- The Biden administration is taking new measures to reduce the federal wage gap.
- Salary history review will be prohibited when determining salary for new hires.
- The proposed new rule would do the same for federal contractors and provide payment transparency.
Across the economy and the country, women, especially women of color, are paid less than their peers. The Biden administration wants to change that.
On Monday, the administration announced two new policies to try and level the playing field. In the federal government, the Office of Personnel Management will implement a new rule that prohibits the use of an applicant’s salary history to determine a salary for a role in the federal government. In other words, federal job applicants will not have their salary histories held against them.
“Relying on a candidate’s salary history can exacerbate existing inequities in our pay structures and disproportionately affect women and workers of color. In fact, this has happened before in my career,” Office of Management and Budget Director Shalanda Young told reporters. said. “Banning this practice will help federal agencies hire high-performing talent that not only fully represents the American people, but also delivers to them most effectively.”
In addition, the Federal Procurement Regulatory Board will propose a rule that would prohibit federal contractors from seeking and reviewing past compensation data when making job decisions — requiring contractors to disclose their salary ranges in new job postings.
Prohibitions on salary history have caused some defenders and states can help eliminate wage inequality. Relying on past salary — which may already be low, in part because the applicant is already on the wrong side of the gender and racial pay gap — can mean employers’ salary negotiations. they are locked into a compensation number that is lower than they might otherwise be willing to offer.
And, like Chronicle of the National Women’s Law Centersome employers use previous salaries as a benchmark to determine a new employee’s salary—again, they’re locked into some biases that can keep that number lower.
Research on salary history bans shows that these bans are effective in reducing pay gaps; a studyA study looking at California’s statewide wage history ban, along with other areas where bans have been enacted, found that gender earnings ratios increased, with women over 35 particularly benefiting.
The events coincide with the 15th anniversary of the Lilly Ledbetter Fair Pay Act in 2009. EEOCIt is the first bill signed by President Barack Obama.
This act overturned an earlier SCOTUS decision and reinstated the previous law providing information on pay discrimination. The Biden administration’s final regulation for federal employees will take effect 60 days after Jan. 30, while the proposed rule for contractors will be made public within 60 days.
The paid-up capital measures are consistent with similar policies of the administration, raised the minimum wage for federal contractors and Facilities funded by the CHIPS act require affordable and accessible child care for employees.
However, all of these policies apply to administratively controlled employees, not nationwide employees; Congress has failed to raise the minimum wage about 15 yearsor skip Legislation to strengthen the Equal Pay Act of 1963. But the new moves are another area where the Biden administration hopes to become a model employer again.
“These policies promote pay equity by closing pay gaps, and we know that closing pay gaps leads to increased employee satisfaction, better job performance, and overall increased employee productivity — all of which promote the economy as well as the efficiency and effectiveness of our workforce.” factors,” Young said. “It’s common sense and the research backs it up. When employees feel valued and their pay is fair, it’s better for everyone.”