President Obama Takes Action to Promote Equal Pay for Employees of Federal Contractors

Author: Beth P. Zoller, XpertHR Legal Editor

April 10, 2014

In an effort to enforce equal pay laws and combat wage discrimination, on April 8 - National Equal Pay Day - President Obama signed two executive measures aimed at federal contractors.

An Executive Order - Non-Retaliation for Disclosure of Compensation Information - prohibits a federal contractor from firing or discriminating against employees or job applicants who have inquired about, discussed or disclosed their own or a coworker's compensation information. The purpose of the Order is to ensure "that employees of Federal contractors may discuss their compensation without fear of adverse action" and to "enhance the ability of Federal contractors and their employees to detect and remediate unlawful discriminatory practices, which will contribute to a more efficient market in Federal contracting."

In a Presidential Memorandum - Advancing Pay Equality Through Compensation Data Collection - the Department of Labor (DOL) is directed to issue regulations by August 6, 2014 requiring federal contractors to submit information about the compensation paid to employees, including data by race and sex. The DOL is to use the data to (i) encourage federal contractors to voluntarily comply with equal pay laws, (ii) identify and analyze industry trends and (iii) focus enforcement efforts on federal contractors with potential discrepancies in pay. The imposition of additional burdens and recordkeeping requirements is discouraged.

These moves come at a time when President Obama has called on Congress to address equal pay and wage discrimination and raised the minimum wage for federal contractors. In addition, the Equal Employment Opportunity Commission maintains that equal pay is one of its six strategic enforcement priorities. Based on these measures, federal contractors should review their compensation policies and practices to make sure they comply with the equal pay laws.