Small Businesses Not Included in Proposed Reporting Requirement for Government Contractors

The Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) has issued a notice of proposed rulemaking that would require certain government contractors to submit an Equal Pay Report to the government as a supplement to the Employer Information Report (EEO-1) that is already required.

If a final rule is adopted as proposed, the Equal Pay Report will require companies to report the number of workers within each EEO-1 job category, the total W-2 wages of all workers in each job category, and the number of hours worked by all workers in each job category, all broken down by race, ethnicity, and sex. Only aggregate information will be reported; no information regarding individual wages will be required. In addition, the reports will not include any information on worker qualifications or experience that might help explain any differences among the groups within a job category.

Small Businesses Excluded

Small businesses — those with fewer than 100 employees — are excluded from the new reporting requirements. In addition the new reporting requirements apply only to companies that hold a contract, subcontract, or purchase order with the Federal government that, including modifications, covers a period of more than 30 days and is worth at least $50,000.

Purpose of the New Reporting Requirement

According to the Department of Labor, working women earn only 77% of the wages earned by working men, and the gap is even greater for African American women and Latinas. The new reporting requirement is intended to address that situation in two ways: First, it will provide the Department of Labor with a source of information to facilitate enforcement actions against government contractors who violate equal pay regulations. However, enforcement actions will not be based solely on the reported information. Instead, the agency will use the information in targeting and prioritizing its enforcement actions. Second, the Department of Labor will use the reports to compile and issue summary data to assist government contractors with their own internal compliance programs.

Where the Proposed Rule fits in the Rulemaking Process

The notice of proposed rulemaking, or NPRM, was published in the Federal Register on August 8, 2014. (Generally, the NPRM is the first official step in the creation of an administrative rule or regulation, but sometimes it is preceded by an advance notice of proposed rulemaking, or ANPRM.) This NPRM has a 90-day comment period, which means that Department of Labor will accept written comments from the public until November 6, 2014. The NPRM contains not only the proposed regulatory language that, if adopted, would be placed into the Code of Federal Regulations, it also includes an extensive preamble with an executive summary, a discussion of the background of the proposed rulemaking, a section-by-section discussion of the proposed rule, and an analysis of other factors, including the need for the regulation and the anticipated costs of the proposed rule.

Once the comment period closes, the agency will analyze all the comments submitted by the public and, probably, issue a final rule by publishing it in the Federal Register. The notice of the final rule will include the language of the final regulation as well as a preamble that usually includes a summary of the comments recieved from the public and the agency’s response to those comments.

How to Submit Comments

If you would like to submit your own comments on the NPRM for the Equal Pay Report, you may do so by any of the following means:

  • You may submit them online at the Federal rulemaking portal, http://www.regulations.gov.
  • If your comments consist of six pages or less, you may fax them to (202) 693-1313.
  • You may mail them to Debra A. Carr, Director, Division of Policy and Program Development, Office of Federal Contract Compliance Programs, Room C-3325, 200 Constitution Avenue, N.W., Washington, D.C. 20210.

Note that the comments must be received (not merely postmarked) by November 6, 2014. You may view comments submitted by others here.

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