The period for public comment on the Office of Federal Contract Compliance Programs' (OFCCP) proposed internal pay discrimination standards and guidelines for contractor self-analysis is now closed. In a statement made early last year by the Director of the OFCCP, Charles James, he described the OFCCP approach to compensation audits as like "taking a knife to a gun fight" and vowed to do something about it. He began hiring experts and in November of 2004 published two Federal Register notices — not regulations — describing the agency's proposed internal standards and contractor self-evaluation guidelines. As a consultant in our office remarked, "he's now planning to bring a Howitzer to the gun fight."

Not all EEO/AA experts agree with Mr. James' solutions. Ellen Shong Bergman, a former OFCCP Director herself, in referring to the agency's former Pay Grade Analysis (or DuBray Analysis) quipped that "two years ago the OFCCP jumped on a train that was on the wrong track." In her estimation, the agency has simply assumed that it just needed to switch tracks and its choice of multiple regression analysis "is surely not the only — and may not even be the best — way to statistically analyze compensation."

The statisticians from the Peopleclick Research Institute (PRI) argue that the published initiatives fail to examine pay-setting decisions under the theory of disparate treatment discrimination or to provide for groups that would allow analysis of current pay rates under the Equal Pay Act of 1963. PRI's comments are available online at www.eeosource.com/news/11805.asp.

Most groups representing contractors, such as the Equal Employment Advisory Council (EEAC), the American Bankers Association (ABA), and the Society of Human Resource Management (SHRM), commented negatively on the burden, cost, confidentiality issues, and risk of liability involved in conducting the proposed self-analysis — in addition to questioning multiple regression as the only means of analysis available to contractors. You can see the comments from these organizations at:

  EEAC   www.eeac.org/comments/detail.asp?Agency=OFCCP
  ABA   www.aba.com/Industry+Issues/RecentCommentLetters.htm
  SHRM (membership required)     www.shrm.org/government/regulatory_published/ManagementPracticesTOC.asp

Some consulting firms have already (and in our opinion prematurely) held multiple regression training sessions advising employers how to comply with these "guidelines." A word of caution: at this point, the OFCCP notice represents proposed guidelines and we suggest that contractors refrain from jumping to conclusions about the implications to their systems and compliance. However, if you are interested in exploring what changes to your in-house systems and record keeping practices will be necessary should these guidelines become widely accepted or formally adopted, please give us a call. We'll be happy to have that discussion with you.

Maly Consulting's public comment letters to the OFCCP are on our website at www.malyconsulting.com/PressRoom/#Letters.