Interpretive Standards for Systemic Compensation Discrimination and Voluntary Guidelines for Self-Evaluation of Compensation Practices Under Executive Order 11246; Notice of Proposed Rescission, 62-64 [2010-32602]

Download as PDF 62 Federal Register / Vol. 76, No. 1 / Monday, January 3, 2011 / Proposed Rules * * * * * (h) Soliciting under permit. (1) The inperson soliciting or demanding gifts, money, goods or services is prohibited, unless it occurs as part of a permit issued for a demonstration or special event. (2) Persons permitted to solicit must not: (i) Give false or misleading information regarding their purposes or affiliations; (ii) Give false or misleading information whether any item is available without donation. * * * * * Dated: December 22, 2010. Thomas L. Strickland, Assistant Secretary for Fish and Wildlife and Parks. [FR Doc. 2010–33071 Filed 12–30–10; 8:45 am] BILLING CODE 4312–52–P DEPARTMENT OF LABOR Office of Federal Contract Compliance Programs 41 CFR Parts 60–1 and 60–2 RIN 1250–ZA00 Interpretive Standards for Systemic Compensation Discrimination and Voluntary Guidelines for SelfEvaluation of Compensation Practices Under Executive Order 11246; Notice of Proposed Rescission srobinson on DSKHWCL6B1PROD with PROPOSALS AGENCY: Office of Federal Contract Compliance Programs, Labor. ACTION: Notice of proposed rescission. SUMMARY: The Office of Federal Contract Compliance Programs (OFCCP) is proposing to rescind two guidance documents addressing compensation discrimination: Interpreting Nondiscrimination Requirements of Executive Order 11246 with respect to Systemic Compensation Discrimination (Standards) and Voluntary Guidelines for Self-Evaluation of Compensation Practices for Compliance with Executive Order 11246 with respect to Systemic Compensation Discrimination (Voluntary Guidelines). OFCCP is proposing to rescind the Standards which have limited OFCCP’s ability to effectively investigate, analyze and identify compensation discrimination. In so doing, OFCCP will continue to adhere to the principles of Title VII of the Civil Rights Act of 1964, as amended (Title VII) in investigating compensation discrimination and will reinstitute flexibility in its use of investigative approaches and tools. OFCCP also VerDate Mar<15>2010 19:10 Dec 30, 2010 Jkt 223001 proposes to establish procedures for investigating compensation discrimination through the traditional means of using its compliance manual, directives and other staff guidance. OFCCP is proposing to rescind the Voluntary Guidelines because they are largely unused by the Federal Government contracting community and have not been an effective enforcement strategy. DATES: Comments must be received on or before March 4, 2011. ADDRESSES: You may submit comments, identified by number 1250–ZNE, by any of the following methods: • Federal eRulemaking Portal: http:// www.regulations.gov. Follow the instructions for submitting comments. • Fax: (202) 693–1304 (for comments of 6 pages or fewer). • Mail: Director, Division of Policy, Planning, and Program Development, Office of Federal Contract Compliance Programs, Room N3422, 200 Constitution Avenue, NW., Washington, DC 20210. Receipt of submissions will not be acknowledged; however, the sender may request confirmation that a submission has been received by telephoning OFCCP at (202) 693–0102 (voice) or (202) 693–1337 (TTY) (these are not tollfree numbers). All comments received, including any personal information provided, will be available online at http:// www.regulations.gov and for public inspection during normal business hours at Room C3325, 200 Constitution Avenue, NW., Washington, DC 20210. Individuals needing assistance to review comments will be provided with appropriate aids such as readers or print magnifiers. Copies of this Notice of Proposed Rescission will be made available in the following formats: Large print; Braille; electronic file on computer disk; and audiotape. To schedule an appointment to review the comments and/or to obtain this Notice of Proposed Rescission in an alternate format, contact OFCCP at the telephone numbers or address listed above. FOR FURTHER INFORMATION CONTACT: Director, Division of Policy, Planning, and Program Development, Office of Federal Contract Compliance Programs, 200 Constitution Avenue, NW., Room N3422, Washington, DC 20210. Telephone: (202) 693–0102 (voice) or (202) 693–1337 (TTY). SUPPLEMENTARY INFORMATION: I. Background The Department of Labor’s OFCCP enforces Executive Order 11246 which requires Federal Government PO 00000 Frm 00035 Fmt 4702 Sfmt 4702 contractors and subcontractors to provide equal employment opportunity through affirmative action and nondiscrimination based on race, color, national origin, religion, or sex. Compensation discrimination is one form of discrimination prohibited by the Executive Order. OFCCP enforces contractors’ compliance with this obligation primarily by conducting compliance evaluations. (See 41 CFR 60–1.20.) OFCCP’s longstanding policy is to follow Title VII principles when conducting analyses of potential discrimination under Executive Order 11246, including compensation discrimination. Compensation discrimination may occur on an individual basis, or systemically, that is, it is widespread in an organization due to discriminatory compensation systems. OFCCP traditionally has established procedures for investigating compensation discrimination, as well as other forms of discrimination, through instructions for its compliance officers contained in the OFCCP Federal Contract Compliance Manual (FCCM), directives and other staff guidance materials. Identifying and remedying compensation discrimination has been an important part of OFCCP compliance efforts for many years. Concerns about compensation discrimination led OFCCP in Calendar Year (CY) 2000 to begin requiring contractors to submit compensation data requested in the scheduling letter at the outset of a compliance evaluation as a matter of course and as part of the data reported in a new Equal Opportunity Survey, which covered contractors were required to submit to OFCCP. (The Scheduling Letter was approved under the Paperwork Reduction Act OMB NO. 1215–0072; see 65 FR 68022, 68036 (November 13, 2000) for the notice regarding the Equal Opportunity Survey.) In CY 2000, OFCCP also began requiring contractors to proactively conduct in-depth analyses of their compensation systems to ensure that those systems were not discriminatory. (See 41 CFR 60–2.17(b)(3).) OFCCP changed its approach to investigating compensation discrimination in 2006. On June 16, 2006, OFCCP published in the Federal Register two final guidance documents related to identifying compensation discrimination under Executive Order 11246 that contained interpretations of OFCCP regulations and Title VII principles: Interpreting Nondiscrimination Requirements of Executive Order 11246 with respect to Systemic Compensation Discrimination E:\FR\FM\03JAP1.SGM 03JAP1 srobinson on DSKHWCL6B1PROD with PROPOSALS Federal Register / Vol. 76, No. 1 / Monday, January 3, 2011 / Proposed Rules (Standards) and Voluntary Guidelines for Self-Evaluation of Compensation Practices for Compliance with Executive Order 11246 with respect to Systemic Compensation Discrimination (Voluntary Guidelines). (See 71 FR 35124 (June 16, 2006) for the Standards and 71 FR 35114 (June 16, 2006) for the Voluntary Guidelines.) Further, OFCCP rescinded the Equal Opportunity Survey in 2006. (See 71 FR 53032 (September 8, 2006).) The Standards set forth a new, rigid procedure for investigating and analyzing systemic compensation discrimination cases. Systemic compensation discrimination is defined as discrimination under a pattern or practice of disparate treatment. (See 71 FR at 35140.) The Standards prescribe procedures to be followed by OFCCP compliance officers when conducting investigations of systemic compensation discrimination in all cases, including how to group employees whose compensation is to be compared in a discrimination analysis, requiring anecdotal evidence of compensation discrimination except in unusual cases, and requiring the use of multiple regression analysis when deciding whether wage differences between groups are discriminatory. These procedures are to be followed regardless of the facts of a particular case. The rigidity of the Standards represents a significant departure from OFCCP’s traditional tailoring of compensation investigation and analytical procedures to the facts of the case based on Title VII principles. Investigations of systemic compensation discrimination are complex and nuanced. During the conduct of compliance evaluations, OFCCP has traditionally focused on identifying compensation discrimination through the development of a variety of investigative and analytical tools. The use of a particular tool, or combination of tools, depends upon the facts of a specific case, and includes consulting with labor economists and other experts, as appropriate. The Standards also significantly limit OFCCP’s ability to identify compensation discrimination by imposing overly narrow investigation procedures that go beyond what would be required under Title VII principles in litigation. For example, the Standards state that, except in unusual cases, OFCCP will not issue a notice of violation (NOV) without providing anecdotal evidence to support OFCCP’s statistical analysis. But under Title VII, a pattern or practice class-wide disparate treatment case may be proven by statistics. See, e.g., Int’l Brotherhood VerDate Mar<15>2010 19:10 Dec 30, 2010 Jkt 223001 of Teamsters v. United States, 431 U.S. 324, 339–40 (1977); Palmer v. Shultz, 815 F.2d 84, 90–91 (DC Cir. 1987). Cf. OFCCP v. Greenwood Mills, Inc., No. 89–OFC–39, Decision and Order of Remand, slip op. at 14 (Sec’y of Labor Nov. 20, 1995); OFCCP v. Jacksonville Shipyards, 89–OFC–1, Decision and Remand Order, slip op. at 5 (Sec’y of Labor May 9, 1995). Moreover, requiring anecdotal evidence is particularly problematic in compensation cases as employees often are unaware of the compensation received by co-workers and, as a result, anecdotal evidence from victims of pay discrimination may not exist. The Standard’s mandate to use a multiple regression analysis to identify compensation discrimination is also overly narrow and is not required under Title VII principles. While a multiple regression analysis may be a useful tool in identifying compensation discrimination, other statistical or nonstatistical analyses may be better suited, depending on the facts of the case. In short, we now believe the Standards significantly undermine OFCCP’s ability to vigorously investigate and identify compensation discrimination. The Voluntary Guidelines establish procedures that contractors can elect to use in conducting the self-analysis of their pay practices required by 41 CFR 60–2.17(b)(3). As an incentive to encourage contractors to use the analytical procedures contained in the Voluntary Guidelines, OFCCP would deem a contractor, whose selfevaluation ‘‘reasonably meets’’ the procedures outlined in the Voluntary Guidelines, to be in compliance with section 60–2.17(b)(3) and would coordinate OFCCP’s review of the contractor’s compensation practices during a compliance evaluation in the manner specified in the Voluntary Guidelines. (See 71 FR at 35122.) In OFCCP’s experience since 2006, contractors have rarely utilized the analytical procedures outlined in the Voluntary Guidelines when analyzing their compensation practices under section 60–2.17(b)(3). Additionally, the analytical model set forth in the Voluntary Guidelines suffers from many of the same flaws as the investigative procedures prescribed by the Standards. For example, the Voluntary Guidelines established certain rigid numerical thresholds by which the similarly situated employee groupings are to be analyzed. OFCCP believes that for some contractors, these thresholds may be exceedingly difficult to meet. PO 00000 Frm 00036 Fmt 4702 Sfmt 4702 63 II. Proposal OFCCP proposes to rescind the Standards and the Voluntary Guidelines in their entirety. OFCCP believes it is unnecessary to issue new Federal Register notices articulating its interpretations of Title VII principles related to compensation discrimination. OFCCP will continue to follow Title VII principles in investigating and analyzing compensation discrimination and in interpreting regulations related to compensation discrimination. The agency is proposing to normalize its treatment of those cases with other types of OFCCP discrimination investigations. Once rescinded, nothing in the Standards or the Voluntary Guidelines or their preambles could be relied upon as a statement of OFCCP’s interpretation of Title VII principles or OFCCP regulations. If the Standards are rescinded, OFCCP will reinstitute the practice of exercising its discretion to develop compensation discrimination investigation procedures in the same manner it develops other investigation procedures. OFCCP will continually refine those procedures to ensure that they are as effective and efficient as possible. OFCCP will develop and issue compensation investigation procedures in the same manner as procedures for investigating other forms of discrimination, for example through the FCCM, directives and staff guidance materials. As mentioned above, OFCCP has found that contractors rarely use the analytical procedure suggested in the Voluntary Guidelines for conducting the compensation analyses required by section 60–2.17(b)(3). In the few instances when contractors have conducted their compensation analysis in the manner suggested in the Voluntary Guidelines, the coordination procedures of the Voluntary Guidelines have not proved to be an efficient method for verifying that the contractor’s compensation system is not discriminatory. The agency has concluded that the Voluntary Guidelines have not proved to be either an effective vehicle for providing guidance about how to conduct the analyses required by section 60– 2.17(b)(3) or an effective incentive for contractors to conduct the analysis in the manner described in the Voluntary Guidelines. In the absence of the Voluntary Guidelines, contractors will still be obligated to conduct self-evaluations of compensation practices as required by 41 CFR 60–2.17(b)(3). OFCCP will continue to provide any needed compliance assistance on section 60– E:\FR\FM\03JAP1.SGM 03JAP1 64 Federal Register / Vol. 76, No. 1 / Monday, January 3, 2011 / Proposed Rules 2.17(b)(3) through various means, including webinars and the Web site distribution of Frequently Asked Questions as appropriate, rather than through the issuance of a Federal Register notice. OFCCP invites any interested party to comment on the proposal to rescind the Standards and the Voluntary Guidelines. Patricia A. Shiu, Director, Office of Federal Contract Compliance Programs. [FR Doc. 2010–32602 Filed 12–30–10; 8:45 am] BILLING CODE 4510–45–P DEPARTMENT OF TRANSPORTATION Federal Railroad Administration 49 CFR Part 228 [Docket No. FRA–2009–0042] RIN 2130–AC13 Safety and Health Requirements Related to Camp Cars srobinson on DSKHWCL6B1PROD with PROPOSALS AGENCY: Federal Railroad Administration (FRA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: To carry out a 2008 Congressional rulemaking mandate, FRA is proposing to create regulations prescribing minimum safety and health requirements for camp cars that a railroad provides as sleeping quarters to any of its train employees, signal employees, and dispatching service employees and individuals employed to maintain its right of way. The proposed regulations would supplant existing guidelines that interpret existing statutory requirements, enacted decades earlier, that railroad-provided camp cars be clean, safe, and sanitary, and afford those employees and individuals an opportunity for rest free from the interruptions caused by noise under the control of the railroad. In further response to the rulemaking mandate, the proposed regulations would include the additional statutory requirements, enacted in 2008, that camp cars be provided with indoor toilets, potable water, and other features to protect the health of such workers. Under separate but related statutory authority, FRA is proposing to amend regulations on construction of employee sleeping quarters. In particular, FRA proposes to implement a 2008 statutory amendment that, on and after December 31, 2009, camp cars provided by a VerDate Mar<15>2010 19:10 Dec 30, 2010 Jkt 223001 railroad as sleeping quarters exclusively for individuals employed to maintain the right of way of a railroad are within the scope of the prohibition against beginning construction or reconstruction of employee sleeping quarters near railroad switching or humping of hazardous material. FRA’s existing guidelines with respect to the location, in relation to switching or humping of hazardous material, of a camp car that is occupied exclusively by individuals employed to maintain a railroad’s right of way would be replaced with regulatory amendments prohibiting a railroad from positioning such a camp car in the immediate vicinity of the switching or humping of hazardous material. Finally, FRA would make conforming changes, clarify a provision on applicability, remove an existing provision on preemptive effect as unnecessary, and move, without change, an existing provision on penalties for violation of FRA regulations. DATES: (1) Written comments must be received by March 4, 2011. Comments received after that date will be considered to the extent possible without incurring additional delay or expense. (2) FRA anticipates being able to resolve this rulemaking without a public hearing. However, if FRA receives a specific request for a public hearing prior to March 4, 2011, one will be scheduled, and FRA will publish a supplemental notice in the Federal Register to inform interested parties of the date, time, and location of any such hearing. ADDRESSES: Comments, which should be identified by Docket No. FRA–2009– 0042, may be submitted by any one of the following methods: • Fax: 1–202–493–2251; • Mail: U.S. Department of Transportation, Docket Operations, M– 30, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue, SE., Washington, DC 20590; • Hand Delivery: U.S. Department of Transportation, Docket Operations, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays; or • Electronically through the Federal eRulemaking Portal, http:// www.regulations.gov. Follow the online instructions for submitting comments. Instructions: All submissions must include the agency name, docket name, and docket number or Regulatory Identification Number (RIN) for this rulemaking. Note that all comments PO 00000 Frm 00037 Fmt 4702 Sfmt 4702 received will be posted without change to http://www.regulations.gov, including any personal information provided. Please see the Privacy Act section of this document. Docket: For access to the docket to read background documents or comments received, go to http:// www.regulations.gov at any time or to the U.S. Department of Transportation, Docket Operations, M–30, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: Alan Misiaszek, Certified Industrial Hygienist, Staff Director, Industrial Hygiene Division, Office of Safety Assurance and Compliance, Office of Railroad Safety, FRA, 1200 New Jersey Avenue, SE., Mail Stop 25, Washington, DC 20590 (telephone: (202) 493–6002), alan.misiaszek@dot.gov or Ann M. Landis, Trial Attorney, Office of Chief Counsel, FRA, 1200 New Jersey Avenue, SE., Mail Stop 10, Washington, DC 20590 (telephone: (202) 493–6064), ann.landis@dot.gov. SUPPLEMENTARY INFORMATION: I. Statutory, Regulatory, and Factual Background This proposal is being issued primarily to help satisfy the requirements of section 420 of the Rail Safety Improvement Act of 2008 (RSIA), Public Law 110–432, Div. A, 122 Stat. 4848, October 16, 2008 (amending a provision of the hours of service laws at 49 U.S.C. 21106). RSIA requires the Secretary of Transportation (Secretary) to adopt regulations no later than April 1, 2010 establishing minimum standards for ‘‘employee sleeping quarters’’ in the form of ‘‘camp cars’’ that are provided by railroads. 49 U.S.C. 21106(a)(1), (c). Specifically, RSIA instructs the Secretary to prescribe regulations ‘‘to implement [49 U.S.C. 21106(a)(1)] to protect the safety and health of any employees and individuals employed to maintain the right of way of a railroad carrier that use camp cars. * * * ’’ 49 U.S.C. 21106(c). The statutory term ‘‘employee’’ is defined in 49 U.S.C. 21101(3) to include a train employee, a signal employee, and a dispatching service employee, who as a group are sometimes referred to as ‘‘covered service employees.’’ As amended through 2008, 49 U.S.C. 21106(a)(1) provides that such camp cars must be— clean, safe, and sanitary, give those employees and individuals an opportunity for rest free from the interruptions caused by E:\FR\FM\03JAP1.SGM 03JAP1

Agencies

[Federal Register Volume 76, Number 1 (Monday, January 3, 2011)]
[Proposed Rules]
[Pages 62-64]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-32602]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF LABOR

Office of Federal Contract Compliance Programs

41 CFR Parts 60-1 and 60-2

RIN 1250-ZA00


Interpretive Standards for Systemic Compensation Discrimination 
and Voluntary Guidelines for Self-Evaluation of Compensation Practices 
Under Executive Order 11246; Notice of Proposed Rescission

AGENCY: Office of Federal Contract Compliance Programs, Labor.

ACTION: Notice of proposed rescission.

-----------------------------------------------------------------------

SUMMARY: The Office of Federal Contract Compliance Programs (OFCCP) is 
proposing to rescind two guidance documents addressing compensation 
discrimination: Interpreting Nondiscrimination Requirements of 
Executive Order 11246 with respect to Systemic Compensation 
Discrimination (Standards) and Voluntary Guidelines for Self-Evaluation 
of Compensation Practices for Compliance with Executive Order 11246 
with respect to Systemic Compensation Discrimination (Voluntary 
Guidelines). OFCCP is proposing to rescind the Standards which have 
limited OFCCP's ability to effectively investigate, analyze and 
identify compensation discrimination. In so doing, OFCCP will continue 
to adhere to the principles of Title VII of the Civil Rights Act of 
1964, as amended (Title VII) in investigating compensation 
discrimination and will reinstitute flexibility in its use of 
investigative approaches and tools. OFCCP also proposes to establish 
procedures for investigating compensation discrimination through the 
traditional means of using its compliance manual, directives and other 
staff guidance. OFCCP is proposing to rescind the Voluntary Guidelines 
because they are largely unused by the Federal Government contracting 
community and have not been an effective enforcement strategy.

DATES: Comments must be received on or before March 4, 2011.

ADDRESSES: You may submit comments, identified by number 1250-ZNE, by 
any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Fax: (202) 693-1304 (for comments of 6 pages or fewer).
     Mail: Director, Division of Policy, Planning, and Program 
Development, Office of Federal Contract Compliance Programs, Room 
N3422, 200 Constitution Avenue, NW., Washington, DC 20210.
    Receipt of submissions will not be acknowledged; however, the 
sender may request confirmation that a submission has been received by 
telephoning OFCCP at (202) 693-0102 (voice) or (202) 693-1337 (TTY) 
(these are not toll-free numbers).
    All comments received, including any personal information provided, 
will be available online at http://www.regulations.gov and for public 
inspection during normal business hours at Room C3325, 200 Constitution 
Avenue, NW., Washington, DC 20210. Individuals needing assistance to 
review comments will be provided with appropriate aids such as readers 
or print magnifiers. Copies of this Notice of Proposed Rescission will 
be made available in the following formats: Large print; Braille; 
electronic file on computer disk; and audiotape. To schedule an 
appointment to review the comments and/or to obtain this Notice of 
Proposed Rescission in an alternate format, contact OFCCP at the 
telephone numbers or address listed above.

FOR FURTHER INFORMATION CONTACT: Director, Division of Policy, 
Planning, and Program Development, Office of Federal Contract 
Compliance Programs, 200 Constitution Avenue, NW., Room N3422, 
Washington, DC 20210. Telephone: (202) 693-0102 (voice) or (202) 693-
1337 (TTY).

SUPPLEMENTARY INFORMATION:

I. Background

    The Department of Labor's OFCCP enforces Executive Order 11246 
which requires Federal Government contractors and subcontractors to 
provide equal employment opportunity through affirmative action and 
nondiscrimination based on race, color, national origin, religion, or 
sex. Compensation discrimination is one form of discrimination 
prohibited by the Executive Order.
    OFCCP enforces contractors' compliance with this obligation 
primarily by conducting compliance evaluations. (See 41 CFR 60-1.20.) 
OFCCP's longstanding policy is to follow Title VII principles when 
conducting analyses of potential discrimination under Executive Order 
11246, including compensation discrimination. Compensation 
discrimination may occur on an individual basis, or systemically, that 
is, it is widespread in an organization due to discriminatory 
compensation systems. OFCCP traditionally has established procedures 
for investigating compensation discrimination, as well as other forms 
of discrimination, through instructions for its compliance officers 
contained in the OFCCP Federal Contract Compliance Manual (FCCM), 
directives and other staff guidance materials.
    Identifying and remedying compensation discrimination has been an 
important part of OFCCP compliance efforts for many years. Concerns 
about compensation discrimination led OFCCP in Calendar Year (CY) 2000 
to begin requiring contractors to submit compensation data requested in 
the scheduling letter at the outset of a compliance evaluation as a 
matter of course and as part of the data reported in a new Equal 
Opportunity Survey, which covered contractors were required to submit 
to OFCCP. (The Scheduling Letter was approved under the Paperwork 
Reduction Act OMB NO. 1215-0072; see 65 FR 68022, 68036 (November 13, 
2000) for the notice regarding the Equal Opportunity Survey.) In CY 
2000, OFCCP also began requiring contractors to proactively conduct in-
depth analyses of their compensation systems to ensure that those 
systems were not discriminatory. (See 41 CFR 60-2.17(b)(3).)
    OFCCP changed its approach to investigating compensation 
discrimination in 2006. On June 16, 2006, OFCCP published in the 
Federal Register two final guidance documents related to identifying 
compensation discrimination under Executive Order 11246 that contained 
interpretations of OFCCP regulations and Title VII principles: 
Interpreting Nondiscrimination Requirements of Executive Order 11246 
with respect to Systemic Compensation Discrimination

[[Page 63]]

(Standards) and Voluntary Guidelines for Self-Evaluation of 
Compensation Practices for Compliance with Executive Order 11246 with 
respect to Systemic Compensation Discrimination (Voluntary Guidelines). 
(See 71 FR 35124 (June 16, 2006) for the Standards and 71 FR 35114 
(June 16, 2006) for the Voluntary Guidelines.) Further, OFCCP rescinded 
the Equal Opportunity Survey in 2006. (See 71 FR 53032 (September 8, 
2006).)
    The Standards set forth a new, rigid procedure for investigating 
and analyzing systemic compensation discrimination cases. Systemic 
compensation discrimination is defined as discrimination under a 
pattern or practice of disparate treatment. (See 71 FR at 35140.) The 
Standards prescribe procedures to be followed by OFCCP compliance 
officers when conducting investigations of systemic compensation 
discrimination in all cases, including how to group employees whose 
compensation is to be compared in a discrimination analysis, requiring 
anecdotal evidence of compensation discrimination except in unusual 
cases, and requiring the use of multiple regression analysis when 
deciding whether wage differences between groups are discriminatory. 
These procedures are to be followed regardless of the facts of a 
particular case. The rigidity of the Standards represents a significant 
departure from OFCCP's traditional tailoring of compensation 
investigation and analytical procedures to the facts of the case based 
on Title VII principles. Investigations of systemic compensation 
discrimination are complex and nuanced. During the conduct of 
compliance evaluations, OFCCP has traditionally focused on identifying 
compensation discrimination through the development of a variety of 
investigative and analytical tools. The use of a particular tool, or 
combination of tools, depends upon the facts of a specific case, and 
includes consulting with labor economists and other experts, as 
appropriate.
    The Standards also significantly limit OFCCP's ability to identify 
compensation discrimination by imposing overly narrow investigation 
procedures that go beyond what would be required under Title VII 
principles in litigation. For example, the Standards state that, except 
in unusual cases, OFCCP will not issue a notice of violation (NOV) 
without providing anecdotal evidence to support OFCCP's statistical 
analysis. But under Title VII, a pattern or practice class-wide 
disparate treatment case may be proven by statistics. See, e.g., Int'l 
Brotherhood of Teamsters v. United States, 431 U.S. 324, 339-40 (1977); 
Palmer v. Shultz, 815 F.2d 84, 90-91 (DC Cir. 1987). Cf. OFCCP v. 
Greenwood Mills, Inc., No. 89-OFC-39, Decision and Order of Remand, 
slip op. at 14 (Sec'y of Labor Nov. 20, 1995); OFCCP v. Jacksonville 
Shipyards, 89-OFC-1, Decision and Remand Order, slip op. at 5 (Sec'y of 
Labor May 9, 1995). Moreover, requiring anecdotal evidence is 
particularly problematic in compensation cases as employees often are 
unaware of the compensation received by co-workers and, as a result, 
anecdotal evidence from victims of pay discrimination may not exist.
    The Standard's mandate to use a multiple regression analysis to 
identify compensation discrimination is also overly narrow and is not 
required under Title VII principles. While a multiple regression 
analysis may be a useful tool in identifying compensation 
discrimination, other statistical or nonstatistical analyses may be 
better suited, depending on the facts of the case.
    In short, we now believe the Standards significantly undermine 
OFCCP's ability to vigorously investigate and identify compensation 
discrimination.
    The Voluntary Guidelines establish procedures that contractors can 
elect to use in conducting the self-analysis of their pay practices 
required by 41 CFR 60-2.17(b)(3). As an incentive to encourage 
contractors to use the analytical procedures contained in the Voluntary 
Guidelines, OFCCP would deem a contractor, whose self-evaluation 
``reasonably meets'' the procedures outlined in the Voluntary 
Guidelines, to be in compliance with section 60-2.17(b)(3) and would 
coordinate OFCCP's review of the contractor's compensation practices 
during a compliance evaluation in the manner specified in the Voluntary 
Guidelines. (See 71 FR at 35122.) In OFCCP's experience since 2006, 
contractors have rarely utilized the analytical procedures outlined in 
the Voluntary Guidelines when analyzing their compensation practices 
under section 60-2.17(b)(3).
    Additionally, the analytical model set forth in the Voluntary 
Guidelines suffers from many of the same flaws as the investigative 
procedures prescribed by the Standards. For example, the Voluntary 
Guidelines established certain rigid numerical thresholds by which the 
similarly situated employee groupings are to be analyzed. OFCCP 
believes that for some contractors, these thresholds may be exceedingly 
difficult to meet.

II. Proposal

    OFCCP proposes to rescind the Standards and the Voluntary 
Guidelines in their entirety. OFCCP believes it is unnecessary to issue 
new Federal Register notices articulating its interpretations of Title 
VII principles related to compensation discrimination. OFCCP will 
continue to follow Title VII principles in investigating and analyzing 
compensation discrimination and in interpreting regulations related to 
compensation discrimination. The agency is proposing to normalize its 
treatment of those cases with other types of OFCCP discrimination 
investigations. Once rescinded, nothing in the Standards or the 
Voluntary Guidelines or their preambles could be relied upon as a 
statement of OFCCP's interpretation of Title VII principles or OFCCP 
regulations.
    If the Standards are rescinded, OFCCP will reinstitute the practice 
of exercising its discretion to develop compensation discrimination 
investigation procedures in the same manner it develops other 
investigation procedures. OFCCP will continually refine those 
procedures to ensure that they are as effective and efficient as 
possible. OFCCP will develop and issue compensation investigation 
procedures in the same manner as procedures for investigating other 
forms of discrimination, for example through the FCCM, directives and 
staff guidance materials.
    As mentioned above, OFCCP has found that contractors rarely use the 
analytical procedure suggested in the Voluntary Guidelines for 
conducting the compensation analyses required by section 60-2.17(b)(3). 
In the few instances when contractors have conducted their compensation 
analysis in the manner suggested in the Voluntary Guidelines, the 
coordination procedures of the Voluntary Guidelines have not proved to 
be an efficient method for verifying that the contractor's compensation 
system is not discriminatory. The agency has concluded that the 
Voluntary Guidelines have not proved to be either an effective vehicle 
for providing guidance about how to conduct the analyses required by 
section 60-2.17(b)(3) or an effective incentive for contractors to 
conduct the analysis in the manner described in the Voluntary 
Guidelines.
    In the absence of the Voluntary Guidelines, contractors will still 
be obligated to conduct self-evaluations of compensation practices as 
required by 41 CFR 60-2.17(b)(3). OFCCP will continue to provide any 
needed compliance assistance on section 60-

[[Page 64]]

2.17(b)(3) through various means, including webinars and the Web site 
distribution of Frequently Asked Questions as appropriate, rather than 
through the issuance of a Federal Register notice.
    OFCCP invites any interested party to comment on the proposal to 
rescind the Standards and the Voluntary Guidelines.

Patricia A. Shiu,
Director, Office of Federal Contract Compliance Programs.
[FR Doc. 2010-32602 Filed 12-30-10; 8:45 am]
BILLING CODE 4510-45-P