Compliance officers at federal contractors are in for a rude awakening, thanks to a crackdown on pay discrimination practices that threatens to drastically expand the scope of compensation audits.

The Office of Federal Contract Compliance Programs—the Department of Labor division responsible for ensuring federal contractors’ compliance with Equal Employment Opportunity laws—is mulling the development of a controversial new compensation data collection tool that would help the OFCCP identify discriminatory pay practices at contractors. The OFCCP said in its semi-annual regulatory agenda for 2014 that it plans to issue a related notice of proposed rulemaking this month.

Jaclyn Jaeger is a freelance contributor to Compliance Week after working for the company for 15 years. She writes on a wide variety of topics, including ethics and compliance, risk management, legal,...