Biden Pay Transparency Initiative Targets Federal Employees, Contractors
Author: Emily Scace, XpertHR Legal Editor
February 5, 2024
The Biden administration has announced a pair of executive orders, coupled with regulatory actions, aimed at increasing pay transparency and advancing pay equity for federal government workers and employees of federal contractors.
Citing persistent gender- and race-based pay disparities, the administration emphasized its commitment to "making the federal government a model employer and closing persistent wage gaps to help grow and strengthen our economy." The announcement was issued to commemorate the 15th anniversary of the Lilly Ledbetter Fair Pay Act, a 2009 federal law that modified the statute of limitations for pay discrimination claims under Title VII and other antidiscrimination laws.
Pay Transparency Proposed for Federal Contractors
In conjunction with the EO addressing federal contractors, the Federal Acquisition Regulatory (FAR) Council published a proposed rule that would:
- Prohibit federal contractors and subcontractors from seeking or considering a job applicant's compensation history for positions working on or in connection with a federal contract;
- Require federal contractors and subcontractors to include pay ranges in job postings for positions involving work on or in connection with a federal contract; and
- Require federal contractors and subcontractors to notify applicants of these requirements as part of the job announcement or application process.
If finalized, the rule would apply to all contracts over the government's micro-purchase threshold of $10,000. Covered employers would be required to follow the salary history ban and pay transparency requirements for all positions performing work on or in connection with a covered contract and would be encouraged to follow the same practices for other positions, particularly if the position could eventually work on the federal contract.
The proposed rule is open for public comment until April 1, 2024.
Federal Employee Salary History Ban
"Ending the use of salary history in pay setting decisions is a proven way to help curb pay discrimination that can follow workers from job to job and ensure that salaries are based on applicant's skills, experience and expertise," the Biden administration stated.
To that end, the Office of Personnel Management (OPM) announced that it has released a final rule, effective April 1, 2024, prohibiting the use of non-federal salary history in setting pay for new employees in many federal jobs. Covered agencies will also be prohibited from considering the salary in a candidate's competing job offer.
The ban applies to more than 80 federal agencies.
State Laws Continue to Spread
Ten states and several localities currently require some or all employers to disclose a pay range to job applicants, and a pay transparency law in the District of Columbia is slated to take effect June 30. Eighteen states currently restrict salary history inquiries for private employers.