonji, Joseph G. and Blank, Rebecca M., ``Race and Gender
in the Labor Market,'' in Ashenfelter, Orley and Card, David, eds.,
Handbook of Labor Economics (1999).
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Before developing a proposed regulation, OFCCP seeks comments from
members of the public on issues relating to the scope, content and
format of the data collection tool, as well as suggestions for ensuring
that the tool will be an effective and efficient means of identifying
contractors for review. In addition, OFCCP will conduct web-based and
Town Hall listening sessions to provide an opportunity for stakeholders
to offer suggestions and recommendations related to the scope, content
and format of the data collection tool in the months ahead. Notices
will be placed on OFCCP's Web site and email alerts sent out in
advance. In developing a Notice of Proposed Rulemaking and the data
collection tool itself, OFCCP will take into consideration comments
provided in response to this Advance Notice of Proposed Rulemaking
(``ANPRM'') and during the various listening sessions.
The purpose of this ANPRM, which is the first step toward
publishing a Notice of Proposed Rulemaking, is to request comments and
data from the public on the following issues.
Request for Comments
OFCCP is seeking comments on a series of specific questions about
the possible design of its new data collection tool, as well as
comments on other aspects of the tool that would assist the agency in
carrying out its mission. OFCCP could use the data collected by the
tool to conduct analysis at the establishment level, as well as
identify and analyze industry trends, Federal contractors' compensation
practices and potential equal employment-related issues. The data
collected could be instrumental to developing indicators for
identifying potential noncompliance by contractors and executing
OFCCP's authority related to compensation discrimination.
OFCCP seeks to maximize the potential value of this data collection
tool while taking into account the reporting burden created for
contractors and the technology and/or analytic burdens placed on the
agency. Public comment on these larger questions would be helpful with
regard to any of the more specific requests for comments on the
categories of data or analyses described below.
1. What data or information should be collected in order for OFCCP
to assess whether further investigation into the contractor's
compensation decisions and policies is necessary? In developing your
response, please consider whether any of the following categories of
data, reported by gender and race/ethnic groups, singly or in
combination, would effectively identify potential compensation
discrimination:
(a) Average starting or initial total compensation (including paid
leave, health and retirement benefits, etc.);
(b) Average pay raises;
(c) Average bonuses;
(d) Minimum and maximum salary;
(e) Standard deviation or variance of salary;
(f) The number of workers in each gender and race/ethnicity
category;
(g) Average tenure;
(h) Average compensation data by job series (e.g., all engineers
within a particular department or all secretaries throughout the
establishment); and/or
(i) Any other categories of data?
2. By what set of job categories should the data referred to in
question (1) be collected? Some job group options include EEO-1 job
categories,\13\ OFCCP's Affirmative Action Program job groups,\14\ 2 or
3-digit Standard Occupational Classification Codes,\15\ O*Net
Occupational Classification Codes,\16\ salary bands, salary bands
within EEO-1 categories, individual job titles or individual job titles
within EEO-1 job categories. Are there other options? What are the
benefits and drawbacks of the various options?
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\13\ Employer Information Report EEO-1: EEO-1 Job Classification
Guide, available at http://www.eeoc.gov/employers/eeo1survey/upload/jobclassguide.pdf (last visited July 13, 2011).
\14\ See 41 CFR Part 60-2.
\15\ Department of Labor, Bureau of Labor Statistics, Standard
Occupational Classification, available at http://www.bls.gov/soc/
(last visited July 13, 2011).
\16\ Department of Labor, Bureau of Labor Statistics,
Occupational Outlook Handbook, 2010-11 Edition, available at http://www.bls.gov/oco/oco2007.htm (last visited July 13, 2011).
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3. What elements of compensation should be collected? In developing
your response consider the following elements:
(a) Total W-2 earnings;
(b) Base salary;
(c) Holiday pay;
(d) Hourly wage;
(e) Shift differential;
(f) Commissions;
(g) Stock options; and/or
(h) Any other elements of compensation (e.g., paid leave, health or
retirement benefits)?
4. Is there a set of questions that would capture information that
would be helpful in understanding a contractor's compensation system,
such as policies relating to promotion decisions, bonuses, shift pay,
setting of initial pay, etc.?
5. OFCCP may use the data collected through the tool to conduct
industry-wide compensation trend analyses.
(a) What type of compensation trend analyses would be appropriate
to conduct on an industry-wide basis?
(b) For each type of analysis identified in subpart (a) above,
identify the: (i) Categories of data that should be collected in order
to compare compensation data across contractors in a particular
industry and (ii) job groupings that should be used.
6. The data collected through the tool may be used to identify
contractors in
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specific industries for industry-focused compensation reviews. What
specific categories of data would be most useful for identifying
contractors in specific industries for industry focused compensation
reviews?
7. OFCCP is exploring the possibility of using the data collected
through the tool to identify opportunities for nationwide multi-
establishment compensation reviews.
(a) What specific categories of data would be most useful for
conducting compensation analyses across a contractor's various
establishments?
(b) What are the benefits and drawbacks of collecting contractor's
compensation data on a nationwide basis rather than on an individual
establishment basis?
(c) What are the benefits and drawbacks of collecting contractor's
compensation data on a nationwide basis in addition to an individual
establishment basis?
8. The data collection tool may require contractors to submit data
on an establishment basis. Given the possible designs of the tool and
its proposed uses, OFCCP is interested in learning of any practical
concerns contractors may have regarding responding to the compensation
data request and how contractors currently record and maintain
compensation data. Specifically:
(a) What general tasks would be required by a contractor in order
to provide the compensation data?
(b) What categories of compensation-related data are currently
maintained in computer-based personnel or payroll systems?
(c) What specific costs and/or benefits would be associated with
collecting this type of data?
9. OFCCP is considering designing the tool so that it may be used
by contractors to conduct self-assessments of their compensation
decisions. What specific categories of data would be most useful to
contractors interested in using the tool in this manner?
10. What were the strengths and weaknesses of the compensation
section of the 2000 EO Survey? \17\
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\17\ A blank copy of the 2000 EO Survey will be posted in
www.regulations.gov as a supporting document to this ANPRM. To view
the EO Survey in http://www.regulations.gov search by RIN number
1250-AA03.
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11. OFCCP is considering requiring contractors to submit data
electronically. What factors should OFCCP take into consideration when
designing this data collection tool? Interested parties should suggest
preferred formats--i.e., a web-based form (like the EEO-1), excel
spreadsheet, etc. What types of databases are currently used, if any,
to maintain personnel and payroll data?
12. An option that OFCCP is considering is the possibility of
requiring businesses that are bidding on future Federal contracts to
submit compensation data as part of the Request for Proposal process.
In such a case, the data collected may be used for trend analyses as
well as targeting contractors for post-award compliance reviews. What
are the benefits and drawbacks of administering the data collection
tool in this manner?
13. Should OFCCP decide to expand the scope of the compensation
data collection tool beyond supply and service contractors to include
construction contractors, what factors or issues particularly relevant
to such contractors should OFCCP keep in mind when designing and
implementing the tool?
14. Are there other constructive suggestions for the design,
content, analysis, and implementation of a compensation data collection
tool?
15. Consistent with the Regulatory Flexibility Act, OFCCP must
consider the impact of any proposed rule on small entities, including
small businesses, small nonprofit organizations and small governmental
jurisdictions with populations under 50,000. In response to this ANPRM,
OFCCP encourages small entities to provide data on how they may be
impacted by the requirement to provide the compensation data requested
by the new data collection tool.
(a) The Department seeks public comment on the types of small
entities and any estimates of the numbers of small entities that may be
impacted by this rule.
(b) The Department seeks public comment on the potential
identifiable costs of the data collection on small entities.
(c) The Department seeks public comment on any possible
alternatives to the proposed measures that would allow OFCCP to achieve
its objectives while minimizing any likely adverse impact to small
businesses such as allowing smaller establishments to submit
administrative data--for example, quarterly unemployment insurance tax
payments that would include wage information--augmented by gender and
race/ethnicity identification, but without other compensation details.
OFCCP encourages interested parties to comment on these questions
and the related questions of how OFCCP can maximize the potential value
of this data collection tool while taking into account the reporting
burden created for contractors and the technology and/or analytic
burdens placed on the agency.
Dated: August 5, 2011
Patricia A. Shiu,
Director, Office of Federal Contract Compliance Programs.
[FR Doc. 2011-20299 Filed 8-9-11; 8:45 am]
BILLING CODE 4510-45-P