Labor Department Releases Proposed Rules Ordering Federal Contractors to Report Equal Pay Data

 WASHINGTON (PAI)–Implementing Democratic President Barack Obama’s prior executive order, the Labor Department unveiled proposed rules ordering federal contractors to report gross pay data broken down by race, color, religion, sex or national origin.


The objective of the rules, released for public comment starting on Sept. 17, is to use the financial leverage of federal contracts to force businesses that get government work to pay all employees equally for equal work.


It also would give the workers information they can use to bargain for equal pay, said Debra Carr, policy director of the department’s Office of Federal Contract Compliance.  OFCCP enforces equal pay laws.


“Workers cannot solve a problem unless they are able to identify it. And they cannot identify it if they aren’t free to talk about it without fear of reprisal,” said OFCCP Director Patricia Shiu.  “Pay transparency isn’t just good for workers.  It’s good for business.  Fairness and openness are great qualities for a company’s brand.”


The proposed rule, if adopted, “is expected to result in increased wage payments to employees,” Carr’s Federal Register notice says.


“This may be the result of employees using the information they receive about the compensation paid to others to pursue increased wage payments.  Employers may either voluntarily increase wages or be required to do so through actions taken by employees.  These higher wage payments may, in some instances, result in net costs to covered contractors.”


Carr’s notice also warned contractors that they “must not discriminate because of race, color, religion, sex, sexual orientation, gender identity, national origin, disability, or status as a protected veteran.”  And she added that right now they “must also engage in affirmative action and provide equal employment opportunity without regard to race, color, religion, sex, national origin, disability, or status as a protected veteran.”


DOL issued the proposal, following up on Obama’s order, just two days after the Senate, for the second time this year, failed to break a Republican filibuster against the Paycheck Fairness  Act, legislation that would have given the 1963 Equal Pay Act teeth – and complaining workers more protection and paths to seek justice (see separate story).


The paycheck fairness bill, now dead for this Congress, would have applied to virtually every workplace.  The DOL’s rules apply only to workplaces holding federal contracts worth at least $10,000: All private firms, from fast food restaurants at military bases to construction companies on road projects to major defense contractors.  But federal contractors of all types employ a hefty share of the U.S. workforce, male and female.


Carr cited calculations from the Institute for Women’s Policy and Research (IWPR) showing closing the pay gap would also help reduce U.S. poverty.  Currently, the median woman worker earns between 77 and 82 cents, depending on the calculation, for every dollar the equivalent median working man earns.


The pay gap separating unionized working women from equivalent unionized working men is a dime, Bureau of Labor Statistics data show.


The IWPR research reports the poverty rate for all working women would decline from 8.1 percent now to 3.9 percent, if all working “ womenwere paid the same as men who were similar in terms of their education and hours of work,” Carr’s Federal Register notice says.


“The high poverty rate for working single mothers would fall by nearly half, from 28.7 percent to 15 percent.  For the 14.3 million single women living on their own, equal pay would mean a significant drop in poverty from 11 percent to 4.6 percent.  Nearly 60 percent (59.3 percent) of women would earn more if working women were paid the same as men of the same age with similar education and hours of work. “


Carr admitted that Obama’s executive order and her agency’s proposed rules, if adopted, would not close the entire pay gap.  That’s because contractors are only a subset of all U.S. employers, and her agency’s proposal would not have them submit worker-by-worker paycheck data, but gross workforce pay data, broken down by gender.


Carr noted private firms still ban workers from discussing pay – a ban the Paycheck Fairness Act would have outlawed.  “If compensation remains hidden, employees unfairly paid less because of their gender or race will remain unaware of the problem and unable to exer-cise their rights by filing a complaint,” she said.  IPWR reported 51 percent of female workers and 47 percent of male workers reported employers discouraged or banned talking about pay.  Barriers to talks “were much more common among private employers,” Carr said.

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