OFCCP Rescinds Its 2006 Compensation Standards in Favor of More Flexible Approach to Pay Discrimination Compliance Evaluations

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Effective February 28, 2013, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) rescinded its much criticized 2006 Compensation Standards and Voluntary Guidelines (Compensation Standards) utilized in pay discrimination compliance evaluations of federal contractors. The Compensation Standards essentially had applied one analytic approach to pay discrimination, regardless of industry, job type or other data specific to the federal contractor’s pay practices. Not surprisingly, the OFCCP claims that the narrowly defined “cookie cutter” compliance evaluation procedures imposed by the Compensation Standards impeded the OFCCP’s investigation efforts.

The OFCCP has issued Directive 307 as guidance in place of the Compensation Standards, stating that the agency will align its enforcement activities more with “the longstanding principles under Title VII.” In doing so, the OFCCP emphasized there is no single way to prove compensation discrimination, and no particular limit on the kinds of evidence or information that may be relevant.

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