Employees of federal contractors, who previously have dwelled silently – and often unknowingly – in the gender and race pay chasm, may soon have a new tool to help them build a bridge across the gap.
On September 15, 2014, the United States Department of Labor's (DOL) Office of Federal Contract Compliance Programs announced a proposed rule that prohibits federal contractors from discharging or otherwise discriminating against employees or job applicants "because such employee or job applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant." The DOL's notice sets forth a comprehensive new regulation, drafted to implement President Obama's Executive Order 13665 entitled, "Non-Retaliation for Disclosure of Compensation Information." Among other concerns that the regulation seeks to address, the announcement notes that, despite nearly five decades of federal laws aimed at preventing gender-based compensation discrimination, women still earn, by some calculations, 23 cents less than men do dollar for dollar (and that disparity is more pronounced for women of color). The new regulation, if implemented, will allow women (and anyone else who wants to know) to inquire about what their counterparts are paid. Hopefully, this knowledge will allow underpaid employees to fight for equal pay — and to do so without fear of discrimination from their employer.
If the comments of advocacy titans like the ACLU, the National Women's Law Center, the National Organization for Women, and The Leadership Conference on Civil and Human Rights are any indication, it seems likely that the proposed regulation will be implemented. All of these organizations submitted strong endorsements of the proposed regulation that highlighted various beneficial effects of the regulation, including increased awareness of the factors underlying pay disparity, improved employee morale, and an increased likelihood of pay parity. To the extent that any of these organizations expressed critiques of the regulation, they related only to the possible defenses permitted under the rule. Specifically, several organizations called for the narrow construction of the two employer affirmative defenses permitted under the proposed regulation that: (1) the employee who disclosed compensation information had access to such information as part of their "essential job function" and (2) the adverse action taken would have been taken absent the protected activity pursuant to nondiscriminatory employer rules and policies applied consistently to all employees.
Assuming the regulations are implemented as currently drafted, federal contractors with contracts that exceed $10,000 — in addition to implementing the nondiscriminatory provisions of the regulation — would be required to amend their subcontracts and purchase orders, as well as employee manuals and handbooks, to include the anti-discrimination language of the regulation. They also would be required to post such language in conspicuous places accessible to employees and job applications.
Stay tuned here for updates on the status of the proposed regulation and how it may affect your business.
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