[Federal Register Volume 76, Number 154 (Wednesday, August 10, 2011)]
[Proposed Rules]
[Pages 49398-49401]
From the Federal Register Online via the Government Printing 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