January 30, 2024 – On January 29, 2024, the Biden Administration announced two new measures aimed at eliminating gender and racial gaps in average earnings among employees of the federal government and federal contractors.

First, the Biden Administration has directed the Office of Personnel Management (OPM) to issue a final rule prohibiting the use of non-federal salary history in pay-setting decisions for new federal employees. This rule, which will affect more than 80 federal agencies, reflects a belief that an employee’s salary history may reflect discrimination, and so its consideration may unfairly reduce an employee’s pay. The OPM’s final rule is expected to be published imminently.

Second, and of greater relevance to many of our clients, the Biden Administration has directed the Federal Acquisition Regulatory (FAR) Council to issue a proposal applying a similar prohibition to federal contractors. Under the proposal, federal contractors can neither seek nor consider information about an applicant’s compensation history when setting pay.

In addition, under the FAR proposal, federal contractors would be required to include expected salary ranges in job postings.  The reasoning behind this measure is that increased salary transparency will mitigate wage gaps along gender and race lines.

It is important to note that the foregoing rules are not yet in effect and must be approved through the administrative process before they will become effective.

The Biden Administration’s latest efforts mirror those of a growing number of states with laws or executive orders addressing employers’ use of applicants’ salary history in pay-setting decisions and/or requiring salary ranges to be included in job postings. Currently, 21 states have enacted such measures, including California, New York, and Washington.

If you have any questions about these proposed rules, please feel free to contact the Kullman attorney(s) with whom you work.