Fostering Pay Transparency In Your Organization

In case you missed it, as a Federal Contractor, you and your company are obligated to foster pay transparency by letting  your employees know their rights under the Pay Transparency Nondiscrimination Provision.   At a minimum you are required to include the provision in employee manuals and handbooks as well as post with other employee rights information.  The following is copied directly from the Department of Labor’s website and provides guidance to your obligations.

Office of Federal Contract Compliance Programs (OFCCP) 

Pay Transparency Nondiscrimination Provision

Every employer covered by Executive Order 11246, as amended, is required to post the Pay Transparency Nondiscrimination Provision and include it in employee manuals and handbooks. The provision provides applicants and employees notice that the employer will not discriminate against them for inquiring about, discussing or disclosing their pay or, in certain circumstances, the pay of their co-workers.

Because OFCCP believes that uniform use of the nondiscrimination provision is necessary to ensure consistency and clarity in the information provided to applicants and employees, contractors must, at a minimum, use the language provided in the nondiscrimination provision provided below to satisfy both dissemination requirements. Of course, nothing limits a contractor from providing additional information to their employees about their rights and obligations.

Posting Requirement

The posting requirement may be accomplished by posting the provision electronically or by posting a copy of the provision in conspicuous places available for employees and applicants. In order to facilitate the implementation of this requirement, OFCCP has created two versions of the nondiscrimination provision.

The first version is formatted to be posted electronically or printed and posted on the employer’s premises. It includes the OFCCP logo and contact information.

The second version includes the required, prescribed language only without formatting. At a minimum, contractors must use this prescribed language.

Employee Manuals and Handbooks

In addition to the posting requirement, employers covered by Executive Order 11246 must incorporate the nondiscrimination provision into their existing manuals or handbooks. Again, employers must, at a minimum, use the unformatted version.

Please note that this page provides general information. It is not intended to substitute for the actual law and regulations regarding the program described herein.

Note from Biddle:  Ensuring pay equity is a social and legal concern.  If you have potential concerns about pay equity in your organization or would like to know more about conducting a pay equity study, please feel free to give our experts a call or join us at the BCGi Summit where we will be diving into the intricacies of compensation (pay equity) analysis.

OFCCP Pay Transparency Final Rule – Audio Broadcast

As most contractors are aware, the final rule regarding pay transparency has been published and became effective since January 11, 2016.  In their continued effort to educate the federal contracting community, the OFCCP hosted a webinar to review the final rule and offer the chance to answer contractor questions. The first webinar registration filled up incredibly quickly, so the OFCCP announced an encore presentation of their webinar on January 28, 2016 at 2:00 EST. The registration for the second webinar filled up just as quickly as the first, and in an effort to accommodate the contractors that wish to attend, the OFCCP is broadcasting the audio for the webinar live.

To access the live stream, please click the following link:
http://event.on24.com/r.htm?e=1117642&s=1&k=94CF71D01B12CA1727E879A118230FB8

If you were unable to attend the first webinar and are also unable to stream the audio, you can read our blog on the key points from the first presentation: http://affirmativeaction.com/news/review-of-ofccp-pay-transparency-webinar/

If you have additional questions about the Pay Transparency regulation, feel free to contact us via e-mail at staff@biddle.com or toll-free at (800) 999-0438.

Review of OFCCP Pay Transparency Webinar

On Monday, January 11, the OFCCP hosted a webinar to review the final rule regarding pay transparency, which went into effect on the same day, January 11, 2016.  The final rule implements Executive Order 13665, which ensures that employees and applicants of federal contractors and subcontractors are able to freely discuss pay without fear of retaliation. The hope is that this will, in turn, help promote pay transparency.

To remain in compliance with the new regulations, contractors must make a few minor adjustments to items that should already be in place:

  • Update the equal opportunity clause included on your contracts and purchase orders to include the provision which prohibits employers from discriminating against employees or applicants who discuss or inquire about pay. This only applies if you utilize the entire equal opportunity clause. If you use the shortened version which incorporates EO 11246 by reference, then you do not need to change anything.
  • Define “compensation,” “compensation information,” and “essential job function” with respect to your organization
  • Incorporate the new pay transparency provision into your employee handbooks and other materials, including the policy statement in your affirmative action plan as well as on the company website (a PDF of the verbiage can be found here: http://www.dol.gov/ofccp/pdf/EO13665_PrescribedNondiscriminationPostingLanguage_JRFQA508c.pdf).
  • Post the EEO is the Law poster and supplement (http://www.dol.gov/ofccp/regs/compliance/posters/ofccpost.htm) in a conspicuous place within your organization.

Along with the black-and-white aspects of the final rule, the webinar also covered some grey areas concerning defenses a contractor can take with regard to discipline of an employee who discusses pay. Several hypothetical scenarios were introduced to illustrate these potential defenses. While each situation is different and there many nuances that may shift a scenario from ‘defensible’ to ‘indefensible,’ there are two rules to determine whether the contractor is justified in its disciplinary decision. First, the contractor must show that the employee had access to compensation information as a part of their essential job functions. Second, they must show that the employee disclosed the information to people who didn’t have access to it. If these two criteria are met, the contractor can make the argument that the employee disclosed confidential information and take whatever action they deem necessary. However, it doesn’t mean that the employer will always win that argument.

Again, given the nuance of all of the possible scenarios, it can be hard to determine whether a contractor will be justified in whatever disciplinary action it takes against an employee who discusses pay. The bottom line is that the final rule, while it seems to be more focused on the rights of the employee, also takes the concerns of the contractor into account, as the OFCCP recognizes that confidentiality of employee information is a primary concern for most employers.

Pay transparency is not a new concept. More than 80 years ago in 1935, the National Labor Relations Act was signed into law, protecting the rights of employees to, among other things, “engage in other concerned activities for the purpose of collective bargaining,” which by inference means that employees can discuss pay. However, the present rule not only places more emphasis on the fact that employees can discuss pay freely, it outlines specific provisions which should help both the employee and employer understand their respective rights regarding the discussion of such a sensitive topic.

To read more about the final rule, as well as access the pay transparency provision and EEO is the Law poster and supplement, please visit http://www.dol.gov/ofccp/PayTransparency.html, and the Frequently Asked Questions section of the OFCCP website (http://www.dol.gov/ofccp/regs/compliance/faqs/PayTransparencyFAQs.html).

Lastly, due to high demand, the Office of Federal Contract Compliance Programs (OFCCP) will host a second public webinar on January 28, 2016, on its final rule promoting pay transparency. During the webinar, presenters from OFCCP’s Division of Policy and Program Development and the Department’s Office of the Solicitor will provide an overview of the final rule, address questions received by the agency since the rule’s September publication, and illustrate the practical application of defenses provided in the rule through several hypothetical scenarios.

Register for the January 28, 2016 webinar introducing the general requirements of the OFCCP final rule on pay transparency at:
https://dolevents.webex.com/dolevents/onstage/g.php?MTID=e0dba28c08d053114706380b4940399ac

Pay Transparency Takes Effect on Monday, January 11

The OFCCP announced that they will be hosting a public webinar for its final rule regarding pay transparency on Monday, January 11, 2016 at 2:00PM EST. The final rule goes into effect on January 11, 2016 and implements Executive Order 13665, which ensures that employees and applicants of federal contractors and subcontractors are able to freely discuss pay without fear of retaliation, which in turn, will promote pay transparency. It also amends EO 11246 by requiring federal contractors to incorporate pay transparency into their existing nondiscrimination provision. The final rule also requires contractors to amend their equal opportunity clause, policy statements, employee handbooks, etc. to include the prescribed nondiscrimination language.

The webinar is a great opportunity for contractors and subcontractors to become familiar with the changes and ensure compliance. During the webinar, the OFCCP will review the final rule, provide hypothetical examples, and answer questions. If you are unable to attend the webinar, BCG will be publishing a blog with the key takeaways from the webinar.

To register for the January 11 webinar, follow the link below:
https://dolevents.webex.com/dolevents/onstage/g.php?MTID=ed75f4ff0dcf77fb3886cf540d39ec598