Last chance! The deadline to comment on the Interim Rule that adds pay transparency language to government contracts is this coming Tuesday, November 29.
On September 30, 2016, the U.S. Department of Defense, General Services Administration, and National Aeronautics and Space Administration issued an interim rule called “Non-Retaliation for Disclosure of Compensation Information,” which amends the Federal Acquisition Regulations to implement Executive Order 13665.
As we’ve discussed in previous posts, the EO prohibits federal contractors from discriminating against employees and applicants who ask about or discuss compensation. The Office of Federal Contract Compliance Program’s Final Rule implementing the Order (known as the “Pay Transparency Rule”) became effective January 11, 2016. In addition to providing protection to employees who ask about or discuss compensation, the Pay Transparency Rule also requires federal contractors to notify employees and applicants of their rights to discuss compensation by requiring mandatory language in employee handbooks and postings.
The Interim Rule amends the Federal Acquisition Regulations to add mandatory language to all government contracts describing the obligations under the Pay Transparency Rule.(The FAR dictate the language to which contractors are required to agree when competing for government contracts.) Among other minor changes, the Interim Rule adds language to covered government contracts defining “compensation,” “compensation information,” and “essential functions.” It also includes a dissemination clause and a provision stating the following (which mirrors the EO’s mandate):
The Contractor shall not discharge or in any other manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. This prohibition against discrimination does not apply to instances in which an employee who has access to the compensation information of other employees or applicants as part of such employee’s essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the Contractor’s legal duty to furnish information.
Because it was issued pursuant to the interim rule process, the Interim Rule went into effect immediately without prior opportunity for public comment. The Department of Defense, the GSA, and NASA asserted that it was necessary to use the interim rule process to ensure that the pay transparency language was incorporated into contracts immediately so that contractors would not be “put at unnecessary risk of non-compliance with the E.O. and labor rule.”
The Interim Rule is already effective, but, again, public comments will be accepted through Tuesday, November 29. Comments may be submitted online or by mail.
This is Constangy’s flagship law blog, founded in 2010 by Robin Shea, who is chief legal editor and a regular contributor. This nationally recognized blog also features posts from other Constangy attorneys in the areas of immigration, labor relations, and sports law, keeping HR professionals and employers informed about the latest legal trends.
