President Obama Takes Executive Action on National Equal Pay Day

by Littler

On April 8, 2014, the President signed an Executive Order prohibiting federal contractors from retaliating against employees who choose to discuss their compensation. The President also issued a Memorandum instructing the Secretary of Labor to establish new regulations requiring federal contractors to submit to the Department of Labor (DOL) summary data on compensation paid to their employees, including data by sex and race. These executive actions were issued on Equal Pay Day, and implement the less drastic provisions of the Paycheck Fairness Act for federal contractors, which failed to advance in the Senate.1

Executive Order

The President's Executive Order amends Executive Order 11246 to add language prohibiting federal government contractors from discharging or discriminating against employees or applicants because they inquire about, discuss, or disclose their compensation or the compensation of another employee or applicant. However, the Order states that this protection does not extend to employees who have access to the compensation information of other employees or applicants as an essential function of their job and disclose such information to individuals who do not have similar access. The Order also directs the Secretary of Labor to propose regulations to implement these requirements within 160 days.

Presidential Memorandum

The President's Memorandum directs the Secretary of Labor to propose, within 120 days, a rule that would require federal government contractors and subcontractors to submit to the DOL summary data on the compensation paid to their employees, including data by sex and race. 

Over the past several years, the DOL's Office of Federal Contract Compliance Programs (OFCCP) has been developing a new data collection compensation tool that would identify contractors likely to engage in sex- and race-based compensation discrimination.  On August 20, 2011, the DOL published an Advanced Notice of Proposed Rulemaking2 (ANPRM) soliciting input from the public on the development and implementation of a compensation data collection tool. The ANPRM drew over 2,000 comments, including several from the employer community questioning the effectiveness of a generic tool for collecting compensation data due to the numerous factors that are taken into consideration when setting individual employee compensation. The comments further expressed concern that the data collection requirement would result in an undue burden to contractors. 

These concerns were validated in a report3 issued by the National Research Council arm of the National Academy of Sciences in August 2012. At the suggestion of the National Equal Pay Task Force created by President Obama, the U.S. Equal Employment Opportunity Commission (EEOC) requested that the National Research Council's Committee on National Statistics assemble a panel to review methods for measuring and collecting pay information by gender, race and national origin from employers for the purpose of administering the equal pay provisions of Title VII of the Civil Rights Act of 1964, as amended. The panel ultimately concluded that the collection of earnings data would be a significant undertaking for the EEOC, as neither it nor the OFCCP had a comprehensive plan regarding the form of data collection. The panel further concluded that a data collection tool could unduly burden employers depending upon the structure of the data collection tool, but that its assessment was limited by the fact that the EEOC and OFCCP had not articulated a plan for using earnings data after collecting it. Accordingly, the panel recommended that the EEOC, the OFCCP and the Civil Rights Division of the U.S. Department of Justice prepare a comprehensive plan for the use of earnings data before initiating any data collection. In conjunction with preparing a comprehensive plan, the panel recommended that the EEOC enhance its capacity to summarize and analyze earnings data and to collect data on rates of pay, not actual earnings or pay bands, in a manner that permits the calculation and measurement of both the average and the variability and spread of pay rates. 

The panel further recommended that the agencies initiate a pilot study to test the data collection tool and the plan for using the data after it is developed. The panel stated that the pilot study should measure the resulting data quality, fitness for use in the comprehensive plan, cost, and burden on the respondents. 

Finally, the panel made recommendations to the EEOC regarding protecting confidential earnings data it would collect, such as implementing appropriate data protection techniques and supporting research for the development of data protection applications. In addition, the panel recommended that the EEOC pursue legislation to increase the ability of the agency to protect confidential data and authorize data sharing among other agencies with legislative authority to enforce antidiscrimination laws.

Interestingly, the President's Memorandum includes detailed instructions to the Secretary of Labor regarding development of a data collection tool which closely track the primary issues raised in the comments to the ANPRM and the National Research Council's findings. In his Memorandum, the President directs the Secretary of Labor to consider approaches that: minimize the burden on federal government contractors and subcontractors when developing the proposed data collection tool; maximize efficiency and effectiveness by enabling the DOL to direct its enforcement resources towards entities for which reported data suggest potential discrepancies in worker compensation, and not toward entities for which there is no evidence of potential pay violations; and use the data collected to encourage employers to voluntarily comply with federal pay laws and to identify and analyze industry trends. The President further instructs the Secretary to avoid new record-keeping requirements and rely on existing reporting frameworks to collect the summary data. Also, as recommended by the National Research Council, the President directs the Secretary of Labor to consider independent studies regarding the collection of data compensation when developing his proposed rules. 

While it is highly likely that the President's instructions to the Secretary of Labor regarding the factors to consider when developing a data collection tool are the result of comments received in response to the ANPRM and the findings of the National Research Council's study, the burden that this new data collection tool will impose upon contractors remains to be seen. Despite the fact that a data collection tool has been on the DOL's agenda for years, little progress has been made toward developing a comprehensive plan prior to issuance of the President's Memorandum.4

What Next?

Until the DOL responds to the executive actions, there is not much for federal contractors to do but wait and see. However, to the extent federal contractor/subcontractor employers have policies prohibiting employees from sharing compensation data, they would be advised to consider the implications of the new requirement, review these policies, and determine how best to make the necessary changes to the policies.

1 See Ilyse Schuman, Senate Once Again Blocks Paycheck Fairness Act, Littler's Workplace Policy Update (Apr. 9, 2014),; Michael J. Lotito and Ilyse Schuman, President Obama Poised to Enact Provisions of Paycheck Fairness Act Through Executive Action, Littler's Workplace Policy Update (Apr. 7, 2014),

2 76 Fed. Reg. 49,398 - 49,401 (Aug. 10, 2011), available at

3 Collecting Compensation Data from Employers (The National Academies Press 2013), available at

4 A Workplace Policy Institute® Insider Briefing interview with Joshua Roffman about the pay initiatives discussed in this article is available here:

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.

© Littler | Attorney Advertising

Written by:


Littler 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.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

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.


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 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:

- 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.