The Department of Labor (DOL), through its office of OFCCP, issued a proposed rule yesterday to amend Executive Order 11246, which prohibits discrimination and other employment practices by federal contractors. The DOL issued the rule in response to an order by President Obama back in April calling for new regulations designed to close the pay gap among men and women, as well as minorities. Generally, the proposed Rule will require that any entity with a federal contract in excess of $10,000 must incorporate a mandatory non-discrimination provision informing employees that the company does not "discriminate against employees and applicants who inquire about, discuss, or disclose their own compensation or the compensation of another employee or applicant." The Rule will require modifying existing contracts that do not already contain such provisions.
In addition, federal contractors will be required to incorporate similar provisions into corporate handbooks, websites, and other electronic forums where other policies are disseminated to employees. Notably, the proposed Rule provides an exemption for compensation data that is made available through essential job functions, such as a payroll administrator or other administrator who is tasked with handling employee compensation; however, the scope of the defense is not detailed in the Rule. Finally, the DOL is "considering" making the protection of compensation discussions among employees to be a mandatory training topic. The DOL is currently taking comments from interested parties as to the proposed changes. These proposed changes are similar to current enforcement standards being imposed by the National Labor Relations Board, which applies to a business regardless of whether it has a federal contract.