Two executive orders released by the White House this week address federal contractor pay, with specific steps to eliminate the gender pay gap in the federal contractor workforce.
On April 8 Labor Secretary Thomas Perez released a memorandum directing a rule requiring federal contractors to submit data on compensation pay information based on sex and race. The memorandum cites the Equal Pay Act of 1963, but says that lack of reliable data makes it difficult to enforce.
A second executive order released by the White House prohibits retaliation against employees who disclose their pay. The executive order argues that greater transparency in compensation ensures a better contractor workforce with greater ‘market efficiency.’
When employees are prohibited from inquiring about, disclosing, or discussing their compensation with fellow workers, compensation discrimination is much more difficult to discover and remediate, and more likely to persist. Such prohibitions (either express or tacit) also restrict the amount of information available to participants in the Federal contracting labor pool, which tends to diminish market efficiency and decrease the likelihood that the most qualified and productive workers are hired at the market efficient price. Ensuring that employees of Federal contractors may discuss their compensation without fear of adverse action will enhance the ability of Federal contractors and their employees to detect and remediate unlawful discriminatory practices, which will contribute to a more efficient market in Federal contracting. – Executive Order — Non-Retaliation for Disclosure of Compensation Information
What do they mean for cleared recruiters? As with other diversity hiring initiatives, the executive order requires additional records-keeping for recruiters and hiring managers.