On Tuesday April 8, 2014, what is now known as National Equal Pay Day, President Obama took two executive actions aimed at narrowing the wage gap between men and women.
Noting that women are the primary breadwinners in 40% of U.S. Households, while bringing home 23% less than their male counterparts, the President signed a Presidential Memorandum which instructs the Secretary of Labor to propose regulations, within 120 days of the Memorandum, requiring federal contractors to submit summary data on employee compensation paid to their employees, including data by sex and race, to the Department of Labor. Those regulations would then require the Department of Labor to use that data in a way that would encourage an employers’ voluntary compliance with current equal pay laws, effectively focusing the Department’s efforts toward reducing discrepancies.
The President also signed an Executive Order prohibiting federal contractors from retaliating against employees who choose to discuss their compensation among their co-workers. This Executive Order amended Executive Order II246 of September 24, 1965 with the goal of encouraging pay transparency between male and female employees so that workers have the ability to discover violations of equal pay laws and are able to seek appropriate remedies for those violations. However, the Executive Order does not require employers to publish wage rates or compel workers to discuss pay. Under this Executive Order, the Secretary of Labor has 160 days to propose regulations in conformance with the President’s directive.
These actions come ahead of the U.S. Senate’s consideration of the Paycheck Fairness Act, which would amend equal pay laws by barring all employers, not just federal contractors, from punishing employees who discuss their wages. The President has pushed for Congress to pass this Act to ensure the standards he set forth in the Executive Order are applied to all employers covered by the Fair Labor Standards Act.
Stay tuned for updates on the Secretary of Labor’s proposed regulations and the progression of the Paycheck Fairness Act, both of which could have significant impacts on employee’s rights with respect to transparency of their employer’s pay practices.