Among its notable requirements:
·
Employees cannot be retaliated against for
discussing their own pay or asking co-workers about their compensation. With certain exceptions (involving government
investigations or other legal obligations), employees whose essential job
duties involve accessing compensation data or working with confidential personnel
files (such as but not limited to human resources and benefits) may be
disciplined for disclosing pay data about
other employees.
·
Employees and applicants are not required to
disclose their own compensation to other employees, etc. and employers are not required to disclose
information about the compensation of employees.
·
The Equal Opportunity clause mandated by 41
C.F.R. § 60-1.4 to be included in federal contracts and subcontracts has been
amended to include the following new paragraph:
(3) The contractor will not discharge or in any other
manner discriminate against any employee or applicant for employment because
such employee or applicant has inquired about, discussed, or disclosed the
compensation of the employee or applicant or another employee or applicant.
This provision shall not apply to instances in which an employee who has access
to the compensation information of other employees or applicants as a part of such
employee’s essential job functions discloses the compensation of such other
employees or applicants to individuals who do not otherwise have access to such
information, unless such disclosure is in response to a formal complaint or
charge, in furtherance of an investigation, proceeding, hearing, or action,
including an investigation conducted by the employer, or is consistent with the
contractor’s legal duty to furnish information.
·
In addition to including this subsection (3) in
their subcontracts, employers must also include a version
of this rule (as summarized by the OFFCCP) in their employee handbooks and
disseminate it to applicants and employees by posting a copy in a conspicuous
location or electronically. Employers
are required to use the exact language proscribed by the OFCCP in its summary. While contractors are required to inform
their employees of the new rules, they are not required to provide new
management training on the issue.
·
The only real defense available to employers is
that the adverse employment action which the employee alleges was retaliatory
was really based on another issue.
Employers are allowed to raise any defense, except one that is based on
any rule, practice, agreement policy or other instrument which prohibits
employees or applicants from disclosing or discussing their own compensation or
the compensation of other employees or applicants (with the obvious exception
for employees whose essential job functions involve access to compensation information
about other employees).
Aside from the new paragraph in the EO clause and a few new
definitions, the new regulation is relatively brief (for a government
regulation):
§ 60–1.35 Contractor obligations and defenses to violation of
the nondiscrimination requirement for compensation disclosures.
(a) General defenses. A contractor may pursue a defense to an
alleged violation of paragraph (3) of the equal opportunity clauses listed in §
60–1.4(a) and (b) as long as the defense is not based on a rule, policy, practice, agreement, or other instrument that prohibits
employees or applicants from discussing or disclosing their compensation or the
compensation of other employees or applicants, subject to paragraph (3) of the
equal opportunity clause. Contractors may pursue this defense by demonstrating,
for example, that it disciplined the employee for violation of a consistently and
uniformly applied company policy, and that this policy does not prohibit, or
tend to prohibit, employees or applicants from discussing or disclosing their
compensation or the compensation of other employees or applicants.
(b) Essential job functions defense.
Actions taken by a contractor which adversely affect an
employee will not be deemed to be discriminatory if the employee has access to
the compensation information of other employees or applicants as part of such employee’s
essential job functions and disclosed the compensation of such other employees
or applicants to individuals who do not otherwise have access to such
information, and the disclosure was not in response to a formal complaint or
charge, in furtherance of an investigation, proceeding, hearing, or action, including
an investigation conducted by the contractor, or is consistent with the information.
(c) Dissemination of nondiscrimination provision.
The contractor or subcontractor shall disseminate the
nondiscrimination provision, using the language as prescribed by the Director
of OFCCP, to employees and applicants:
1) The
nondiscrimination provision shall be incorporated into existing employee
manuals or handbooks; and
(2) The nondiscrimination provision shall be disseminated to
employees and applicants. Dissemination of the provision shall be executed by electronic
posting or by posting a copy of the provision in conspicuous places available
to employees and applicants for employment.
OFCCP has also published a supplement to its official "EEO is the Law" poster which most contractors utilize and which refers to the Pay Transparency rules (as well as to other recently published regulations). The OFFCP official summary of the Pay Transparency regulation which covered
employers are required to post in their employee handbooks, etc. provides as
follows:
PAY TRANSPARENCY
POLICY STATEMENT
The contractor will not discharge or in any other manner
discriminate against employees or applicants because they have inquired about,
discussed, or disclosed their own pay or the pay of another employee or
applicant. However, employees who have access to the compensation information
of other employees or applicants as a part of their essential job functions
cannot disclose the pay of other employees or applicants to individuals who do
not otherwise have access to compensation information, unless the disclosure is
(a) in response to a formal complaint or charge, (b) in furtherance of an
investigation, proceeding, hearing, or action, including an investigation
conducted by the employer, or (c) consistent with the contractor’s legal duty
to furnish information.
NOTICE: This
summary is designed merely to inform and alert you of recent legal
developments. It does not constitute legal advice and does not apply to any
particular situation because different facts could lead to different results.
Information here can be changed or amended without notice. Readers should
not act upon this information without legal advice. If you have any questions
about anything you have read, you should consult with or retain an employment
attorney.
