OFCCP Pay Equity Audit Directive Released Today

The OFCCP reiterated its commitment to enforcing pay equity compliance today with the release of Directive 2022-01: Pay Equity Audits. This directive emphasized that the OFCCP will request evidence that companies have conducted their required compensation analyses in desk audits pursuant to the regulations at 41 CFR 60-2.17(b)(3), which require an annual evaluation of:

“Compensation system(s) to determine whether there are gender-, race-, or ethnicity-based disparities”.

The directive explicitly states that the

“OFCCP will request that the contractor provide a complete copy of the pay equity audit(s) conducted pursuant to 2.17(b)(3) that shows all pay groupings that were evaluated, any variables used, and the results of the analyses, including any disparities found.”

It is imperative to understand that 1) an analysis is required and 2) running an analysis is only the first step if you have any disparities that are discovered by that analysis. Disparities must be investigated to determine the reason for the pay differences. If the difference is not based on legitimate, non-discriminatory reasons, it must be remedied.

Kairos’ OFCCP Compensation Analyses are designed to highlight issues OFCCP would find in a desk audit of your company’s Affirmative Action Plan’s job groups and job titles – and more – highlighting intersectional race/ethnicity and gender disparities. Our reports provide tools to enhance your review as well as insights into explanatory factors that may be driving disparities. Take the first step to reducing your risk in an audit by conducting a Kairos compensation analysis specifically designed for OFCCP compliance.