The nascent trend toward pay transparency has a friend in the U.S. government, which now prohibits its contractors from discriminating against or punishing employees or job applicants for discussing or disclosing their pay.
The OFCCP last week began enforcing Executive Order 13665, which was issued by President Obama in 2014. The intent is to eliminate pay discrepancies based on gender, race, or other improper reasons by enabling workers to discover inequities in time to take action to challenge them.
Although the rule is now in place, it doesn’t affect existing federal contractors. The obligations only come into play when a contractor enters into a new or modified contract with a value of $10,000 or more.
Under the OFCCP rules, employers with pay secrecy rules must eliminate them and advise employees they may “inquire about, discuss, or disclose their compensation or the compensation of other employees or applicants” without fear of employer sanctions. The only exception is for disclosures made by employees who learn of individual pay rates in the performance of their job, pay clerks, for instance.
Employers must include a specific “Pay Transparency Nondiscrimination Provision” in their employee manual or handbook, and post it electronically or in print in conspicuous locations available to both employees and applicants.
According to Jackson Lewis attorney Laura Mitchell, “The statement can be ‘posted’ to applicants in the same manner in which the EEO is the Law is made available — through a link on the company’s career webpage.“
That poster is being updated to include mention of pay transparency. Until then, the OFCCP has a supplement for federal contractors that references several additional provisions, including pay transparency. This too must be posted.