In the latest Weekly Wright Report:
New Regulations Issued Prohibiting the Federal Government and Federal Contractors from Considering Pay History in Making Salary Determinations
On January 30, 2024, the Office of Personnel Management issued final regulations governing the criteria for making salary determinations based on salary history to advance pay equity in the General Schedule, prevailing rate, and other professional pay systems. Federal agencies are no longer able to set pay based on a job candidate’s salary or pay history. The final rule is effective April 1, 2024 and all Federal agencies must be in full compliance with the final rule no later than October 1, 2024.
The new regs are intended to implement Executive Orders (E.O.) 14035 (86 FR 34593) and 14069 (87 FR 15315) issued by President Biden which deal with pay equity and transparency and diversity, equity, and inclusion in the Federal Workforce. The White House believes that salary history is not necessarily a good indicator of worker value, experience, and expertise, and that it also may contain or exacerbate biases. “Pay setting based on salary history may be inequitable, can perpetuate biases from job to job, and may contribute to a pay gap between the earnings of men and women.”
Under the new regs, the Federal agencies are no longer allowed to set pay based on non-Federal salary history, which could vary between equally qualified candidates. Agencies are also not permitted to consider a candidate’s competing job offer when setting pay.
In addition, on January 30, 2024, FAR Regulatory Council issued a proposed new regulation to prohibit federal contractors and subcontractors from seeking and considering information about job applicants’ compensation history when hiring or setting pay for personnel working on or in connection with a government contract. In addition, the proposal would require federal contractors and subcontractors to disclose expected salary ranges in job postings. Comments on the proposed regs are due on or before April 1, 2024.
If you have any questions regarding the matters addressed herein, please contact any member of the WCS Government Contracts practice group.