U.S. Department of Labor Issues New Opinion Letter Regarding Office of Federal Contract Compliance Programs’ Pay Groups

WASHINGTON, DC - The U.S. Department of Labor announced today that it has issued a new opinion letter that addresses obtaining assistance and working collaboratively with the Office of Federal Contract Compliance Programs (OFCCP) when developing pay analysis groups for conducting compensation analyses.

An opinion letter is an official, written opinion by the Department's OFCCP on how Agency guidance and regulations apply in specific circumstances presented by the individual person or entity that requested the letter.

The opinion letter issued today is OFCCP 2019-02 on Pay Analysis Groups. The new opinion letter follows OFCCP's Directive 2018-05, which provides guidance as to how a company would formulate similarly situated employee groups, generally referred to as pay analysis groups or "PAGs" by the Agency, in order to systemically assess a contractor's pay system for potential discrimination. The opinion letter discusses how contractors can provide proposed PAGs to the Agency in advance, and receive helpful feedback from the Agency as to those PAGs.

"The U.S. Department of Labor believes opinion letters are an important way to provide guidance in response to specific inquiries, that can provide useful information to workers and the regulated community," said Acting Secretary of Labor Patrick Pizzella.  "This guidance will benefit both workers and contractors as it will help contractors to correctly analyze their pay systems."

"This opinion letter summarizes how OFCCP analyzes a contractor's compensation system and further informs contractors that the agency is available to provide direct feedback as part of its compliance assistance role in how a contractor groups employees to analyze their pay," said OFCCP Director Craig E. Leen.

The Department encourages the public to submit requests for opinion letters to OFCCP to obtain an opinion or to determine whether existing guidance already addresses their questions. OFCCP exercises its discretion in determining whether and how it will respond to each request.

OFCCP promotes diversity and enforces the law. OFCCP holds those who do business with the federal government (contractors and subcontractors) responsible for complying with the legal requirement to take affirmative action and not discriminate on the basis of race, color, sex, sexual orientation, gender identity, religion, national origin, disability, or status as a protected veteran. In addition, contractors and subcontractors are prohibited from discharging or otherwise discriminating against applicants or employees who inquire about, discuss or disclose their compensation or that of others, subject to certain limitations.