Jan. 5, 2015
Department of Labor
Office of Federal Contract Compliance Programs
Attn: Debra A. Carr, Director, Division of Policy and Program Development
Room C-3325
200 Constitution Ave., NW
Washington, D.C. 20210
RE: Government Contractors, Requirement to Report Summary Data on Employee Compensation, RIN
1250-AA03
To Whom It May Concern:
WorldatWork respectfully submits these comments to the Department of Labor’s (DOL) Office of Federal
Contract Compliance Programs (OFCCP) on the Government Contractors, Requirement to Report
Summary Data on Employee Compensation notice of proposed rulemaking (NPRM). The association
appreciates the opportunity to provide feedback to the DOL and OFCCP.
WorldatWork Background Information
WorldatWork is a not-for-profit human resources association for professionals and organizations
focused on compensation, benefits, work-life effectiveness and total rewards — strategies to attract,
motivate and retain an engaged and productive workforce. WorldatWork and its affiliates provide
comprehensive education, certification, research, advocacy and community, enhancing careers of
professionals and, ultimately, achieving better results for the organizations they serve. WorldatWork has
more than 65,000 members and subscribers worldwide. Founded in 1955, WorldatWork is affiliated with
more than 70 local human resources associations and has offices in Scottsdale, Ariz., and Washington,
D.C.
WorldatWork members believe there is a powerful exchange relationship between employer and
employee, as demonstrated through the WorldatWork Total Rewards Model. Total rewards involves the
deliberate integration of five key elements that effectively attract, motivate and retain the talent
required to achieve desired organizational results. The five key elements are: compensation, benefits,
work-life, performance and recognition, and development and career opportunities.
This model recognizes that total rewards operates in the context of overall business strategy,
organizational culture and human resources strategy, as well as a complex external environment. Within
this context, an employer leverages the five elements to offer and align a value proposition that benefits
Washington, D.C.
Office & Conference Center
1100 13th Street NW
Suite 800
Washington, D.C. 20005 USA
Phone: 202/315-5500
Toll-free: 877/951-9191
Fax: 202/315-5550
Toll-free fax: 866/816-2962
www.worldatwork.org
the organization and the employee. An effective total rewards strategy results in satisfied, engaged and
productive employees, who in turn deliver desired performance and results.
Comments on Government Contractors, Requirement to Report Summary Data on Employee
Compensation Notice of Proposed Rulemaking, RIN 1250-AA03
WorldatWork would like to express its concern about whether there is a need for another compensation
data collection tool, the legitimacy of the data being collected, how burdensome that data collection
would be for businesses and confidentiality of compensation practices.
Compensating employees is the result of a complex process that is different for every organization. Each
decision, from starting salary to bonuses to determining wage increases to alternative ways to reward
employees, is based on an organization’s mission, environment and culture, as well as the needs and
values of its workforce. In 2015, rewarding employees for their time and labor is no longer solely about
monetary compensation. Employer programs that address their employees’ health care, workplace
flexibility, retirement savings, development opportunities and recognition programs are also prioritized
by today’s American workforce.
When properly implemented and administered, compensation programs maximize an organization’s
ability to fully comply with laws pertaining to fair pay as well as support business needs in terms of
differentiating compensation levels between individuals based on legitimate and lawful factors. A
thorough compensation program provides organizations with key tools they need to attract, retain and
motivate a qualified workforce that can successfully execute business strategy.
Necessity
It is important to note that a number of current federal laws — the Equal Pay Act of 1963, Title VII of the
Civil Rights Act of 1964, the Civil Rights Act of 1991 and the Lilly Ledbetter Fair Pay Act of 2009 —
already require data collection that is sufficient enough to ensure equal pay. That is, they already
require that employers comply with the immediate intent of this NPRM. Therefore, the proposed OFCCP
addition of an Equal Pay Report, which assumes employers are not doing enough to ensure pay equality,
would just add another duplicative layer of reporting. The government simply has not established a
need for another compensation data collection tool.
Legitimacy of the Data
WorldatWork is sensitive to the OFCCP’s concerns regarding the problems of unlawful compensation
discrimination based on protected factors. However, it is a reasonable question whether this broadbased compensation data is an accurate basis for identifying a contractor for compliance review based
on alleged concerns about equal pay or adequate compensation for an employee’s work. For example:
•
•
The use of this aggregate data is meaningless because EEO-1 categories include multiple job
titles and W-2 data does not consider the critical factors upon which pay rate is dependent (e.g.,
location, type of job, level of responsibility, qualifications, training, experience, education,
specialty). All of this makes questionable the reliability of the equal pay report and its use in
identifying potential discrimination.
Proposed industry groups are broad, but the standard could be based on only a limited group of
contractors in the industry rather than a true nationwide industry standard.
2
•
An employer’s variation from the OFCCP’s developed industry standard is not evidence of pay
discrimination. It is simply evidence that a contractor pays its employees more or less for a
variety of reasons.
Administrative Burden
Since the mid-1930s, businesses have had to respond to an ever-increasing number of local, state and
federal laws, regulations and enforcement agencies. With each new government intervention,
opportunities for individual initiative and management activities become more restricted, and
administrative burden increases exponentially. With every new requirement there is an administrative
cost associated, and absent a proven need for another compensation data collection tool (refer to
“Necessity” section), the administrative burden is not warranted.
Confidentiality
Compensation is a very sensitive component of a business strategy, and public disclosure of this
information can render a business uncompetitive in attracting and rewarding talent. Therefore, our
industry has a very real concern about this NPRM requiring employers to disclose confidential and
sensitive compensation data to the federal government, given the public and competitors can obtain
that information through a Freedom of Information Act request. This potential outcome would appear
to directly undermine the intent of the Sherman Antitrust Act, which guards against the collusive setting
of wages levels by competitors, thereby reducing competition for workers.
Conclusion
WorldatWork appreciates the opportunity to provide comments on the Department of Labor’s Office of
Federal Contract Compliance Programs’ Government Contractors, Requirement to Report Summary
Data on Employee Compensation notice of proposed rulemaking (NPRM). On behalf of WorldatWork’s
65,000 members, the association looks forward to working with the commission on this issue and future
endeavors. Please do not hesitate to contact me at 202-315-5500 or [email protected] for
further information.
Sincerely,
Cara Woodson Welch, Esq.
Vice President, Public Policy, News & Publications
3