OFCCP Issues NEW Compensation Directive and Rescinds Compensation Standards and Voluntary Guidelines

The Office of Federal Contract Compliance Programs (OFCCP) announced today that effective February 28, 2013, it has rescinded the 2006 Compensation Standards (Standards) and Voluntary Guidelines. In the Notice of Final Rescission, OFCCP stated that it does not intend to replace the Standards with a formal rule. Instead, the agency suggests that employers should rely on a host of other non-regulatory materials (such as compliance manuals, trainings, and directives) for guidance on how to prepare pay analyses and respond to pay investigations.

OFCCP has published some of this new guidance under Directive No. 307. OFCCP says that it will follow Title VII’s flexible, fact-specific approach to enforce and investigate pay.

This new case-by-case approach will allow the OFCCP to continue to use a range of tools, both investigative and analytical, that compliance officers have been using for several years now. The key, however, is that now, this gives some structure to what compliance officers have been doing for years. Hold on to your hats, it’s going to be a wild ride!