Federal contractors and other employers should anticipate greater scrutiny related to their compensation policies and practices as a result of recent policy shifts. President Biden has made it clear that a key priority of his administration is closing the gender and racial wage gap that currently exists in the United States, and that he plans to encourage changes at both the state and federal levels. At the federal level, that means the reintroduction of the Paycheck Fairness Act, the rollout of new policy initiatives, and the issuance of executive orders. This prioritization of pay equity will likely result in renewed enforcement efforts related to pay discrimination from the Office of Federal Contract Compliance Programs (OFCCP). State legislatures also continue to pass laws enhancing pay equity and transparency.
Background
The Equal Pay Act (EPA), passed in 1963, was one of the first anti-discrimination laws enacted and was intended to abolish wage disparity based on sex. The act prohibits wage discrimination between men and women who perform jobs that require substantially the same skill, effort and responsibility within the same company. Despite the existence of the EPA, however, the gender-wage gap still exists with the focus on pay disparities across both gender and race, as evidenced by statistical data.
Biden priority
On International Women’s Day, March 8, 2021, President Biden created the White House Gender Policy Council via Executive Order, to ensure that gender equity and equality are pursued in domestic and international policy. Specifically, the Council is tasked with advancing gender equity and equality by coordinating federal policies and programs that address the structural barriers to women’s participation in the labor force and by decreasing wage and wealth gaps. The Council is to work closely with the Domestic Policy Council, which is coordinating the interagency, whole-of-government strategy for advancing equity, as set forth in Executive Order 13985 of January 20, 2021 (Advancing Racial Equity and Support for Underserved Communities Through the Federal Government.) In addition, the President has promised additional funding for agencies such as the Equal Employment Opportunity Commission (EEOC), the U.S. Labor Department’s Office of Federal Contract Compliance Programs, and the Justice Department’s Civil Rights Division to investigate violations and enforce pay equity laws.