A few days ago, I watched the PBS special, MAKERS: Women Who Make America, about the women’s movement and women’s struggles for equality at home and at work. The documentary highlighted the combined efforts of women across the country in their fight to eradicate gender discrimination, sexual harassment, and unequal pay in the work place. One thing that was particularly shocking was how members of the federal government in the past fought hard to maintain the status quo and keep women out of the workforce.

Oh, how times have changed.

Now, there are not only federal laws – such as Title VII and the Equal Pay Act – that prohibit unequal treatment of women in the workplace, but the government is also taking an aggressive approach to ferreting out compensation disparities for female, minority, disabled, and veteran employees of federal contractors and subcontractors.

And we were worried about sequestration.

As you likely know, the U.S. Office of Federal Contract Compliance Programs (OFCCP) enforces Executive Order 11246, which requires federal government contractors and subcontractors to ensure equal employment opportunity on the bases of race, color, national origin, religion, and sex through affirmative action and nondiscrimination.

Compensation discrimination is one form of employment discrimination prohibited by the Executive Order.

Just recently, on February 28, 2013, the OFCCP replaced its two previous guidance documents on compensation discrimination investigations with much broader procedures. In doing so, the OFCCP purports to align its analysis of pay discrimination with the principles used to enforce Title VII and “improve” and “clarify” the OFCCP’s compensation investigation program.

In reality, the OFCCP offers federal contractors and subcontractors very little direction by giving itself carte blanche over its investigation procedures. Specifically, the OFCCP has identified a number of methods that it may (or may not) utilize when investigating potential pay disparities because it plans to approach each investigation on a case-by-case basis. Therefore, OFCCP compliance officers will not know until they begin the investigation which investigative method they will utilize. Of course, if they don’t know, then surely HR professionals and compliance employees in your company cannot know either.

According to the OFCCP’s answers to frequently asked questions, the OFCCP will divide employees into “pay analysis groups.” To create these groups, they may begin with large groups of comparable employees from multiple job titles, units, categories and/or job groups, and then break the groups into smaller units to confirm, refine or further develop their analysis. Significantly, the OFCCP may also limit pay analysis groups to a single job, title, or individual. Thus, with apparently limitless options (the OFCCP likes to use the term “flexible”) the OFCCP has made it virtually impossible for employers to predict how their compensation data will be analyzed. It will not be a huge surprise if the OFCCP “finds” pay disparities where none really exist.

In the end, it is clear that this country has come a long way in advancing equal rights for women and all of its citizens. I, for one, am grateful to the trailblazers who stood up for equality and would not accept unequal treatment. However, the government’s current efforts to advance equal pay in the workplace may make it difficult for employers to identify potential pay disparities with their employees – certainly an inverse intent of the law.

So, if you are a federal contractor or subcontractor (and if you don’t know if you are or not, you NEED to find out), you have to be ready to deal with the OFCCP. You can help prevent compensation discrimination within your organization (and hopefully stay off of the OFCCP’s radar) by routinely evaluating compensation data as part of your affirmative action plans and by addressing any potential disparities that may arise. Also, you must keep careful records of all decisions that affect pay (e.g. new hires, raises, promotions, demotions, etc.) so that if your company is audited, it will have sufficient non-discriminatory evidence to support its employment decisions.

A full copy of the new directive can be found here.