President Obama Wields His Executive Power Once Again to Target Federal Contractors on Pay Issues

by Cozen O'Connor
Contact

On April 8, 2014, President Obama took two significant actions in the employee pay arena. He  signed an Executive Order prohibiting federal contractors from retaliating against their applicants and employees for inquiring about, disclosing or discussing pay information. He also issued a Presidential Memorandum directing the U.S. Department of Labor (DOL) to issue new regulations requiring federal contractors to provide compensation data to the federal government, broken down by gender and race. President Obama signed these initiatives on National Equal Pay Day, the day that represents how long women need to work in the current year in order to catch up to the wages men earned in the previous year.  

What is the practical impact of these executive actions? The Obama administration wants to make it easier for applicants and employees of federal contractors to know and understand how their pay compares to that of others. Such transparency, which some employers historically have discouraged, allows applicants and employees to voluntarily inquire about, disclose and/or discuss pay information without fear of reprisal. As a result, applicants and employees of federal contractors should have improved access to often hard-to-obtain information that they may use to negotiate pay increases and/or to pursue pay discrimination claims. This push for transparency is consistent with the efforts of the National Labor Relations Board in recent years to crack down on employers covered by the National Labor Relations Act (NLRA) who discipline employees for exercising their rights to discuss terms and conditions of employment, including compensation, in person and/or via outlets such as social media. Notably, the Executive Order only applies to contracts entered into on or after the effective date of rules promulgated by the DOL to implement the Executive Order.

The impact of the Presidential Memorandum on the reporting of compensation data by gender and race is less clear. First, the DOL must create new rules defining what specific data federal contractors must report and the method in which the data must be reported. Second, federal contractors generally have been submitting certain compensation data, broken down by gender and race, for facilities audited by the DOL’s Office of Federal Contract Compliance Programs (OFCCP). Accordingly, while the administration hopes the data requirement will allow the government to obtain more robust and reliable compensation data, undertake targeted enforcement activities and promote voluntary compliance in equal pay practices, it’s too soon to determine with any certainty how this directive will affect federal contractors’ business practices.

With these executive actions, President Obama once again has demonstrated a willingness to act without Congress on pay issues. Earlier this year, President Obama signed an Executive Order raising the minimum wage to $10.10 per hour for workers employed by federal contractors. The increase in the minimum wage is scheduled to go into effect on January 1, 2015 and applies to all new federal contracts based on solicitations issued on or after that date. President Obama also recently directed the DOL to modernize the existing federal overtime regulations, an action that eventually will impact an even larger number of employers in the United States. Cozen O’Connor’s Alert on that directive can be accessed here.

These actions have been viewed as reflective of the Obama administration’s hope that employers who are not federal contractors will voluntarily increase their focus on equal pay in the workplace. The administration further is appealing to women voters with midterm elections taking place later this year. Finally, President Obama likely hopes that these actions will put pressure on Congress to pass the Paycheck Fairness Act, which would strengthen existing pay equity laws.   

More than 50 years after the passage of the Equal Pay Act of 1963, and subsequent laws and executive orders addressing pay disparities, equal pay for equal work remains elusive for some women, and for some minorities. So employers can be sure of one thing: pay issues will continue to be at the forefront of the legal and political arena for the foreseeable future.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Cozen O'Connor | Attorney Advertising

Written by:

Cozen O'Connor
Contact
more
less

Cozen O'Connor on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.