Department of Labor’s “Pay Transparency” Regulations Now Effective

On January 11, 2016, the Department of Labor’s (“DOL”) regulations promoting pay transparency and openness became effective. These regulations apply to covered federal contractors and subcontractors and amend Executive Order 11246 to prohibit discrimination against employees and applicants who choose to inquire about, discuss or disclose their own compensation or the compensation of another employee or applicant.

New Obligations Related to Pay Transparency

Executive Order 11246 already prohibited discrimination by federal contractors and subcontractors based on race, color, religion, sex, sexual orientation, gender identity and national origin. Following these latest amendments, Executive Order 11246 now prohibits discrimination related to compensation. Specifically, employees cannot be disciplined, harassed, demoted, terminated or otherwise discriminated against, and applicants cannot be denied employment because they ask, discuss or disclose their own compensation or the compensation of other employees or applicants. Additionally, employers are prohibited from maintaining policies that prohibit or tend to restrict employees or applicants from discussing or disclosing their compensation or the compensation of others.

The amendments also require that all government contracting agencies include in every government contract entered into or amended after the January 11, 2016 effective date, a provision outlining the contractor’s nondiscrimination obligations as they relate to pay transparency.

The amendments provide limited defenses to covered employers that take adverse employment action against employees who disclose or discuss pay. For example, an employer will not violate the amended Executive Order for disciplining an employee who discloses the compensation of other employees or applicants when that employee has access to such information as a part of his or her essential job functions.

Leech Tishman’s Employment Practice Group has extensive experience advising clients on their obligations under Executive Order 11246 and is available to assist you if your organization has questions about coverage under the amended Executive Order or its obligations thereunder.