Proposed Pay Transparency Rule for Federal Contractors Advances

By: Evan Szarenski

As previously covered by DCI, President Biden signed Executive Order 14069 on March 15, 2022. EO 14069 directed the Federal Acquisition Regulatory Council (Council) to issue a rule that would enhance “pay equity and transparency” for federal contractors and subcontractors, including a ban on considering prior compensation when making employment decisions. On December 4, 2023, the Council took the first step towards implementing EO 14069 when it submitted a Notice of Proposed Rulemaking (NPRM) to the Office of Management and Budget (OMB) for review.

The exact content of the NPRM will not be released until the OMB completes its review, which typically takes up to 120 days. However, the Council has indicated that, in addition to the prohibition on considering prior compensation, the NPRM will also propose requiring federal contractors and subcontractors to disclose pay ranges in job announcements. 

Once the NPRM is issued, the public will have an opportunity to submit comments. After considering the comments, the Council may then publish a final rule, which would also require OMB review. 

The Council expects that the NPRM will be issued in February of 2024. Currently, there is no estimate for when a final rule on this matter, if any, will come into effect, and thus there is no immediate action for federal contractors to take.

DCI will continue to monitor developments and provide updates. 

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