Back in mid-August, ClearanceJobs covered news of a letter sent to President Obama by four Federal contractor associations. The groups were pleading with the administration to halt the issuance of new regulations affecting personnel costs on government contracts. It was a forlorn hope. A new wave of executive orders creates new requirements for government contractors and subcontractors on issues from paid sick leave to pay discussions.
Paid Sick Leave Rule
The President issued an executive order on Labor Day mandating paid sick leave for all Federal contract employees. Not only was the mandate applied to Federal contractors, it was also applied to sub-contractors. While the number of contract employees affected by this order is uncertain, an estimated 300,000 have had no paid sick leave until now and other contract employees may see their sick leave availability improved by their employer’s compliance with the detailed terms of the order.
Pay Secrecy Rule
In the same week in September, the Office of Federal Contract Compliance Programs (OFCCP) posted a final rule implementing executive orders concerning pay secrecy policies. Effective Jan. 11, 2016, the equal opportunity clause in covered federal contracts and subcontracts will be amended to prohibit Federal contractors from firing or otherwise discriminating against employees who ask about, disclose or discuss their compensation or that of other employees.
The OFCCP notes that median earnings for women and African-Americans are below that for men in general. Prohibitions about discussing compensation by employers are cited as one way that compensation discrimination is hidden. The OFCCP states “Promoting pay transparency by prohibiting pay secrecy policies helps make the federal contractor workforce more efficient.”
The median wage is that point where half of all workers earn more than that point and half are lower. It is a very basic measure of wage parity.
Anti-pay Secrecy Laws
While the latest rule applies only to Federal contractors and subcontractors, similar protections have been enacted that apply to all employers in a number of states. The Society for Human Resource Management reported on Aug. 27 that the following states have enacted laws making it illegal to prohibit an employee from discussing their compensation: Connecticut, California, the District of Columbia, Colorado, Illinois, Louisiana, Maine, Michigan, Minnesota, New Hampshire, New Jersey, Oregon and Vermont.
Regulations and laws prohibiting pay secrecy generally exempt from protection individuals who have access to compensation information as part of their job duties. The payroll clerk is not allowed to gossip about salaries. Note that there is no requirement that employers disclose compensation information, only that they cannot prohibit discussions between employees on the topic.
