On the eve of the Thanksgiving holiday, OFCCP has published proposed modifications to the Scheduling Letter and accompanying Itemized Listing. The deadline to submit comments on the proposed changes is January 20, 2023.
As a reminder, while OFCCP gives advance notice of audits through the CSAL, a contractor’s audit does not commence until it receives the official, OMB approved Scheduling Letter and Itemized listing which sets forth the data and documentation required for submission.
The last substantial revision to the scheduling letter occurred in 2014 when OFCCP added, among other things, individualized-level compensation data (Item 19) to the required audit submissions.
The Agency’s current proposed changes to the Scheduling Letter and Itemized Listing eclipse the 2014 addendums.
Just a few of the proposed changes include:
- Item 19 (new) Documentation of policies and practices regarding all employment recruiting, screening, and hiring mechanisms, including the use of artificial intelligence, algorithms, automated systems or other technology-based selection procedures. (emphasis added)
- Item 20(c)(previously Item 18)Promotions: For each job group or job title, provide the total number of promotions by gender and race/ethnicity, and identify whether each promotion was competitive or non-competitive. Provide documentation that includes established policies and describes practices related to promotions in the submission. Also include the previous supervisor, current supervisor, previous compensation, current compensation, department, job group, and job title from which and to which the person(s) was promoted. (emphasis added)
- (new Item 20(d)(previously Item 18)Terminations: For each job group or job title, provide the total number of employee terminations, broken down by reason(s) for termination (e.g., retirement, resignation, conduct, etc.) including gender and race/ethnicity information for each. When presenting terminations by job title, also include the department and job group from which the person(s) terminated. emphasis added)
With respect to compensation, OFCCP is proposing several substantial modifications and additions, including a requirement mirroring the requirements set forth in the Agency’s recent Compensation Directive 2022-01.
- Item 21 (previously Item 19) Employee level compensation data for all employees (including but not limited to full-time, part-time, contract, per diem or day labor, and temporary employees, including those provided by staffing agencies) as of (1) the date of the organizational display or workforce analysis and (2) as of the date of the prior year’s organizational display or workforce analysis. (emphasis added)
- Item 22 (new) Documentation that the contractor has satisfied its obligation to evaluate its “compensation system(s) to determine whether there are gender-, race-, or ethnicity-based disparities,” as part of the contractor’s “in-depth analyses of its total employment process” required by 41 CFR 60-2.17(b)(3). Include documentation that demonstrates at least the following:
- When the compensation analysis was completed;
- The number of employees the compensation analysis included and the number and categories of employees the compensation analysis excluded;
- Which forms of compensation were analyzed and, where applicable, how the different forms of compensation were separated or combined for analysis (e.g., base pay alone, base pay combined with bonuses, etc.);
- That compensation was analyzed by gender, race, and ethnicity; and
- The method of analysis employed by the contractor (e.g., multiple regression analysis, decomposition regression analysis, meta-analytic tests of z-scores, compa-ratio regression analysis, rank-sums tests, career-stall analysis, average pay ratio, cohort analysis, etc.).
The above are just a few of the highlights of the proposed changes. We are continuing to digest all of the proposed changes to the Scheduling Letter and Itemized Listing as well as the supporting statement and will be back soon with additional insights.