Equal Pay Day Ushers in New Mandates for Federal Contractors

April 8, 2014 was “Equal Pay Day.” This is the day that reflects how far into the current year women must work to match what men earned in the previous year. President Obama marked the occasion by signing an executive order prohibiting federal contractors from retaliating against employees or applicants for inquiring about, discussing, or disclosing compensation information. Secretary of Labor Thomas Perez said the order lifts “the restrictions that keep too many workers in the dark and prevent[s] them from advocating for fair and equal pay.” The effect of this executive order is questionable, however, given that the National Labor Relations Act already forbids employers from disciplining employees for discussing compensation. 

President Obama also issued a presidential memorandum directing the Department of Labor (DOL) to propose a rule by August 6, 2014 that would require federal contractors and subcontractors to submit summary employee compensation data to the DOL, including data by sex and race. The memorandum states that the DOL’s rule should maximize efficiency by directing enforcement efforts toward entities whose data suggest potential discrepancies in compensation. The memorandum adds that, to the extent possible, the rule should minimize the burden on federal contractors and subcontractors and instructs the DOL to avoid new recordkeeping requirements and rely on existing reporting frameworks to collect data.  The data will be used to enforce Executive Order 11246, which requires affirmative action by federal contractors with respect to gender and race.

MSEC will provide updates on these issues. In the meantime, please call Melinda Sanders, Managing Attorney, Affirmative Action Planning Services or Sandie Harrison, Manager, Affirmative Action Planning Services at 800.884.1328.