White House to curb use of compensation history in hiring, setting pay

Jan. 29 (UPI) -- The Biden administration announced new initiatives Monday to address wage gaps and promote equal pay for federal employees and contractors on the 15th anniversary of the Lilly Ledbetter Fair Pay Act.

The moves seek to establish salaries based on qualifications, skills, experience, and expertise by reducing reliance on past compensation history in hiring and establishing pay, while promoting fair and equitable compensation between men and women, the White House said.

As part of the effort, the Office of Personnel Management will issue new rules to prohibit more than 80 federal agencies from factoring in an individual's current or previous pay when deciding the salaries of federal employees.

The strategy is designed to mitigate pay discrimination that may persist as workers transition between different job roles.

In a similar move, the Federal Acquisition Regulatory Council will propose barring federal contractors and subcontractors from looking to obtain applicants' past pay while hiring or establishing pay for government contracts and require them to include expected salary ranges in job listings.

Lastly, the Department of Labor's Office of Federal Contract Compliance Programs will issue guidance to provide clarity on when relying on past compensation can be considered unlawful discrimination under protections already in place for hiring and pay decisions.

The new measures will help to implement executive orders signed by President Joe Biden in 2021 and 2022, which aimed to advance pay equity for government workers and ensure women and minorities have immediate access to thousands of new manufacturing and clean energy jobs created under Biden's legislative agenda, The White House said.

The moves also build upon an executive order from January 2022 that raised the minimum wage of federal workers to $15 per hour.

The introduction of the new policies come as women, on average, earn 84 cents for every dollar earned by men across all sectors, while the disparities are even higher for women of color, President Joe Biden said in a statement.

"These new actions adopt commonsense policies that will help pay millions of workers fairly, close gender and racial wage gaps, and yield tangible benefits for the federal government and federal contractors," Biden wrote. "These policies are good for workers, our economy, and for families."

Biden also vowed to keep pressure on Congress to pass the Paycheck Fairness Act, which would help to eliminate gender-based pay discrimination and ensure pay transparency well beyond his term.

Collectively, the new policies and initiatives will seek to ensure that women and people of color can fully participate in the labor force for fair and equal pay, while also improving recruiting, reducing turnover, enhancing job performance and boosting morale, the White House said.

In a sign of progress, the gender pay gap reached a record low over the past year as the administration has sought to address persistent wage gaps throughout the federal workforce.

The administration strategically announced the actions on the anniversary of the landmark Lilly Ledbetter Fair Pay Act, which was signed into law by President Barack Obama on Jan. 29, 2009, nine days after he was sworn in for his first term.

The legislation was named in recognition of Lilly Ledbetter, a longtime employee of Goodyear Tire & Rubber Co., who upon nearing retirement in the late 1990s, discovered substantial pay disparities between her salary and that of her male counterparts, who did the same job.

She filed a complaint with the Equal Employment Opportunity Commission, leading to a lawsuit against Goodyear, claiming gender-based pay discrimination.

The case ultimately reached the Supreme Court, which ruled 5-4 against Ledbetter, stating that she should have filed her complaint within 180 days of the pay decision by the company, effectively limiting the time frame for anyone to bring such claims.

In response, legislation in Ledbetter's name was proposed in Congress in 2008 during the final year of George W. Bush's presidency. That bill was defeated, but it was reintroduced in January 2009 after Obama was elected and passed overwhelmingly in the House and Senate.

The Ledbetter law modified the Civil Rights Act of 1964, emphasizing that the 180-day statute of limitations for filing an equal-pay lawsuit resets with each new paycheck, allowing employees like Ledbetter more time to challenge pay discrimination.