On September 15, 2014, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) announced a proposed rule that would prohibit federal contractors from enforcing pay secrecy policies. The proposed rule would bar federal contractors and subcontractors from discriminating against, by firing or otherwise, any employee or job applicant for discussing, disclosing, or inquiring about their own compensation or the compensation of others. The proposed rule also adds definitions for terms utilized, including “compensation,” “compensation information,” and “essential job functions.” This proposed pay transparency rule is the result of Executive Order 13665, an order that President Obama signed on April 8, 2014, instructing the secretary of labor to propose a rule requiring pay transparency for federal contractors.

As OFCCP Director Patricia A. Shiu explained, “[p]ay transparency isn’t just good for workers. It’s good for business. Fairness and openness are great qualities for a company’s brand.” The Department of Labor echoed these statements on a fact sheet regarding the proposed rule stating, “[e]nabling more than 28 million employees of Federal contractors and subcontractors to discuss their compensation without fear of adverse action can contribute to reducing pay discrimination and ensuring that qualified and productive employees receive fair compensation.” On September 17, 2014, the proposed rule was published in the Federal Register. Public comment is open for 90 days following the publication.