Employment Law Alert – New Pay Transparency Requirements for Federal Contractors
January 28, 2016
NEW PAY TRANSPARENCY REQUIREMENTS FOR FEDERAL CONTRACTORS
If you are a federal contractor with contracts in excess of $10,000 that were entered into or modified on or after January 11, 2016, new regulations concerning pay transparency apply to you. On that date, Executive Order 13665 became effective. This new rule prohibits federal contractors from discharging or discriminating against an employee or applicant “because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant.” While this Executive Order may be new, the NRLB has long recognized that prohibiting or retaliating against an employee for sharing compensation information or inquiring about compensation is a violation of Section 7 of the NLRA.
Despite the change, compliance with the new Office of Federal Contract Compliance Programs (OFCCP) rule is relatively simple. Federal contractors who are covered by this new rule should complete the following three steps:
Incorporate the Executive Order’s prohibition against discrimination for inquiring about, disclosing, or discussing pay information into their covered contracts and subcontracts.
Include the following OFCCP-prescribed language in their employee handbooks:
Pay Transparency Policy Statement
The contractor will not discharge or in any other manner discriminate against employees or applicants because they have inquired about, discussed, or disclosed their own pay or the pay of another employee or applicant. However, employees who have access to the compensation information of other employees or applicants as a part of their essential job functions cannot disclose the pay of other employees or applicants to individuals who do not otherwise have access to compensation information, unless the disclosure is (a) in response to a formal complaint or charge, (b) in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or (c) consistent with the contractor’s legal duty to furnish information.
Disseminate the nondiscrimination provision to employees and applicants. This can be done by posting the statement in conspicuous places or providing it electronically. However, simply placing the “Pay Transparency Policy Statement” in the employee handbook is insufficient; this statement must also be posted or provided electronically.
QUICK REMINDER: EMPLOYEE TRANSPORTATION BENEFITS
In the December Alert, we mentioned that as of January 1, 2016, businesses employing 20 people or more in the District of Columbia must begin offering commuter benefit transportation subsidies to their employees. This new mandate is a result of the Sustainable DC Omnibus Amendment Act of 2014. If you have not done so, it is important to implement these policies as quickly as possible. Employers must provide at least one of three benefits programs. These include a set-aside pre-tax fund program, an employer-paid benefit program and employer-provided transportation.
As of December 18, 2015, the Protecting Americans from Tax Hikes Act (PATH) made the monthly limit on qualified transportation benefits for public transportation equal to the monthly limit applicable to parking benefits. This means that the limit on commuting benefits that could be provided tax free to employees will be $255 per month. This increase amounts to an additional $1500 that can be received tax free over the course of a calendar year. Employers in Washington, DC should be sure that their new or existing plans reflect this increase and should also ensure that employees have the opportunity to change their elections (if necessary).
QUICK REMINDER: WAGE RATE INCREASES
Effective January 1, 2016, the 2016 Living Wage for contractors of the District of Columbia Government is $13.84/hour. The new minimum wage in West Virginia is $8.75/hour. The new wage rate for Federal contractors is $10.15/ hour. Accordingly, the DOL has revised the Federal Minimum Wage for Contractors Poster to reflect the 2016 rates. It is available for download and printing here.
The contents of this Alert are for informational purposes only, and do not constitute legal advice. If you have any questions about this Alert, please contact a member of the Shulman Rogers Employment and Labor Law Group or the Shulman Rogers attorney with whom you regularly work.