Pay Transparency Rule Proposed by U.S. Department of Labor

Prohibits federal contractors, subcontractors from discriminating against workers who discuss pay

The U.S. Department of Labor’s Office of Federal Contract Compliance Programs has announced a proposed rule that would prohibit federal contractors from maintaining pay secrecy policies. Under the terms of the proposal, federal contractors and subcontractors may not fire or otherwise discriminate against any employee or applicant for discussing, disclosing, or inquiring about their compensation or that of another employee or applicant.

President Obama signed Executive Order 13665 on April 8, instructing the secretary of labor to propose a rule within 160 days to require pay transparency among federal contractors. The proposed rule, now available for public inspection, 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 EO 13665. The rule, published in the Sept. 17 issue of the Federal Register, is open for public comment for 90 days.