On September 30, 2016, the Department of Defense, General
Services Administration, and National Aeronautics and Space
Administration issued an interim rule titled "Non-Retaliation for
Disclosure of Compensation Information." The interim rule
implements Executive Order 13665 (the
"Order"). The Order, which President Obama signed
on April 8, 2014, prohibits federal contractors from retaliating
against employees who discuss their compensation. Our prior
blog posts on the Order can be found
here. The OFCCP published regulations implementing the
Order on September 11, 2015. Our blog post on those
regulations can be found
Consistent with the Order and the OFCCP's regulations, the
interim rule amends existing FAR provisions to expressly prohibit
contractors from taking adverse employment actions against
employees or job applicants who discuss or disclose compensation
information, with certain exceptions. Specifically, the new interim
rule makes clear that contractors cannot "discharge or in any
other manner discriminate against any employee or applicant for
employment because such employee or applicant has inquired about,
discussed, or disclosed the compensation of the employee or
applicant or another employee or applicant." The interim
rule applies to solicitations and contracts that are issued on or
after September 30, 2016. Even so, the interim rule provides
that "[c]ontracting officers are expected to work with their
existing contractors and bilaterally modify their contracts, to the
The FAR Council found that this interim rule was necessary to
ensure that the requirements in the Order and OFCCP regulations
would "be included in solicitations and contracts immediately
and puts contractors on clear notice of legal responsibilities that
are already in effect." The FAR Council stated that it was
concerned that if it followed standard rulemaking requirements, the
requirements of the Order would "not be incorporated into
contracts, and contractors will be put at unnecessary risk of
noncompliance with the [Order] and labor rule."
As such, the interim rule represents another step in the
implementation of the Order. Contractors have already been required
to comply with the requirements of the Order since January 11, 2016
when the OFCCP's regulations implementing the Order went into
effect. The interim rule now ensures that pay transparency
obligations are a term of the federal contract.
The FAR Council is accepting written comments on the interim
rule through November 29, 2016. The FAR Council will consider these
comments in developing the final rule.
The FAR Council issued a final rule, effective January 19, 2017, which will broadly require specific privacy training, and annual re-training, for contractor or subcontractor personnel dealing with "personally identifiable information" (PII).
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