Final Rule Prohibits Certain Federal Contractors from Discriminating Against Workers Who Discuss Pay

October 1, 2015

in Misc.

Rule Effective January 11, 2016

The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has issued a final rule that prohibits certain federal contractors from discriminating against workers who discuss compensation.

OFCCP released the final rule to implement Executive Order 13665 (issued on April 8, 2014) to prohibit federal contractors from discriminating against, in any manner, employees and job applicants who inquire about, discuss, or disclose their own compensation or the compensation of other employees or applicants.

Executive Order 13665 amends Executive Order 11246—which prohibits employment discrimination because of race, color, religion, sex, sexual orientation, gender identity, or national origin—by revising the mandatory equal opportunity clauses that are included in federal contracts and subcontracts, and federally assisted construction contracts, and creating contractor defenses.

Final Rule
Highlights of the final rule include the following:

  • Requiring that certain information be included in covered federal contracts and subcontracts. The final rule requires the equal opportunity clause included in covered federal contracts and subcontracts to be amended to include that federal contractors and subcontractors must refrain from discharging—or otherwise discriminating against—employees or applicants who inquire about, discuss, or disclose their compensation or the compensation of other employees or applicants; ?Note: An exception exists where the employee or applicant makes the disclosure based on information obtained in the course of performing his or her essential job functions.
  • Requiring that federal contractors incorporate a prescribed nondiscrimination provision into their existing employee manuals or handbooks and disseminate the nondiscrimination provision to employees and to job applicants;
  • Defining key terms such as compensation, compensation information, and essential job functions as used in Executive Order 11246, as amended; and
  • Providing employers with two defenses to an allegation of discrimination: a general defense, which could be based on the enforcement of a “workplace rule” that does not prohibit the discussion of compensation information; and an “essential job functions” defense.

The final rule is effective on January 11, 2016. Click here to read the text of the rule. OFCCP’s website offers resources for affected contractors and subcontractors, including a Fact Sheet and a new “EEO is the Law” Poster Supplement.

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