Biden Administration Issues Executive Orders Advancing Pay Equity

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The President has issued two Executive Orders to promote equal pay for federal contractor employees and the federal workforce. To implement these orders, the Biden Administration has introduced measures focused on pay equity and transparency, including proposed revisions to the Federal Acquisition Regulation (FAR). These revisions tackle wage discrepancies by forbidding contractors and subcontractors from requesting or considering applicants’ salary histories for particular roles.

• The FAR Council has suggested a rule that would bar federal contractors and subcontractors from soliciting or considering candidates’ salary histories during recruitment. Comments on the proposed FAR regulation are open until April 1, 2024. If enacted, this regulation would prohibit contractors from using past compensation as a screening factor or basis for salary decisions, regardless of whether applicants provided the information voluntarily. The proposal also includes a mechanism for enforcement, allowing applicants to file complaints against non-compliant contractors or subcontractors, with appropriate actions to be taken by the relevant agency. Furthermore, the proposal requires federal contractors to disclose expected salary ranges in job listings.
• Additionally, the Office of Personnel Management (OPM) has finalized a rule to help ensure that federal agencies will no longer factor in an individual’s current or past pay when determining federal employee salaries. Under the final regulation, federal agencies cannot consider an applicant’s non-federal salary history when setting pay for new employees in the General Schedule, Prevailing Rate, Administrative Appeals Judge, Administrative Law Judge, Senior Executive Service, and senior-level and scientific or professional pay systems. This rule is meant to stop pay discrimination by ensuring that salaries are based on applicants’ skills, experience, and expertise rather than their salary history.

These initiatives aim to promote economy, efficiency, and effectiveness in federal contracting while fostering talent diversity, enhancing job satisfaction, and reducing turnover within the federal contractor workforce. However, the proposed rule raises concerns and uncertainties regarding compliance with existing federal contracting rules. Therefore, contractors are advised to carefully monitor developments, review the full text of the proposed rule, and participate in the notice-and-comment process to ensure their understanding and compliance.