Imagine that you are a company with two openings for the same position. After selecting the two most qualified candidates, you offer each candidate a salary equal to his or her prior salary, plus 5%, pursuant to your established policy for setting new hire salaries. On its face, your policy has nothing to do with sex, but does it violate the Federal Equal Pay Act? This was the issue addressed by the Ninth Circuit Court of Appeals in the recent decision Rizo v. Yovino, No. 16-15372, slip op. at 11–12 (9th Cir. Apr. 27, 2017).
In response to a presidential memorandum directing the Department of Labor (“DOL”) to collect summary compensation data from federal contractors and subcontractors to combat pay discrimination, the DOL’s Office of Federal Contract Compliance Programs (“OFCCP”) recently proposed a rule calling on certain federal contractors to submit reports on employee compensation. The rule, published in the Federal Register on August 8, requires covered contractors to annually submit an “Equal Pay Report.” Covered federal contractors and subcontractors are those who:
- File EEO-1 reports;
- Have more than 100 employees; and
- Hold federal contracts or subcontracts worth $50,000 or more for at least 30 days.
You’re Invited: Pay Equity Under The Obama Administration
Pay equity for women and minorities has been a priority throughout President Obama’s administration. President Obama has wielded his Executive power with increasing frequency in 2014. President Obama recently issued an Executive Order and a Presidential Memorandum that target the pay practices of federal contractors. Both actions are designed to increase transparency in employee compensation. They may have significant consequences for covered employers.