January 29, 2023

Volume XIII, Number 29


January 27, 2023

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White House Focuses on Pay Equity and Transparency

While the Paycheck Fairness Act (S. 205) is stalled in the U.S. Senate, the White House has called for action on issues relating to pay equity. On March 15, 2022, which was women’s “Equal Pay Day” for 2022 in the United States, President Biden issued an executive order “promoting pay equity and transparency” within the federal workforce and among federal contractors.

The order announced that the Office of Personnel Management “anticipates issuing a proposed rule that will address the use of salary history in the hiring and pay-setting processes for Federal employees,” and it called for the Federal Acquisition Regulatory Council (FAR Council) to consider issuing proposed rules “limit[ing] or prohibit[ing] Federal contractors and subcontractors from seeking and considering information about job applicants’ and employees’ existing or past compensation when making employment decisions.” Such a rule would cause federal contractors nationwide to join employers in California; Colorado; Connecticut; Delaware; Hawaii; Illinois; Maine; Maryland; Massachusetts; Kansas City, Missouri; Nevada; New Jersey; New York; Cincinnati and& Toledo, Ohio; Oregon; Philadelphia, Pennsylvania; Puerto Rico; Rhode Island; Vermont; and Washington in being limited in requesting or using applicants’ salary history information. Interestingly, the executive order states that the limitation on federal contractors would also apply to employees. Obviously, an employer would be privy to an employee’s salary information without seeking it from the employee. And many employers use employees’ current salaries when considering pay increases or rates of pay upon transfer or promotion. So a rule limiting use of salary information for current employees could have a significant impact on employers’ practices.

As we noted recently, the executive order came on the same day that the Office of Federal Contract Compliance Programs (OFCCP) issued a directive addressing pay equity audits by federal contractors.

The executive order is also consistent with the White House’s national strategy to achieve gender equity and equality, which was published on October 22, 2021. The strategy stems from President Biden’s March 8, 2021, executive order establishing the White House Gender Policy Council. The strategy outlined several “ interconnected priorities,” including improving economic security and accelerating economic growth. The March 15, 2022, executive order appears to take a step toward implementing some of the initiatives identified in the October 2021 strategy, including the following:

  • Closing gender gaps in the workforce and strengthening women’s labor force participation

  • “[S]trengthen[ing] laws prohibiting wage discrimination on the basis of gender, race, and other characteristics, and … increas[ing] resources for enforcement”

  • “[P]romot[ing] pay transparency [by] taking steps to increase the analysis of pay gaps on the basis of gender, race, and other factors”

  • “[P]ursu[ing] policies to eliminate reliance on prior salary history in compensation decisions”

The strategy, combined with the U.S. Equal Employment Opportunity Commission’s (EEOC) expression of full support, and now the new executive order and OFCCP directive, signals that the White House and federal agencies are paying attention to pay equity and other gender equity issues in the workplace.

© 2023, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.National Law Review, Volume XII, Number 81

About this Author

Sarah Platt, Ogletree Deakins Law Firm, Employment Law Attorney
Of Counsel

Sarah Platt is of counsel in the firm’s Milwaukee office. She represents employers in all areas of employment law, including:

  • Proactive, practical counseling regarding hiring, discipline, accommodation, leave, and termination issues to avoid litigation and create a strong record to defend employment actions should litigation arise;

  • Drafting strong employment policies to comply with state and federal laws and guide employee conduct;

  • Investigating and responding to...

Madeline Brown St. Louis Lawyer for Ogletree Deakins Nash Smoak & Stewart PC

Madeline is an associate in the firm’s St. Louis office. Madeline joined the firm in 2021 after receiving her J.D. from Indiana University Maurer School of Law.

While in school, Madeline served as articles editor for the Indiana Law Journal, a research assistant, and a member of the Student Steering Committee for the College of Labor and Employment Lawyers. Additionally, she gained experience as a summer associate at a national labor and employment firm and interned at a statewide hospital system in their corporate legal office.