Legal Blog

Labor & Employment ALERT – Equal Pay Day And Obama’s Executive Orders

 

April 8th was designated as Equal Pay Day and President Obama used the occasion to take two executive actions which are in line with the special focus the White House has placed on women’s issues and strengthening enforcement of equal pay laws for women. First, President Obama will sign an executive order banning federal contractors from retaliating against employees who discuss their compensation. The order does not require employers to publish pay data, but it does encourage pay transparency, which will enable workers to more easily discover violations of equal pay laws and find appropriate remedies. While it is difficult to quantify how frequently employees are retaliated against for discussing compensation, a 2011 Institute for Women’s Policy Research study found that about half of all workers report the discussion of salary information is prohibited by employers. Second, the President will sign an executive memorandum instructing DOL Secretary Tom Perez to establish new regulations requiring federal contractors to submit to the Department summary data on compensation paid to their employees, including data broken down by sex and race. The DOL will use the data to encourage voluntary compliance with equal pay laws and, through more effectively focused efforts, enable targeted enforcement where there are discrepancies, according to the White House. These two executive actions are in line with the special focus the White House has recently placed on women’s issues and forecasts the Senate’s upcoming consideration of the Pay Fairness Act, which would require all companies to prove that pay differences among men and women are due to factors independent of gender. It would also raise penalties for those found to be in violation, expand the opportunity for gender based class-action lawsuits and mandate that the DOL begin collecting data on gender and wages. The trend seems clear – more intense scrutiny of corporate compensation and more targeted, aggressive enforcement, especially as these relate to discrimination against women.

 

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