On January 29, 2009, then-President Barack Obama signed the Lilly Ledbetter Fair Pay Act into law, which was intended to make equal pay laws more enforceable. The Biden administration marked the 15th anniversary of a landmark federal pay equity law and called for new measures to help close pay gaps between federal employees and federal contractor employees.
“Women workers are still paid an average of 84 cents for every dollar paid to men, and the disparities are even greater for many women of color. These inequities can amount to millions of dollars lost over a lifetime,” the White House said in a Jan. 29 statement.
The White House further issued two executive orders aimed at advancing pay equity for the federal workforce and federal contractor employees.
Advancing pay equity for federal workers
As part of the White House’s efforts, the Office of Personnel Management (OPM) has issued a final rule ensuring that more than 80 federal agencies will no longer be able to consider an individual’s current or past salary when determining federal employee salaries.
It further ended the use of salary history in wage-setting decisions, which was a proven way to help reduce wage discrimination that can follow workers from job to job and to ensure that salaries are based on the skills, experience and expertise of candidates. OPM noted that salary history is not necessarily a good indicator of a worker’s value, experience and expertise, and may also contain or exacerbate bias.
“For people receiving their first appointment as a civil employee of the federal government (or a reappointment after a break in service) in one of these pay systems, agencies will not be able to set pay based on non-federal salary or pay history of a candidate, which may vary between candidates of the same qualification. , or based on a competing offer of employment,” OPM announced via the Federal Register. “Agencies will also be required to have policies regarding setting compensation based on prior federal salary for employees with prior civilian service in the federal government.”
This final rule is effective April 1, and agencies must fully comply with this final rule no later than October 1.
“The federal government has been and continues to be a national leader on pay equity,” OPM Director Kiran Ahuja said in a statement. “Relying on a candidate’s salary history can exacerbate pre-existing inequities and disproportionately impact women and workers of color. With this settlement, the Biden-Harris Administration sets a new standard and demonstrates to the nation that we are serious when it comes to equality, fairness, and attracting top talent.
Promoting economy, efficiency and effectiveness in federal procurement
The White House has further sought to advance pay equity and pay transparency. The Federal Acquisition Regulation (FAR) Council has released a proposal to prohibit federal contractors and subcontractors from seeking and reviewing information about job applicants. compensation history when hiring or setting compensation for personnel working on or in connection with a government contract.
Additionally, the FAR proposal would require federal contractors and subcontractors to disclose expected salary ranges in Jobs, a policy that has proven effective in reducing pay secrecy, helping workers negotiate, and reducing pay gaps. The proposed policies are seen as helping federal contractors recruit, diversify and retain talent; improve job satisfaction and performance; and reduce employee turnover – all factors associated with promoting economy, efficiency and effectiveness of the federal contractor workforce.
The Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) propose to amend the FAR to implement a government-wide policy proposal developed by the Administrator of federal supply policy (administrator of the OFPP).
Under the proposed policy and proposed regulatory changes, contractors and subcontractors would also be required to disclose the compensation that will be offered to the hired candidate in job advertisements for certain positions.
Interested parties have until April 1 to submit written comments to the Regulatory Secretariat for consideration in developing the final rule.
Affirming equal pay obligations for federal contractors
The Department of Labor (DoL) Office of Federal Contract Compliance Programs also issued guidelines clarifying existing protections against discrimination in hiring or compensation decisions.
It was intended to help federal contractors and current and prospective employees of contractors understand when reliance on an individual’s compensation history for hiring or compensation decisions may result in unlawful discrimination.
“Learning about and relying on a candidate’s pay history to make hiring and compensation decisions can perpetuate and worsen existing pay disparities for workers who have experienced inequality in the past, like women , workers of color, workers who entered the workforce during a recession. , and workers who have temporarily left the workforce due to caregiving responsibilities,” DoL’s Office of Federal Contract Compliance Programs (OFCCP) noted in its recently updated FAQ on its website, and added : “This practice also creates inefficiencies for employers and the economy as a whole, as pay disparities decrease job satisfaction, performance, retention and productivity.
