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November 19, 2004
Guidelines Proposed on Disparities in Compensation
The Office of Federal Contract Compliance Programs has proposed guidelines to help federal contractors determine existing gender, race, or ethnic based disparities in compensation (Federal Register: November 16, 2004, Volume 69, Number 220).

The guidelines provide suggested techniques for complying with a requirement for federal contractors to conduct a compensation self-evaluation for ensuring compliance with Executive Order 11246.

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Executive Order 11246 prohibits federal contractors with more than $10,000 worth of business in one year with the federal government from discriminating on the basis of race, color, religion, sex, or national origin.

Under the proposed guidelines, contractors with fewer than 250 employees may choose their own form of compensation analysis. However, the evaluation must be annually performed on similarly situated employee groupings (SSEGs). SSEGs should have at least 30 employees and be based on similar work, responsibility, skills, and qualifications. SSEGs should contain five or more incumbents who are members of either of the following pairs: male/female or minority/non-minority.

Records must be kept that either justify the discrepancies in compensation or reflect any pay adjustments that are made to remedy any disparities.

Employees with 250 or more employees are required to perform multiple regression analysis, a complicated statistical formula, best handled by a professional statistician or a specially designed program.

The agency is seeking comments on the proposed guidelines. Comments must be postmarked by December 16, 2004.

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