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Federal contractor pay transparency rule takes effect

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A rule that prohibits federal contractors from maintaining pay secrecy policies takes effect Monday.

The rule by the U.S. Department of Labor's Office of Federal Contract Compliance Programs provides that federal contractors and subcontractors must refrain from discharging, or otherwise discriminating against, workers or applicants who inquire about, discuss or disclose their compensation or the compensation of other employees or applicants, among other provisions.

The rule applies to employers that enter into new covered federal contract or subcontracts, or modify existing contracts, on or after Monday.

Contractors were not required to make any changes to contracts that took effect before Monday, according to the OFCCP.

The rule was published in the Sept. 17, 2015, issue of the Federal Register and then left open for public comment for 90 days before becoming final Monday.

It follows President Barack Obama's April 8, 2015, signature on Executive Order 13665, which instructed the Labor secretary to propose a rule within 160 days to require pay transparency among federal contractors.