DOL Mandates Pay Transparency

moneyOn the heels of President Obama’s recent executive order requiring federal contractors to provide at least seven days of paid sick leave, the Department of Labor’s Office of Federal Contract Compliance Programs today issued a final rule banning federal contractors from having policies that discourage their employees from discussing, disclosing or inquiring about their own pay or that of their co-workers.

The final rule implements Executive Order 13665, signed by the president last year, which stems from the Lily Ledbetter Fair Pay Act.

“It is a basic tenet of workplace justice that people be able to exchange information, share concerns and stand up together for their rights,” said DOL Secretary Thomas Perez in a statement. “But too many women across the country are in the same situation: They don’t know how much they make compared to their male counterparts, and they are afraid to ask.”

A “culture of secrecy” around pay keeps women from knowing they are underpaid and makes it difficult to enforce equal pay laws, according to the DOL. Women still earn only 23 cents for every dollar earned by male employees, the agency says.

The rule allows job applicants and employees of federal contractors and subcontractors to file a discrimination complaint with the OFCCP if they believe that their employer fired or otherwise discriminated against them for discussing, inquiring about or disclosing their own compensation or that of others.

Pay transparency benefits companies as well as employees, said OFCCP Director Patricia Shiu.

“Indeed, forward-thinking companies that have embraced greater transparency find that it benefits them and their workforce by helping them attract and retain talented workers,” she said.

The rule will go into effect 120 days after its publication in the Federal Register.

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