It’s here! OFCCP has finally issued its long-awaited, much-anticipated, new compensation directive. The Directive explicitly replaces the controversial Directive 307 and sets out the Agency’s current approach, and commitment to transparency, with respect to pay equity analyses.
Directive 2018-05: Analysis of Contractor Compensation Practices During a Compliance Evaluation outlines “standard procedures for reviewing contractor compensation practices during a compliance evaluation.” The eight-page Directive explains the agency’s methodology for creating Pay Analysis Groups, details its statistical methodology and modeling, including a listing of the variables it will control for in its regression models. The Directive also sets out OFCCP’s process for providing contractors with information regarding its conclusions.
OFCCP also released two additional directives, Directive 2018-06: Contractor Recognition Program and Directive 2018-07: Affirmative Action Program Verification Initiative.
We are in the process of digesting the Directives and will follow up soon with detailed analysis and insights.