60th Anniversary of the Equal Pay Act

June 10^th marked the 60^th anniversary of the Equal Pay Act of 1963, which made it illegal to pay women less than men for the same work. The OFCCP, which enforces Executive Order 11246 and has recovered nearly $39.4 million in backpay and salary adjustments on behalf of over 12,000 women since FY 2021, noted this legislative landmark with an email to stakeholders outlining the steps the agency has taken during this administration to address pay discrimination.

The Communication highlights several recent OFCCP initiatives that all contractors should be aware of:

• In August 2022, the OFCCP issued the revised Directive 2022-01, which highlights a contractor’s obligation to analyze compensation systems to determine whether there are any gender or race/ethnicity-based disparities as part of their annual affirmative action programs.
• In March 2023, the OFCCP launched the Mega Construction Project Program to enhance equal opportunity in the construction trades workforce. This program aims to help remove hiring barriers within the trades for women, people of color, veterans, and people with disabilities.

In case you missed, In March 2023, the OFCCP also published a fact sheet that provides a roadmap for employers to take a proactive approach to achieving pay equity. The fact sheet covers compensation practices that can lead to pay inequities including pay secrecy, the reliance of salary history, subjective starting pay decisions, bias against mothers, and steering women towards lower-paying, female dominated positions. The fact sheet also provides effective approaches that can advance pay equity:

• Conducting a Compensation Analysis - Contractors are required to perform an in-depth analysis of their compensation systems to determine whether there is any gender, race, or ethnicity-based disparities.
• Ban Pay Secrecy Policies and Practices - Federal contractors are prohibited from firing or discriminating against employees and job applicants for discussing, disclosing, or inquiring about compensation. Many states have also passed legislature prohibiting policies related to restricting employee discussions around compensation.
• Prohibit Reliance on Salary History – The OFCCP recommends determining pay based on an applicant’s relevant experience, qualifications and the responsibilities required for the role rather than using an applicant’s salary history.
• Advance Transparency in Compensation and Advancement Decisions – The OFCCP recommends that employers be transparent around compensation and promotional decisions. Using standardized and objective performance outcomes can help reduce bias within these employment decisions by reducing the reliance on subjective criteria. The OFCCP also suggests that employers should require managers to provide an explanation for their pay decisions.
• Include Salary Ranges in Job Announcements – Providing salary ranges can help reduce the gender differences related to negotiation, reduce recruitment costs, and encourages employers to proactively review their compensation practices and remedy any unjustified disparities.

A major metric that is associated with identifying progress towards pay equity, is the gender wage gap, also known as the gender pay gap. The gender wage gap is the average difference between the compensation for working men and women. While the gender wage gap has reduced over the 60 years, full time working women are still earning $10,000 less per year than men and the wage gap is even larger for women of color. The goal to reduce the gender wage gap is ongoing and continued legislature related to compensation is expected.