Last week, the Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) issued a Notice seeking a final round of comments to its proposal to make major changes to the way federal contractors respond to affirmative action plan audits. If implemented, the changes would require companies selected for random audits to provide extensive compensation data in digital form to OFCCP. OFCCP would use this data to determine if compensation disparities based on race or gender justify a more intensive review.

According to the proposed policy, disparities as small as two percent or $2000 between arguably similarly situated employees could trigger a compensation audit. Federal contractors have objected to the new rules on multiple grounds. Many contend that the upfront compensation data requirement is overly burdensome, especially for relatively small employers. Others have expressed concern over the security of their compensation information, and the ability of outside parties to access this data through a FOIA request.

Once the final comments are received, the new rules must complete Office of Management and Budget review before becoming final. The new compensation review requirements could be in place for contractors that receive fiscal year 2012 audit scheduling letters.