Tags: Compensation

There's often confusion among federal contractors on how to properly identify and analyze their Pay Analysis Groups (PAG), leading to questions and a request for feedback from OFCCP. On July 22, 2019, the latest opinion letter from OFCCP looked to answer the question of whether or not contractors can collaborate with OFCCP to create a PAG structure that would be accepted as valid in compliance reviews.

The opinion letter stresses that contractors are welcome to send OFCCP their PAG structure and the agency will review them and possibly provide feedback. Then, OFCCP could potentially use that information for future audits if applicable. The problem is that OFCCP can't agree to utilize a contractor's PAG without further evaluation, depending on when the audit takes place.

OFCCP conducts its analyses in real time, meaning its acceptance of a PAG needs to coincide with the time period in which a contractor's systems, functions, and organization is under review. Even if OFCCP accepts a PAG structure as valid, there is not guarantee it will be used in the future for that contractor. OFCCP is under no obligation to use the previously-approved PAG during the compliance evaluation as it may longer be appropriate based on material changes within the contractor's structure.

Contractors can certainly submit their current PAGs to OFCCP and they may receive feedback. In some cases, contractors might even have their structure accepted. However, they should be prepared to adjust their PAGs based on changes in their organization's processes.

 Tags: Compensation

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