Tag Archives: equal pay

Pay Transparency On The Horizon For Federal Government Contractors

Certain federal government contractors who enter into new federal contracts or subcontracts, or modify existing covered contracts on or after January 11, 2016, will have to comply with a new pay transparency rule. The covered contractors are those that hold a single federal contract, subcontract or federally assisted construction contract in excess of $10,000.00, have federal contracts or subcontracts that have a combined total in excess of $10,000.00 in any 12 month period, or hold government bills of lading, serve as depositories of federal funds, or are an issuing and paying agency for U.S. Savings Bonds and Notes in any amount.

The new pay transparency rule will prohibit employers from discharging or discriminating against employees or applicants who inquire about, discuss, or disclose their own compensation or the compensation of another employee or applicant. Additionally, the rule requires that employers post and disseminate a policy, explaining employees’ rights to discuss their compensation. The rule applies to all employees, including supervisors and managers.

The rule sets forth two defenses for employer’s accused of violations: The “workplace rule” defense and the “essential job functions” defense.

The workplace rule defense applies where a contractor disciplines an employee for a violation of a consistently and uniformly applied workplace rule. For example, an employee who publishes confidential business information to a third party could be disciplined for violating a rule prohibiting the publication, even if the publication included compensation information.

The essential job functions defense applies to employees who have access to compensation information and disclose that information to individuals who do not otherwise have access to the information. This defense will likely apply to employees who work in human resources or employee benefits that have access to compensation information as part of their essential job functions. The employees would not be protected by the pay transparency rule if they disclose or discuss compensation information obtained through the performance of their job.

Covered federal government contractors should begin taking steps to comply with the new pay transparency rule. These steps should include drafting a policy which complies with the rule and educating their managers and supervisors on what conduct is protected under the rule.

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EEOC Equal Pay Directed Investigation

Recently I attended a presentation given by Shirley Richardson, the Deputy Director for the EEOC – Memphis District. Ms. Richardson focused on the EEOC’s current Strategic Initiatives. I previously wrote about those initiatives here.

One of the EEOC’s Strategic Initiatives is enforcing equal pay laws. One method the EEOC can use to enforce equal pay laws is an Equal Pay Directed Investigation. A Directed Investigation can be conducted without an EEOC Charge being filed.

Basically, the EEOC will send a letter to the employer stating that it is conducting an investigation and will ask to review the pay records for male and female employees. The Directed Investigation is similar to an audit by the Department of Labor, but the focus is on whether discrimination has occurred on the basis of gender.

Employers should conduct an internal audit of their payroll records to ensure that men and women are paid equally for equal work. Discrepancies in pay between men and women must be tied to legitimate, non- discriminatory reasons which are applicable to the job. These reasons could include differences in education, experience and seniority.

The failure to conduct an internal equal pay audit may result in problems for the employer if it faces an EEOC Charge or Directed Investigation. Be proactive and conduct the audit now to avoid problems in the future.

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What to expect from the EEOC in 2013

Late last month the EEOC issued its Strategic Enforcement Plan for 2013.  The Plan sets forth 6 priorities:

1. Eliminating Barriers in Recruitment and Hiring;

2. Protecting Immigrant, Migrant and Other Vulnerable Workers;

3. Addressing Emerging and Developing Issues;

4. Enforcing Equal Pay laws;

5. Preserving Access to the Legal System; and

6. Preventing Harassment Through Systemic Enforcement and Targeted Outreach.

Based on these priorities I recommend employers take the following steps:

1. Conduct an internal “equal pay audit” to ensure that male and female employees are being paid the same for equal work;

2. Conduct anti-harassment training for your entire workforce;

3. Conduct an internal audit of your compliance with immigration laws, including Form I-9, and;

4. Conduct an internal audit to ensure that there are not discriminatory differences in pay for any employees.

Any issues that are discovered should be corrected.

Happy New Year!

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