Pay Transparency

Office of Federal Contract Compliance Programs (OFCCP) Announces Final Rule to Promote Pay Transparency

Did you know President Obama issued an Executive Order in 2014 to promote pay transparency and openness? His goal was to allow workers and job applicants to share information about their pay and compensation without fear of discrimination. In September, the Department of Labor issued a Final Rule implementing Executive Order 13665. This Final Rule takes effect on January 11, 2016. It amends the existing regulations that implement EO 11246.

According to OFCCP:

“The Final Rule amends the EO 11246 implementing regulations by:

  • Requiring that certain information be included in covered federal contracts and subcontracts. The Final Rule requires that the equal opportunity clause included in covered federal contracts and subcontracts be amended to include that federal contractors and subcontractors must refrain from discharging, or otherwise discriminating against, employees or applicants who inquire about, discuss, or disclose their compensation or the compensation of other employees or applicants. An exception exists where the employee or applicant makes the disclosure based on information obtained in the course of performing his or her essential job functions;
  • Requiring that federal contractors incorporate a prescribed nondiscrimination provision into their existing employee manuals or handbooks and disseminate the nondiscrimination provision to employees and to job applicants;
  • Defining key terms such as compensation, compensation information, and essential job functions as used in EO 11246, as amended; and
  • Providing employers with two defenses to an allegation of discrimination: a general defense, which could be based on the enforcement of a “workplace rule” that does not prohibit the discussion of compensation information; and an essential job functions defense.”

For more information, see http://www.dol.gov/ofccp/PayTransparency.html