Final rule issued about pay transparency for federal government contractors

On September 11, 2015, the Office of Federal Contract Compliance Programs (OFCCP) issued a final rule that prevents government contractors from having pay secrecy or confidentiality policies. Specifically, the rule prohibits discharging or otherwise discriminating against an employee or applicant because the employee or applicant inquired about, discussed, or disclosed the compensation of the employee or any other employee. But the rule allows contractors to require human resources personnel (who have access to employee compensation information as part of their job responsibilities) to keep such compensation information confidential.

The new rule goes into effect on January 1, 2016, and is estimated to affect about one quarter of the American workforce. (Federal government contractors employ an estimated 22% of the American workforce.)

The rule was issued pursuant to President Barack Obama’s Executive Order 13665 issued on April 8, 2014. In news reports, this order has been referred to as a requirement for pay transparency.