President Takes Action Meant to Increase Pay Equity for Employees of Federal Contractors

Today, Pillsbury attorneys Julia Judish and Keith Hudolin published their advisory titled President Takes Action Meant to Increase Pay Equity for Employees of Federal Contractors. The Advisory discusses the April 8, 2014 Executive Order and Presidential Memorandum issued by President Obama aimed at “closing the persistent pay gap for women and minorities,” at least for employees of federal contractors and subcontractors. These two executive actions direct the Department of Labor to issue new regulations that will (i) prohibit government contractors from retaliating against employees and applicants for asking about, disclosing, or discussing their compensation with other workers, and (ii) require contractors to report summary compensation data for their employees, by sex and race, to the Department of Labor. By limiting the reach of these measures only to employers that are government contractors, President Obama was able to act on his own executive authority, without needing the cooperation of Congress. Because government contractors comprise approximately a quarter of the U.S. workforce, these new regulations will directly affect a significant portion of employers, and may also have a ripple effect that extends even to wholly private-sector employers.