On Jan. 5, AGC submitted comments to the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) regarding its proposed rule requiring federal contractors and subcontractors to annually report summary compensation data using a new Equal Pay Report. OFCCP originally published an Advanced Notice of Proposed Rulemaking more than three years ago announcing the desire to create such a tool. The proposed rule is the result of an April 2014 Presidential Memorandum and was published in the Federal Register on Aug. 8, 2014.
If implemented as written, the proposed rule will impact covered contractors with more than 100 employees and a contract, subcontract, or purchase order worth $50,000 or more that covers a period of at least 30 days. On an annual basis, such contractors would have to submit summary employee compensation data by sex, race, ethnicity, specified job categories, and other relevant data points that includes hours worked and number of employees. OFCCP plans to use the collected data to help direct its enforcement resources. OFCCP also states in the proposed rule that it will release aggregate summary data on race and gender pay gaps by industry and EEO-1 job category to enable contractors to review their pay data using the same metrics as OFCCP, and take voluntary compliance measures.
The proposed rule references compensation discrimination as the basis for the need of summary compensation data collection from federal contractors. In the comments, AGC expresses appreciation for OFCCP’s objective to protect workers from possible compensation discrimination. However, the comments explain that new compensation reporting or disclosure requirements for federal construction contractors are not necessary or reasonable for several reasons:
- OFCCP audits data and Equal Employment Opportunity Commission claims data do not support the need for such requirements;
- Compensation paid by federal construction contractors is already regulated by way of the Davis-Bacon Act;
- Federal construction contractors are already actively increasing wages for all workers in order to recruit and retain skilled labor as well as to comply with the new minimum wage for federal contractors;
- Tools already exist to help the government and construction companies benchmark compensation;
- Requested data do not account for a wide variety of factors used to determine compensation such as education, training, experience, industry accreditations, tenure, attitude and job assignment;
- National wage data are useless for benchmarking purposes in construction due to the highly fragmented, regionalized and project-driven nature of the industry; and
- Proprietary company information and employee privacy may be compromised.
AGC’s comments ask OFCCP to exempt federal construction contractors from the requirements of completing the Equal Pay Report. If OFCCP chooses to not honor this request, AGC’s comments ask OFCCP to simplify the requirements of compliance for construction contractors by working with the Department’s Wage and Hour Division to gain access to Davis-Bacon certified payroll data, which contain most of the data desired by OFCCP. Additional desired data are already collected and maintained by OFCCP. AGC also suggests amending the certified payroll form. Either of these approaches to data collection will eliminate new recordkeeping requirements and rely on an existing reporting framework, as directed by the President in the April memorandum.
Should none of AGC’s requests be accommodated, AGC’s comments, at the very least, ask that OFCCP specify in the final rule that federally assisted contractors are not required to complete the Equal Pay Report and that only prime and first-tier construction subcontractors are required to complete and submit the Equal Pay Report, as is the requirement for non-construction contractors. Furthermore, AGC’s comments ask that workers who are exempt under the Fair Labor Standards Act be exempt from inclusion in the Equal Pay Report because employers do not currently track hours actually worked by those employees and adding this element of tracking will be difficult and burdensome for contractors to implement.
For more information on the proposed rule, including a Fact Sheet and FAQ’s, visit OFCCP’s website.