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Executive Order 11246: Pay Transparency Regulations

On September 11, 2015, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) published a Final Rule revising the regulations implementing Executive Order 11246, as amended at 41 CFR Part 60‐1 to protect employees who inquire about compensation from discrimination. More specifically, the regulations prohibit federal contractors and subcontractors from discharging or otherwise discriminating against their employees and job applicants for discussing, disclosing, or inquiring about compensation. The regulations became effective on January 11, 2016, and apply to all covered contracts entered into or modified as of that date.

Highlights of the Regulations

  • Revision of the EO Clause: The regulations require that the equal opportunity clause included in covered federal contracts and subcontracts be amended to include that federal contractors and subcontractors must refrain from discharging, or otherwise discriminating against, employees or applicants who inquire about, discuss, or disclose their compensation or the compensation of other employees or applicants. An exception exists where the employee or applicant makes the disclosure based on information obtained in the course of performing his or her essential job functions;
  • Incorporation into Employee Manuals: The regulations require that federal contractors incorporate a prescribed nondiscrimination provision into their existing employee manuals or handbooks and disseminate the nondiscrimination provision to employees and to job applicants;
  • Definitions of Key Terms: The regulations define key terms such as compensation, compensation information, and essential job functions as used in EO 11246, as amended; and
  • Contractor Defenses: The regulations provide contractors with two defenses to an allegation of discrimination: a general defense, which could be based on the enforcement of a “workplace rule” that does not prohibit the discussion of compensation information; and an essential job functions defense.

Read the Regulations and Executive Order 11246, as amended

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