by Emily L. Bristol
The comment period for a new rule prohibiting federal contractors from having pay secrecy policies will come to a close on December 16.
The U.S. Department of Labor’s (DOL) Office of Federal Contract Compliance Programs (OFCCP) regulation, “Government Contractors, Prohibitions Against Pay Secrecy Policies and Actions,” would prohibit contractors from taking action against applicants or employees because they were discussing, inquiring about, or disclosing their compensation or the compensation of another applicant or employee. The proposed regulation also includes:
- Definitions for key terms such as “compensation,” “compensation information,” and “essential functions”;
- An obligation to disseminate a new OFCCP-mandated nondiscrimination provision to employees and applicants; and
- A defense for the discipline of an employee, such as an HR employee, who improperly discloses employee pay absent a separate legal obligation to disclose the information.
If the regulation becomes final, federal contractors will need to review their applicable policies and practices that may prohibit employees and applicants from discussing their pay. Many employers already have eliminated pay secrecy policies because of the National Labor Relations Board’s (NLRB) position that prohibiting employees from discussing their pay is a violation of the National Labor Relations Act (NLRA). However, the OFCCP’s prohibition on pay secrecy includes applicants, supervisors, managers, and employees of rail and air carriers, all of whom aren’t protected by the NLRA.
In addition, federal contractors will see changes to their contract clauses and will need to disseminate a new policy provision via existing employee manuals or handbooks and electronic posting.
For more information on the proposed regulation, see the October issue of Federal Employment Law Insider.