Agency watchdog wants more power to target contractors

A small Labor Department office is giving companies another worry about tough oversight by seeking more power to investigate federal contractors about potential pay discrimination, primarily against veterans and disabled people.

Labor’s Office of Federal Contract Compliance Programs (OFCCP) plans to do away with George W. Bush administration-era guidelines on checking companies' equal pay because it says the guidelines are too restrictive or simply not used.

“The rigidity of the current standards represents a significant departure from OFCCP’s traditional tailoring” to investigations, according to Jan. 3 Federal Register announcement to rescind the rules.

The Bush administration in 2006 set up a statistical approach to their reviews. Under those rules, discrimination must show a pattern or practice of disparate treatment and use a multiple regression analysis to identify compensation discrimination.

However, the Obama administration says those rules impose “overly narrow investigation procedures that go beyond what is required by law.” In addition, OFCCP officials say companies haven’t used guidance laid out by the previous administration on companies doing voluntary self-analyses of their compensation.

OFCCP officials now intend to get rid of the restrictive rules and use their own discretion to develop procedures to investigate contractors. Their plan is to continually refine the procedures to make them most effective.

"OFCCP will reinstitute the practice of exercising its discretion to develop compensation discrimination investigation procedures," officials wrote in the notice.

The small office has already been checking out government contractors.

Rebecca Springer, counsel at the Crowell and Morning law firm, said eight of the last 10 companies’ audits that she worked on included checks by the OFCCP.

Despite the office’s increased efforts to expand its authority to act, contractors won’t have as much information on how OFCCP will go about reviewing compensation and wages to veterans and individuals with disabilities. By doing away with the detailed statistical analyses, she said officials will take a more simple approach to reviewing companies based on the resources available to the office.

“I think we are potentially headed back to an era of much greater secrecy as to how they are analyzing compensation,” Springer said during a webinar this month.

She also expects more regulations this spring and summer about OFCCP. There could possibly be new legislation to expand OFCCP’s authority in investigating companies.

Springer recommends companies should aggressively push back against the OFCCP if they have evidence of equal compensation and no discrimination against to certain people.