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A proposed rule by the U.S. Department of Labor (DOL) would for the first time require many federal contractors and subcontractors to submit annual equal pay reports providing summary data on their employee compensation to the DOL’s Office of Federal Contract Compliance Programs (OFCCP).

The proposal has been in development for several years and follows an April 2014 presidential memorandum directing the OFCCP to change its regulations implementing Executive Order 11246, which prohibits federal contractors from engaging in discrimination based on race or gender, among other protected classes.

Under the proposal, companies that file EEO-1 reports with the federal government, have more than 100 employees and hold federal contracts or subcontracts worth at least $50,000 would have to submit to the OFCCP summary pay data on their workforces broken out by race, gender, ethnicity and other relevant data points such as job categories, hours worked and the number of employees.

More than 116,000 contractors would be subject to the rule’s reporting requirements. The OFCCP says the reports would help all federal contractors assess their pay practices and policies and make any necessary pay adjustments or other modifications. Several business groups, including Associated Builders and Contractors, have expressed concerns that the proposed data collection duplicates EEO reporting requirements already in place for most federal contractors.

In addition, stakeholders have questioned the usefulness of the data the OFCCP will use to determine which contractors to audit, and whether the average compensation data will accurately reflect the industry’s various administrative and management job categories across multiple markets.

The proposed rule will be open for public comment until Nov. 6. Comments (identified by the RIN number 1250-AA03) may be submitted via www.regulations.gov.

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