Lora M. Jennings, Attorney

Effective January 11, 2016, federal contractors are subject to Executive Order 13665 – known as the “Pay Transparency” Executive Order – which prohibits federal contractors from discriminating against employees and job applicants who inquire about, discuss or disclose their own compensation or the compensation of other employees or applicants.  Under these regulations, contractors are prohibited from having policies or procedures that prohibit or tend to restrict employees or applicants from discussing compensation.
 
Although these regulations apply to covered contracts entered into or modified on or after January 11, 2016, employers that anticipate entering into a covered contract should become familiar with these requirements.
 
These regulations require that the equal opportunity clause contained in covered contracts incorporate the non-discrimination provision that contractors must refrain from discharging, or otherwise discriminating against employees or applicants who inquire about, discuss or disclose their compensation or the compensation of other employees or applicants.  An exception exists for employees or applicants who make such a disclosure based on information obtained in the course of performing his or her essential job functions.  A separate defense also exists based on the enforcement of a work place rule that does not prohibit discussion of compensation information.
 
The Office of Federal Contractor Compliance (OFCCP) has issued a Pay Transparency Policy Statement.  The Pay Transparency Policy Statement must be (1) included in existing employee manuals or handbooks and (2) disseminated to employees and applicants by electronically posting or by posting a copy of the provision in a conspicuous place available to employees and applicants.  The OFCCP’s Pay Transparency Policy Statement can be found at: http://www.dol.gov/ofccp/paytransparencynondiscrimination.html
 
If you are a contractor with questions regarding the effect of the Pay Transparency Nondiscrimination Provision, and any related issues, please contact one of Martin Pringle’s employment law attorneys directly.

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