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OFCCP Announces Proposed Pay Transparency Rule

on Friday, 10 October 2014 in Labor & Employment Law Update: Sarah M. Huyck, Editor

The OFCCP has been busy. On September 15, 2014, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) announced a proposed rule that would prohibit federal contractors from maintaining pay secrecy policies (similar to the current obligations under the National Labor Relations Act). Under the terms of the proposal, federal contractors and subcontractors may not fire or otherwise discriminate against employees or applicants for discussing, disclosing, or inquiring about their compensation or that of another employee or applicant.

President Obama signed Executive Order 13665 on April 8, 2014, instructing the Secretary of Labor to propose a rule to require pay transparency among federal contractors. The proposed rule would amend the equal opportunity clauses in Executive Order 11246 to afford protections to workers who talk about pay. It would also add definitions for compensation, compensation information, and essential job functions, terms which appear in the revised clauses.

The proposal also establishes two types of defenses that contractors can use against allegations of discrimination under Executive Order 13665. The first defense allows the contractor to prove that it would have taken the same adverse action against the individual in the absence of the employee’s protected activity. The contractor does this by showing that it disciplined the employee for violation of a consistently and uniformly applied policy—a policy which does not prohibit individuals from discussing their compensation. Secondly, a contractor’s actions will not be deemed to be discriminatory if the employee has access to the compensation information of other employees/applicants as part of such employee’s essential job functions and disclosed the compensation in a scenario which was not in response to a formal complaint, charge, investigation, or other proceeding.

The proposed rule will be open for public comment for 90 days.

Kelli P. Lieurance

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