August 18, 2022
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The Office of Federal Contract Compliance Programs (OFCCP) revised its requirement that federal contractors disclose internal pay equity audits. On March 15, 2022, the OFCCP issued a directive clarifying a regulatory requirement that qualified contractors must implement an equal employment opportunity and affirmative action program which includes an evaluation of whether and where gender, race, or ethnicity-based pay disparities exist. The directive also stated the OFCCP could access internal pay equity audits including those protected by attorney-client or work product privilege during a compliance review. This interpretation was heavily criticized.
In a response to the criticism, the OFCCP clarified production of pay equity analyses and related communication protected under attorney work-product and attorney-client privilege will not be required. However, federal contractors must do more than just assert a blanket privilege. The alternatives for compliance are to: 1) produce a redacted version of its compensation analysis; 2) conduct a separate analysis during the relevant Affirmative Action Plan period that does not implicate privilege concerns; or 3) generate a detailed affidavit that sets forth the required compliance but does not contain privileged material. Additionally, the following information is not considered privileged: 1) when the compensation analysis was completed; 2) the number of employees the compensation analysis included and the number and categories of employees the compensation analysis excluded; 3) which forms of compensation were analyzed and, where applicable, how the different forms of compensation were separated or combined for analysis; 4) that compensation was analyzed by gender, race, and ethnicity; and 5) the method of analysis employed by the contractor. Employers concerned about disclosure of their attorney-client or work product privileges should consult with their legal counsel as soon as they are aware of an OFCCP compliance review.
- Review pay equity audit disclosure requirements with legal counsel.
- Implement process for alternative production to meet compliance requirements.
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