A growing patchwork of state pay transparency laws is placing additional requirements on employers’ hiring practices. As of the date of this blog, five states, as well as the District of Columbia, enacted pay transparency laws requiring employers to disclose salary ranges in job postings, among other things. Furthermore, these general obligations will soon apply to certain federal contractors. On January 30, 2024, the Federal Acquisition Regulatory Council (the FAR Council) issued a proposed rule requiring federal contractors to disclose expected salary ranges in job postings as part of the Biden administration’s heightened efforts to boost pay equity. As many employers and contractors operate in multiple jurisdictions, it is especially important to remain apprised of the increasing obligations in the pay transparency world. Below, PilieroMazza provides a brief review of both the recent D.C. legislation and the FAR Council’s proposed rule.
District of Columbia
On January 12, 2024, D.C. Mayor Muriel Bowser signed the Wage Transparency Omnibus Amendment Act of 2023 (Act). The legislation is currently in a 30-day congressional review period in which Congress may vote to overrule it. Assuming there is no veto vote, the legislation is drafted to go into effect on June 30, 2024.
The law requires D.C. employers to:
- provide the minimum and maximum projected salary or hourly pay in all D.C. job listings and position descriptions advertised; and
- disclose to prospective employees the existence of healthcare benefits that employees may receive before the first interview.
The new law also expands on protections regarding employee pay history. Specifically, D.C. employers are now prohibited from screening prospective employees based on their salary history and from asking the prospective employee’s prior employer for the candidate’s wage history. Employers are also prohibited from retaliating against employees who discuss their compensation. Covered employers must post a notice to employees of their rights under the Act.
The D.C. pay transparency law is similar to other state laws recently enacted over the past several years, requiring employers to post salary ranges in job postings, among other things. States with current effective laws include California, Colorado, New York, Washington, and Hawaii—and a new law is set to take effect in Illinois next year. Several other states, such as Massachusetts, are pushing to pass comparable legislation.
FAR Proposed Rule
The FAR Council’s proposed rule will be open for public comment for 60 days and will be published in the Federal Register on or about April 1. The Department of Labor’s Office of Federal Contract Compliance Programs, which enforces contractors’ affirmative action and nondiscrimination obligations, is expected to issue guidance to clarify existing protections to prevent hiring or pay bias.
The proposed rule would apply to all contracts and subcontracts with a principal place of performance within the United States and its outlying areas. As of now, the rule does not include a carve-out for acquisitions at or below the Simplified Acquisition Threshold, or acquisitions for commercial products and commercial services.
The rule shares many similarities with other pay transparency laws. By way of example, the proposed rule requires covered federal contractors to:
- disclose the compensation being offered to hired applicants in all job postings to perform work on or in connection with the contract;
- disclose a general description of the benefits and other forms of compensation applicable to the job opportunity; and
- provide applicants with a notice of their rights as either part of the job announcement or application process.
Similar to the D.C. law, the proposed rule also prohibits contractors from seeking an applicant’s compensation history either directly or indirectly.
