On April 8, 2014, President Obama signed an executive order to “promote economy and efficiency in Federal Government Procurement[.]” The Executive Order, “Non-Retaliation for Disclosure of Compensation Information[,]”amends Executive Order 11246 covering Equal Employment Opportunity, to include a paragraph prohibiting retaliation against employees of federal contractors who disclose, discuss, or inquire about compensation. The new paragraph prohibiting retaliation will not apply to “an employee who has access to the compensation information of other employees or applicants as part of such employee’s essential job functions . . . unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the contractor’s legal duty to furnish information.”

On the same day, President Obama also issued a presidential memorandum entitled Advancing Pay Equality Through Compensation Data Collection. The memorandum instructs the Secretary of Labor to propose a rule requiring federal contractors and subcontractors to submit data on compensation paid to employees, including data by sex and race, for the purpose of providing data to aid in enforcement of federal pay laws and advancing pay equality. The memorandum instructs the Secretary of Labor that the new rule should minimize the burden on federal contractors and subcontractors and should, to the extent possible, rely on existing reporting frameworks.

The President is unlikely to get legislation passed addressing these issues in the near future and is doing what he can to have an impact on labor and employment through these executive actions (and the earlier minimum wage order), which are limited in application to government contractors. The Executive Order gives the Secretary of Labor 160 days in which to propose regulations to implement the requirements of the order. Similarly, the Secretary of Labor has 120 days to propose a rule for data collection, as directed by the presidential memorandum. Nevertheless, federal contractors should not wait to review their policies to ensure compliance with these orders and federal pay laws generally.