When I arrived at the Department of Labor’s Office of Federal Contract Compliance Programs in the fall of 2009, I made improving our efforts to eliminate pay discrimination one of my primary goals. The first step has been to close gaps in our enforcement practices and ensure that we protect workers to the fullest extent of the law.
On Tuesday, I announced an important milestone in closing those gaps, which is effective today. We are rescinding two enforcement guidance documents on pay discrimination from 2006 known as the “Compensation Standards” and “Voluntary Guidelines” because they limited OFCCP’s ability to conduct full investigations and use every enforcement tool at its disposal to combat pay discrimination. We are also aligning OFCCP’s analysis of pay discrimination with the principles used to enforce the main federal law against employment discrimination: Title VII of the Civil Rights Act of 1964, which prohibits employers from discriminating against any individual because of race, color, religion, sex or national origin. We are guided by these principles in all other areas where OFCCP reviews contractor compliance under Executive Order 11246 (such as hiring, promotion or termination).
I also announced new guidance for employers and other interested stakeholders, as well the procedures, analysis and protocols OFCCP will use when conducting compensation discrimination investigations going forward.
Equal pay for women is a critical issue for workers and their families, and a cornerstone of OFCCP’s equal employment enforcement activities. Pay discrimination can be relatively easy to identify, like a clear pattern of paying women less than men in the same job despite being just as qualified. But it can also be complex, like a practice of discriminating against African-American sales workers in handing out territory assignments, so no matter how well they perform they don’t have equal opportunity when it comes to pay. Until today, the existing rules hampered our efforts to take this kind of nuanced approach.
Under the 2006 guidance, OFCCP investigators were forced to apply a narrowly defined, cookie-cutter approach to evaluating contractor pay practices. Investigators looked at each case the same way, regardless of the industry, types of jobs or pay practices. These restrictions prevented us from detecting evidence of illegal pay discrimination. They also conflicted with the basic principles of Title VII. OFCCP has now lifted these arbitrary barriers, bringing our enforcement approach in line with how courts and other federal agencies apply Title VII.
In taking this step, I am committed to facilitating success for federal contractors and subcontractors. In our Notice of Rescission and in a companion Compensation Directive released Tuesday, we are improving and clarifying OFCCP’s compensation investigation procedures and protocols. This responds directly to what I heard from the contractor community. They asked, quite reasonably, that if we rescinded the old guidance, we also provide clarity on how we would evaluate their compliance.
We also created a new resource page on our website, where contractors can find new compliance assistance materials. We will continue to update and expand this resource page going forward. We hope contractors will use this information to review their own policies and practices, and improve voluntary compliance.
Since I arrived, OFCCP has closed more than 70 compliance evaluations with financial settlements remedying pay discrimination on the bases of gender and race. Through those efforts, OFCCP recovered more than $2.3 million in back pay and salary adjustments for more than 800 workers. But we can do more – much more.
The pay gap costs individual women thousands of dollars in lost pay each year – and hundreds of thousands across their working lifetimes. Our new guidance closes an enforcement gap that has prevented us from doing all we can to help workers get paid fairly without discrimination. And it advances our efforts toward closing the pay gap once and for all.
Patricia Shiu is the director of the Labor Department’s Office of Federal Contract Compliance Programs.