Tuesday, August 28, 2018

Rule Prohibiting Retaliation for Disclosure of Compensation Information Becomes Final

The FAR (Federal Acquisition Regulations) have converted an interim rule to a final rule, without change. This new rule, based on an Executive Order (EO) from the previous Administration prohibits Federal Contractors from discriminating against employees and job applicants who inquire about, discuss, or disclose their own compensation or the compensation of other employees or applicants. This rule applies to all contractors, both small (fewer than 500 employees) and large.

The regulation contains definitions of "compensation" and "compensation information" which are rather intuitive as you might expect (those definitions can be found in FAR  52.222-26(a)). The fundamental requirements of the regulation are these:

  1. The contractor shall 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.
  2. This prohibition against discrimination does not apply to instances in which an employee who has access to the compensation information of other employees or applicants as 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.
  3. The contractor shall disseminate the prohibition on discrimination to employees and applicants by incorporation into existing employee manuals or handbooks and electronic posting or by posting a copy of the provision in conspicuous places available to employees and applicants for employment.

We suppose that this regulation was a nod to some interest group but we have never heard of an instance where an employee or applicant was discriminated against for disclosing compensation information.We were kind of surprised that the current administration let this interim rule become final but perhaps it was the easiest path and its a "do-nothing" regulation. But in the current environment with the Section 809 Panel trying to weed out useless procurement regulations, it would have been a logical one to drop.

Contractors, don't forget to disseminate this new prohibition.

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