On April 8, 2014, President Obama celebrated National Equal Pay Day by signing two new executive actions intended to combat pay discrimination and strengthen existing equal pay laws. The president first signed an Executive Order prohibiting federal contractors and subcontractors from retaliating against employees and applicants who choose to discuss their compensation. To effectuate these new anti-retaliation protections, the president also amended Executive Order 11246, which governs the existing affirmative action obligations of government contractors with respect to minorities and females.
As amended, Executive Order 11246 now expressly prohibits contractors and subcontractors from discharging or otherwise discriminating against employees or applicants who have “inquired about, discussed, or disclosed” their compensation or that of another individual. The order does not require the disclosure of compensation data to employees or applicants; it simply bars government contractors and subcontractors from retaliating against individuals who discuss this type of information either at work or outside the workplace. The president also directed the Secretary of Labor to issue regulations that implement these new anti-retaliation protections.
This Executive Order amendment was followed by a Presidential Memorandum directing the Department of Labor to establish new regulations requiring government contractors and subcontractors to submit employee compensation data to that agency. The memorandum emphasized that enforcement of existing equal pay laws has been impeded “by a lack of sufficiently robust and reliable data” on employee compensation. As a result, the new regulations will require all covered entities to provide the DOL with summary data on employee compensation, including data broken down by race and sex.
In light of these presidential actions, federal contractors and subcontractors should prepare for the new requirements by taking steps to ensure that employee compensation data is properly documented and maintained. Covered entities should also inform their managers and supervisors that employee compensation is now a permissible discussion topic in the workplace.
The DOL’s new compensation data regulations should be issued within 120 days of April 8, 2014. The timeline for publication of the anti-retaliation regulations is within the next 160 days. Thompson Hine will continue to monitor the situation and provide additional information once those regulations are issued.