New Executive Order Affect Federal Contractors

New Executive Order Affect Federal ContractorsIn 1963, President Kennedy signed the Equal Pay Act, when women were being paid 59 cents for every dollar paid to men, making it illegal for employers to pay lower wages to women doing substantially the same work as their male counterparts. Following year, Title VII of the Civil Rights Act of 1964 was enacted, making it illegal to discriminate, including in compensation, on the basis of sex, race, color, religion and national origin. In 2009, President Obama signed the Lilly Led better Fair Pay Act as a concrete step to bridge the equal pay gap. Obama also increased the OFCCP’s budget by 10% and the Equal Opportunity Commission’s budget by 5% as well as continuing to support The Paycheck Fairness Act, which he cosponsored in the Senate.

But even today, 50 years after the Equal Pay Act became a law, women are paid 77 cents for every dollar paid to men. Lacking congressional support to raise wages to end gender pay disparities, President Obama is imposing his policies on federal contractors. He will sign an executive order Tuesday, barring federal contractors from retaliating against employees who discuss their pay with each other. The order is similar to language in a Senate bill aimed at closing a pay gap between men and women.

The President will also direct the Labor Department to adopt rules requiring federal contractors to provide compensation data based on sex and race. Federal contracting covers almost 25% of the U.S. workforce and includes companies ranging from Boeing to small parts suppliers and service providers.

Compensation information is a goal for many agencies and organizations researching equitable growth, but federal contractors worry that additional compensation data could be used to fuel wage related lawsuits. Such orders also create a two-tiered system where rules apply to federal contractors and not to other employees.

In February, 2014, President Obama signed an executive order increasing the hourly minimum wage for federal contractors from $7.25 to $10.00. White House officials admit this increase would affect a small percentage of workers. However, the hope is that this move would encourage state or individual businesses to act on their own to increase workers’ wages.

For more information on the history of equal pay click here.

Get informed about average salary by industry and location click here.

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