On March 15, 2022, the Office of Federal Contract Compliance Programs (OFCCP) issued its first directive of the Biden Administration to address the requirement that federal government contractors and subcontractors perform pay equity audits. Consistent with predictions that the Biden OFCCP would focus on pay equity enforcement, the new Directive 2022-01 highlights the requirement that federal contractors and subcontractors perform regular pay equity audits as part of their affirmative action program (AAP) obligations, and indicates that OFCCP will closely scrutinize the results of these audits during its compliance evaluations.
OFCCP’s AAP regulations have long required that a federal contractor “perform in-depth analyses of its total employment process to determine whether and where impediments to equal employment opportunity exist,” including evaluation of “compensation system[s] to determine whether there are gender-, race-, or ethnicity-based disparities.” However, OFCCP has not previously provided specific guidance about the scope of this requirement. In the new directive, OFCCP appears to take the position that the AAP regulations require that contractors perform a regular, in-depth pay equity audit of their workforce to identify potential disparities.
More importantly, OFCCP’s directive also makes clear that the agency intends to request and scrutinize contractor pay equity audits in its compliance evaluations. Under the directive, if a compliance evaluation “...
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