Recordkeeping Best Practices
Summary of the Issue
Federal contractors are required to maintain certain records related to compensation decisions in order to comply with relevant laws and regulations. These records can include information such as the applicant’s qualifications and the reasons for any compensation decisions, as well as any other relevant information related to the compensation process. Additionally, federal contractors are required to retain records of all compensation decisions for a certain period of time, typically for at least two years. This can help to provide a record of the decision-making process and ensure that any potential issues or concerns can be properly addressed. Overall, federal contractors should maintain detailed records of all compensation decisions to ensure compliance with relevant laws and regulations and prevent potential legal and financial risks.
To prepare for an OFCCP compensation audit, you should first familiarize yourself with the OFCCP’s regulations and guidelines for compensation practices. This will help you to understand the specific requirements that you need to meet in order to be in compliance. You should also conduct a thorough review of your company’s compensation practices to identify any potential areas of non-compliance. This can include reviewing job descriptions, salary ranges, and other relevant information to ensure that your practices are in compliance with the OFCCP’s requirements.
OFCCP Compensation Analysis
To audit your compensation systems, you may want to consider the following steps:
- Review your pay practices: Make sure that your pay practices are fair, consistent, and nondiscriminatory, and that they do not result in unequal pay for workers who perform the same or similar tasks.
- Evaluate your job classification system: Ensure that your job classification system is objective, fair, and based on job-related factors, such as skill, experience, education, and responsibility, rather than on personal characteristics that are not job-related.
- Consider pay equity: Examine your compensation data to identify any potential pay disparities based on race, gender, or other protected characteristics, and take steps to address any disparities that are found.
- Review your pay transparency policies: Ensure that your pay transparency policies are clear, consistent, and in compliance with relevant laws, such as the Equal Pay Act (EPA) and the National Labor Relations Act (NLRA).
- Keep records: Keep detailed records of your compensation systems, including job descriptions, pay rates, and pay equity analyses, to demonstrate compliance with relevant laws and regulations.
Finally, you should work with a knowledgeable and experienced compliance professional who can help you prepare for the audit and ensure that your company is in compliance with the OFCCP’s requirements. Kairos’ OFCCP Compensation Analysis is designed to highlight issues OFCCP would find in an audit of your company’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. Another benefit of an OFCCP compensation analysis is that you’ll gain a better understanding of how the OFCCP thinks and works as well as their priorities when auditing a business. This will, in turn, help you prioritize your business’s efforts or make the necessary changes to minimize surprises during the audit and to ensure your employees are being paid fairly.