On September 11, 2015, the Office of Federal Contract Compliance Programs (OFCCP) published the final rule on pay transparency in the Federal Register, revising the regulations found at 41 CFR 60-1. The final rule takes effect 120 days from publication, January 11, 2016. Contractors will become subject to the new rule upon entering into a new or modified contract, in excess of $10,000, on or after the effective date.
The OFCCP has posted a fact sheet, a frequently asked questions (FAQ) page, and several other helpful resources, on the agency’s website. All of these documents can be found on the OFCCP website at: http://www.dol.gov/ofccp/PayTransparency.html. The final rule, as published in the Federal Register, can be found at: http://www.gpo.gov/fdsys/pkg/FR-2015-09-11/pdf/2015-22547.pdf. The actual regulations begin on Page 54924. In addition, staff from the OFCCP and the Office of the Solicitor presented a webinar on the new regulations on September 11, 2015.
The revised regulations modify the Equal Opportunity Clause to include a new section that states, “[t]he 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.” Contractors that incorporate the Equal Opportunity clause by reference using the words, “The Equal Opportunity Clause set forth in 41 CFR 60-1.4(a) is hereby incorporated by reference”, will not need to make any changes. The EEO Clauses for Protected Veterans and Individuals with Disabilities and the Executive Order 13496 are not affected.
Contractors will be required to disseminate the nondiscrimination provision, using language prescribed by the OFCCP, to employees and applicants by incorporating it into existing manuals or handbooks and posting it either electronically or physically in conspicuous places available to applicants and employees. The required nondiscrimination language is found on the OFCCP website at: http://www.dol.gov/ofccp/pdf/EO13665_PrescribedNondiscriminationPostingLanguage_ES_QA_508c.pdf.
The OFCCP also provided a supplement to the “EEO is the Law” Poster. The supplement includes a section on Pay Secrecy along with wording related to the revised regulations for Individuals with Disabilities and Protected Veterans. The supplement can be obtained from the OFCCP’s website at: http://www.dol.gov/ofccp/regs/compliance/posters/pdf/OFCCP_EEO_Supplement_Final_JRF_QA_508c.pdf. This supplement is not mentioned in the new regulations. During the webinar one of the speakers stated that the supplement must be used immediately despite the January 11, 2016 effective date of the new regulations.
Additionally, the revisions provide contractors two defenses to allegations of discrimination, a general defense and an essential job functions defense. Contractors may pursue a general defense by demonstrating that it disciplined an employee for violation of a consistently and uniformly applied company policy, provided that policy does not prohibit employees or applicants from discussing or disclosing their compensation or the compensation of other employees or applicants. The contractor may also take actions which adversely affect an employee if the employee has access to the compensation information of other employees or applicants as part of their essential job functions and discloses the information to other employees who would not otherwise have access to the information or it 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 employer, or is consistent with the contractor’s legal duty to furnish information. The revised regulations define the key terms: compensation, compensation information, and essential job functions.
Please contact us by calling (732) 446-2529 or sending us an e-mail at firstname.lastname@example.org if you are interested in discussing the pay transparency rule.