US Labor Department promotes pay transparency among federal contractors

WASHINGTON — Ensuring that women earn equal pay for equal work is essential to improving the economic security of our families and the strength of our middle class. In too many workplaces around the country, however, a culture of secrecy keeps women from knowing that they are underpaid, and makes it difficult to enforce equal pay laws. Prohibiting pay secrecy policies and promoting pay transparency helps address the persistent pay gap for women — which remains at 23 cents for every dollar earned by men — and provides employers access to a diverse pool of qualified talent. That is why the U.S. Department of Labor today issued a commonsense rule that finally lifts the veil on pay for employees of federal contractors and subcontractors.

"It is a basic tenet of workplace justice that people be able to exchange information, share concerns and stand up together for their rights. But too many women across the country are in the same situation: they don't know how much they make compared to male counterparts, and they are afraid to ask," said U.S. Secretary of Labor Thomas E. Perez. "When he signed the Lilly Ledbetter Fair Pay Act, President Obama made clear his commitment to equal pay for equal work. Today's final rule is another important step toward that important goal."

The final rule, from the department's Office of Federal Contract Compliance Programs, promotes pay transparency by barring the policies of some federal contractors that have prevented their workers from discussing these issues. Under the rule, federal contractors and subcontractors may not fire or discriminate against employees for discussing, disclosing, or inquiring about their own pay or that of their co-workers. The rule also protects pay discussions by job applicants.

The rule allows job applicants and employees of federal contractors and subcontractors to file a discrimination complaint with OFCCP if they believe that their employer fired or otherwise discriminated against them for discussing, inquiring about, or disclosing their own compensation or that of others.

"Pay secrecy practices will no longer facilitate the pay discrimination that is too often perpetrated against women and people of color in the workplace," said OFCCP Director Patricia Shiu. "Indeed, forward thinking companies that have embraced greater transparency find that it benefits them and their workforce by helping them attract and retain talented workers. And research suggests these approaches have a substantially positive impact on society, workers, the workforce, and the economy as a whole."

The final rule implements Executive Order 13665, signed by President Barack Obama on April 8, 2014. Stemming from the Lilly Ledbetter Fair Pay Act, Executive Order 13665 amended OFCCP's existing legal authority under Executive Order 11246, which also prohibits federal contractors and subcontractors from discriminating based on race, color, religion, sex, sexual orientation, gender identity, and national origin.

The final rule becomes effective 120 days from its publication in the Federal Register. More information is available at http://www.dol.gov/ofccp/PayTransparency/.