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On April 8, 2014, President Obama signed a new Executive Order prohibiting federal contractors from retaliating against employees who discuss their compensation with each other. According to the white house “[t]he Executive Order does not compel workers to discuss pay, nor does it require employers to publish or otherwise disseminate pay data – but it does provide a critical tool to encourage pay transparency, so workers have a potential way of discovering violations of equal pay laws and are able to seek appropriate remedies.” The National Labor Relations Board has long held that it is a violation of the National Labor Relations Act for employers to prohibit employees, in union and non-union workplaces, from discussing salary and compensation, unless the employer has a legitimate business reason for doing so. The Executive Order is yet another reminder for employers to review their policies and practices to ensure that employees are not discouraged from discussing compensation.
This Executive Order is another example of this administration’s emphasis on equal pay practices. To further this agenda, the President also signed a Presidential Memorandum on April 8 instructing the Secretary of Labor to establish new regulations requiring federal contractors to submit to the Department of Labor summary data on compensation paid to their employees, including data by sex and race. It is unclear how such regulations will interplay with existing data collection requirements placed on federal contractors so stay tuned.
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