OFCCP Proposes Rule to Prohibit Pay Secrecy Policies and Practices by Federal Contractors and Subcontractors | Practical Law

OFCCP Proposes Rule to Prohibit Pay Secrecy Policies and Practices by Federal Contractors and Subcontractors | Practical Law

The US Department of Labor's (DOL) Office of Federal Contract Compliance Programs (OFCCP) issued a Notice of Proposed Rulemaking (NPRM) to implement Executive Order 13665, which prohibits federal contractors and subcontractors from discriminating against workers who discuss their compensation and the compensation of others.

OFCCP Proposes Rule to Prohibit Pay Secrecy Policies and Practices by Federal Contractors and Subcontractors

by Practical Law Labor & Employment
Published on 19 Sep 2014 • USA (National/Federal)
The US Department of Labor's (DOL) Office of Federal Contract Compliance Programs (OFCCP) issued a Notice of Proposed Rulemaking (NPRM) to implement Executive Order 13665, which prohibits federal contractors and subcontractors from discriminating against workers who discuss their compensation and the compensation of others.
On September 17, 2014, the DOL's Office of Federal Contract Compliance Programs (OFCCP) issued a Notice of Proposed Rulemaking (NPRM) about proposed amendments to the regulations implementing Executive Order 11246 as amended, which sets out equal employment opportunity requirements for federal contractors and subcontractors. This NPRM would implement Executive Order 13665 (79 Fed. Reg. 20749 (Apr. 8, 2014)), which President Obama signed on April 8, 2014 (see Legal Update, Executive Order Prohibits Retaliation for Disclosing Compensation Information).
The proposed rule:
  • Amends the equal opportunity clauses required in federal contracts and subcontracts under Executive Order 11246, to include a requirement that the federal contractor or subcontractor refrains from discharging or discriminating against employees or applicants who inquire about or discuss:
    • their own compensation; or
    • the compensation of others.
  • Defines the following key terms used in Executive Order 13665:
    • compensation;
    • compensation information; and
    • essential job functions.
  • Requires that federal contractors:
    • incorporate the nondiscrimination provision into their employee handbooks or manuals; and
    • distribute the nondiscrimination provision to employees and job applicants.
  • Provides contractors and subcontractors with a defense to discrimination allegations under Executive Order 13665, if they can show that either:
    • they would have taken the same adverse action regardless of the employee's or applicant's protected activity under a consistently enforced work rule that does not prohibit or tend to prohibit employee discussions about compensation (characterized as "General defenses"); or
    • they disciplined an employee for disclosing compensation information of other employees or applicants to which the employee had access because of the employee's essential job functions and to which the recipients of the information did not have access, where the disclosure was not in response to a formal charge, to further an investigation, or consistent with the contractor's duty to provide information (characterized as "Essential job functions defense").
The asserted goals of this proposed rule include:
  • Reducing discrimination in pay.
  • Ensuring that qualified and productive employees receive fair compensation.
  • Providing workers with tools to fight this pay discrimination.
The OFCCP invites written comments on the proposed rule by fax, mail or through the federal eRulemaking website by December 16, 2014.