Contractors Cannot Discriminate Against Employees Who Chat About Their Compensation

Yesterday we brought you the first installment on the new regulations that prevent discrimination on the basis that contractor employees decide to chat about the compensation levels. If you missed it, click here to begin your reading.  The idea behind the President's Executive Order (EO) was that if employees know how much each other makes, the pay disparity that exists between men and women performing the same work, will narrow and perhaps reach parity. No one really knows whether such prohibitions will have an impact. By the Government's own admission, it is based on untested theories. Additionally, no one has come forth with even anecdotal evidence that employees have been discriminated against for divulging their compensation level to fellow employees. Regardless, Government contractors have a new set of regulations to deal with.

The salient part of the new regulation reads:

(3) The contractor will not discharge or in any other manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. This provision shall not apply to instances in which an employee who has access to the compensation information of other employees or applicants as a part of such employee's essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the contractor's legal duty to furnish information.

Contractors must post in conspicuous places, available to employees and applicants for employment, notices to be provided by the contracting officer setting for the provisions of this nondiscrimination clause.

If there is ever an allegation of discrimination, contractors must furnish all information required by the rules, regulations, and orders of the Secretary of Labor and will permit access to its books, records, and accounts by the contracting agency and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, regulations, and orders.

If a contractor becomes noncompliant with these rules, the contracting officer may cancel, terminate, or suspend the contract and the contractor may be declared  ineligible for further Government contracts. That doesn't seem likely to happen, but it is part of the regulations.

There is more to these new regulations than we can cover here. For more information, click here for the complete rules.