On Monday, January 11, the Office of Federal Contract Compliance Programs’ (OFCCP) final rule on pay transparency, which prohibits federal contractors from discriminating against employees and applicants “who inquire about, discuss, or disclose their own compensation or the compensation of other employees or applicants,” will go into effect. OFCCP had published the rule, titled “Government Contractors, Prohibitions Against Pay Secrecy Policies and Actions,” which implements Executive Order 13665, Non-Retaliation for Disclosure of Compensation Information, in September of 2015 to curb prohibitions on employees’ discussions about pay with their coworkers. The new rule applies to companies with over $10,000 in federal contracts or subcontracts that are entered into or modified on or after January 11, 2016.

On January 5, 2016, OFCCP announced that it will host a webinar on January 11—the final rule’s effective date—at 2 p.m. Eastern, during which the public can hear from OFCCP’s Division of Policy and Program Development and the U.S. Department of Labor’s (DOL) Office of the Solicitor. The presenters “will provide an overview of the final rule, address questions received by the agency since the rule’s September publication, and illustrate the practical application of defenses provided in the rule through several hypothetical scenarios.” Attendees may register for the webinar, “Final Rule Prohibiting Pay Secrecy Policies: Executive Order 11246, as amended by Executive Order 13665,” on the DOL’s registration page.

Next Steps

Employers should ensure that they have taken steps toward compliance before the final rule’s effective date. This includes:

  • Eliminating policies that prevent workers from discussing compensation;
  • Updating policies to ensure that employees are not discriminated against for discussing or inquiring about compensation;
  • Ensuring that OFCCP’s nondiscrimination provision addressing pay transparency is included in company manuals, policies, and handbooks;
  • Disseminating a pay transparency policy to applicants and employees; and
  • Updating the equal opportunity clause in applicable federal contracts and subcontracts to prohibit discrimination against employees and applicants who discuss compensation.