Biden Administration Proposes New Pay Transparency/Equity Rule
April 2, 2024
On January 29, 2024, on the 15th anniversary of the enactment of the Lily Ledbetter Fair Pay Act, the Biden Administration announced a proposed regulation to prohibit federal contractors and subcontractors from using job applicant’s prior salary history when setting pay and to require federal contractors to disclose the expected salary range in job postings. The proposal was published in the Federal Register on January 30, 2024 and comments were due on April 1, 2024.
Background
The proposed rule was issued by the Federal Acquisition Regulation (FAR) Council after being directed by President Biden in Executive Order 14069 issued in March of 2022 to promulgate proposed rules enhancing pay equity and transparency for federal contractors’ job applicants and employees.
Proposed Rule
The proposal, which covers applicants and current employees seeking a position to perform work on or in connection with the contract, bans the use of salary history and also requires expansive compensation disclosure and notice requirements. The “in connection with” is defined as “work activities necessary to the performance of the contract but not specifically called for by the contract” (89 Fed. Reg. 5843, 5853). This vastly expanded definition will make it difficult for contractors to determine who is covered.)
Under the salary history portion of the proposal, federal contractors and subcontractors may not
- Seek, directly or indirectly, the compensation history of any applicant from any person;
- Retaliate against or refuse to consider any applicant for failing to respond to a compensation inquiry; or
- Rely on an applicant’s compensation history for screening or considering an applicant for employment or in determining an applicant’s compensation, even if the applicant volunteers compensation history.
In addition, federal contractors will be required to include in all advertisements for job openings, placed by or on behalf of any position on or in connection with a contract, the following disclosure:
- Salary, wages or pay range a contractor “in good faith” believes it will pay for the advertised position and may include:
- Pay scale for the position,
- Range of compensation for those currently working in similar jobs, or
- Amount budgeted for the position.
- General description of benefits and other forms of compensation applicable and, if half of the compensation is derived from commissions, bonuses, and/or overtime, the contractor must specify the percentage of overall compensation for each form of compensation that it in good faith believes will be paid.
Finally, federal contractors must provide a standard notice of these requirements as either part of the job announcement or application process, including the following, verbatim:
This employer is a Federal contractor or subcontractor. Under 48 C.F.R. (FAR) 52.222–ZZ, Prohibition on Compensation History Inquiries and Requirement for Compensation Disclosures by Contractors During Recruitment and Hiring, Federal contractors and subcontractors may not inquire about or rely on an applicant’s compensation history to screen an applicant for employment or to determine the applicant’s pay for a position on or in connection with a Federal contract or subcontract, even when the information is offered without prompting. The employer must also disclose the compensation for the position in all advertisements for the job opening.
Applicants alleging Federal contractor or subcontractor violations of these requirements: These applicants may submit a complaint to the central collection point of the agency that issued the solicitation for the Federal contract or awarded the Federal contract or order, as identified at www.dol.gov/general/labor-advisors. The complaint must be submitted within 180 days of the date the violation occurred. The agency that issued the solicitation or awarded the contract or order on which this applicant would primarily work is _______. [Contractor to fill in with appropriate agency name] For applicants supporting multiple agencies, complaints should copy the central collection point of all known agencies to be supported by the applicant’s position.
Applicants alleging discrimination on the basis of race, color, religion, sex, sexual orientation, gender identity, national origin, disability, or protected veteran status should file a complaint with the Office of Federal Contract Compliance Programs (OFCCP). If complaints alleging discrimination are submitted to an agency central collection point rather than directly with OFCCP, the complaints will be forwarded to OFCCP. Information on the process for filing a formal complaint of discrimination with OFCCP can be found at the following website: https:// www.dol.gov/agencies/ofccp/contact/ file-complaint.
The notice would require contractors to identify which agency issued the solicitation, award, or the order on which the applicant would primarily work. Any applicant who alleges violation of these requirements may submit a complaint to “the central collection point of the agency” that issued the solicitation or awarded the contract. The central collection point of the contracting agency is identified as DOL Labor Advisors assigned to the contracting agency.
Substantial New Burdens Imposed
While initially the proposal looks similar to current state and local pay transparency requirements, it places a substantial additional burden on contractors because of its differences with current pay transparency requirements. The requirement to tie each position to a specific contract is especially onerous because contractors do not always know which position will be tied to which federal contract and many workers devote time to many contracts in the course of their job.
Next Steps
While the FAR Council is considering the comments to its proposal, several courts are reconsidering whether the President has the authority under the Procurement Act to issue Executive Orders like this one. Despite the likelihood of court challenges, federal contractors should carefully review this proposal and begin to determine how to comply with the new proposal.
FortneyScott will continue to monitor these developments and provide updates as appropriate. Clients with questions can reach out to their FortneyScott attorney.
Issued: April 2, 2024
Join FortneyScott attorneys on Thursday, June 11, 2026, from 12:00 p.m. to 1:00 p.m. EDT for a complimentary webinar on the European Union (“EU”) Pay Transparency Directive (the “Directive”). To register, please click here . The Directive is driving a significant shift in compensation reporting and transparency across the EU, and requires employers to disclose salary ranges to applicants, share internal pay-setting criteria, and conduct gender pay reporting. With the June 7, 2026, deadline for Member States to transpose the Directive into national law, employers need to understand their compliance obligations and prepare for unresolved implementation questions. In this webinar, FortneyScott attorneys will help U.S. companies with operations in the EU understand the Directive’s requirements, including how they differ from U.S. compliance frameworks. We will discuss best practice lessons that can be adopted from U.S. pay transparency and reporting laws and, importantly, provide key contrasts of the U.S. practices that are not applicable in the EU. Key topics include: · The Directive’s scope and coverage · Reporting obligations under the Directive · Status of Member State transposition · Practical compliance steps employers can take now Who should attend. This webinar is designed for in-house counsel, HR leaders, and senior professionals at multi-national organizations responsible for compensation, benefits, and employment law compliance. Register to attend. To register, please click here .
On Thursday, May 14, the U.S. Department of Labor’s Wage and Hour Division issued a technical amendment removing the salary threshold increases under 29 C.F.R. Part 541, adopted in April 2024. DOL stated that it was following the decisions made by federal courts in November, and that the amendment reinstated the 2019 salary levels applicable to the executive, administrative, and professional exemptions under the Fair Labor Standards Act. The current salary levels are $684 per week for exempt employees and $107,432 annually for highly compensated employees. This change codifies the enforcement posture DOL has maintained since the 2024 rule was invalidated. While this does not alter current compliance obligations, it resolves regulatory inconsistency by restoring the 2019 framework in the regulations and eliminating the 2024 provisions. Employers should confirm that exemption classifications continue to be evaluated against the reinstated 2019 thresholds and remain attentive to any future rulemaking in this area. Stay tuned. FortneyScott will continue to monitor whether there will be further substantive revisions to the white collar regulations. If so, it is likely be in the DOL’s regulatory agenda, which we understand will be published in the near future. Should you have any questions, please reach out to your FortneyScott attorney.
Federal contractors are facing immediate changes to implement stepped-up efforts to restrict DEI discrimination, including new mandatory contract clauses, expanded audits, and significant potential legal exposure. These far-reaching changes will impact prime contractors and all tiers of subcontractors. Any employer that is a federal contractor should immediately prepare for these new compliance obligations.
DOL Proposes New Joint Employer Standard In an effort to create a uniform, nationwide standard for determining joint employer status, the U.S. Department of Labor’s Wage and Hour Division will publish a Notice of Proposed Rulemaking (NPRM) in the Federal Register on April 23, 2026. The proposed Joint Employer Rule aims to restore a standard similar to the more business-friendly Trump 1.0 rule. Specifically, the proposed rule clarifies when multiple organizations would be considered joint employers under the Fair Labor Standards Act, the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act. Comments are due within 60 days of the published date, or June 22, 2026. The proposed rule seeks to end nearly a decade of vacillating rules, as both the Trump and Biden administrations had tried promulgating a final rule previously. Those prior attempts created a series of conflicting executive and judicial rulings. As stated by acting Labor Secretary Keith Sonderling, this NPRM is intended to establish a “clear standard on joint employment.” Four-Factor Test The proposed rule modifies the Trump 1.0 standard, which focused heavily on requiring actual control by one company over another to establish joint employment. A prior judicial challenge to that approach was successful, requiring some modification to any new standard introduced thereafter. The proposed rule, therefore, responds by offering a four-factor test that is still heavily weighed on aspects of control. The four factors are whether a company: has the power to hire or fire a worker; supervises or controls a worker’s schedule or conditions of employment to a substantial degree; determines the rate and method of payment; and maintains a worker’s employment records. No single factor is dispositive, and the analysis will focus on the totality of the circumstances. Single National Standard Still a Goal The DOL acknowledged that some circuit courts continue to consider more factors and said the four listed factors were “not exhaustive.” Additionally, other federal agencies and several states have their own joint employer standards, some of which are directed at specific industries. For instance, the NLRB finalized its joint employer rule in late February 2026, with a similarly aligned standard that has some variances from DOL’s proposed standard. A final rule is anticipated soon after the comment period closes. Once issued, the rule may be subject to judicial challenges from interested parties that previously opposed similar regulatory approaches. Contact your FortneyScott attorney for additional information on how to submit comments and/or prepare for its impact on your workforce.
Federal contractors are facing immediate changes to implement stepped-up efforts to restrict DEI discrimination, including new mandatory contract clauses, expanded audits, and significant potential legal exposure. These far-reaching changes will impact prime contractors and all tiers of subcontractors. Any employer that is a federal contractor should immediately prepare for these new compliance obligations. The Federal Acquisition Regulatory Council (FAR Council), which sets government-wide procurement policy and regulation for all federal agencies, has moved quickly to implement Executive Order (EO) 14398 , Addressing DEI Discrimination by Federal Contractors. Specifically, the FAR Council: Issued government-wide implementation guidance and class deviation language for all federal agencies to incorporate a mandatory contract clause, as prescribed in EO 14398, as soon as April 24, 2026, in new solicitations, and by July 24, 2026, for bilateral modifications of existing contracts. The class deviation authorizes agency-wide implementation of new requirements in federal contracts before the Federal Acquisition Regulations (FAR) are amended formally. Requested emergency approval, under the Paperwork Reduction Act (PRA), to allow immediate enforcement of EO 14398’s information collection and reporting requirements. Join FortneyScott for a complimentary briefing on Monday, April 27, at noon ET . Please register here . Contact your FortneyScott attorney for additional information on how to prepare for this new contract clause.
Employers need to continue to be vigilant in their compliance efforts for DEI and related programs. Here are two quick updates: To assist employers, our most recent DC Insider-Employer Update podcast – EO 14398 and the Procurement Power Play: Compliance, Contracts, and Consequences – provides a great overview of the newest Executive Order and federal contractor compliance. Additionally, late Friday, April 10 th , DOJ announced the first False Claims Act settlement based on DEI claims against IBM for $17 million. Please contact your FortneyScott attorney for more information, and visit our website ( www.fortneyscott.com ) for our recent special webinar .
Join FortneyScott attorneys on Thursday, June 11, 2026, from 12:00 p.m. to 1:00 p.m. EDT for a complimentary webinar on the European Union (“EU”) Pay Transparency Directive (the “Directive”). To register, please click here . The Directive is driving a significant shift in compensation reporting and transparency across the EU, and requires employers to disclose salary ranges to applicants, share internal pay-setting criteria, and conduct gender pay reporting. With the June 7, 2026, deadline for Member States to transpose the Directive into national law, employers need to understand their compliance obligations and prepare for unresolved implementation questions. In this webinar, FortneyScott attorneys will help U.S. companies with operations in the EU understand the Directive’s requirements, including how they differ from U.S. compliance frameworks. We will discuss best practice lessons that can be adopted from U.S. pay transparency and reporting laws and, importantly, provide key contrasts of the U.S. practices that are not applicable in the EU. Key topics include: · The Directive’s scope and coverage · Reporting obligations under the Directive · Status of Member State transposition · Practical compliance steps employers can take now Who should attend. This webinar is designed for in-house counsel, HR leaders, and senior professionals at multi-national organizations responsible for compensation, benefits, and employment law compliance. Register to attend. To register, please click here .
On Thursday, May 14, the U.S. Department of Labor’s Wage and Hour Division issued a technical amendment removing the salary threshold increases under 29 C.F.R. Part 541, adopted in April 2024. DOL stated that it was following the decisions made by federal courts in November, and that the amendment reinstated the 2019 salary levels applicable to the executive, administrative, and professional exemptions under the Fair Labor Standards Act. The current salary levels are $684 per week for exempt employees and $107,432 annually for highly compensated employees. This change codifies the enforcement posture DOL has maintained since the 2024 rule was invalidated. While this does not alter current compliance obligations, it resolves regulatory inconsistency by restoring the 2019 framework in the regulations and eliminating the 2024 provisions. Employers should confirm that exemption classifications continue to be evaluated against the reinstated 2019 thresholds and remain attentive to any future rulemaking in this area. Stay tuned. FortneyScott will continue to monitor whether there will be further substantive revisions to the white collar regulations. If so, it is likely be in the DOL’s regulatory agenda, which we understand will be published in the near future. Should you have any questions, please reach out to your FortneyScott attorney.
Federal contractors are facing immediate changes to implement stepped-up efforts to restrict DEI discrimination, including new mandatory contract clauses, expanded audits, and significant potential legal exposure. These far-reaching changes will impact prime contractors and all tiers of subcontractors. Any employer that is a federal contractor should immediately prepare for these new compliance obligations.
DOL Proposes New Joint Employer Standard In an effort to create a uniform, nationwide standard for determining joint employer status, the U.S. Department of Labor’s Wage and Hour Division will publish a Notice of Proposed Rulemaking (NPRM) in the Federal Register on April 23, 2026. The proposed Joint Employer Rule aims to restore a standard similar to the more business-friendly Trump 1.0 rule. Specifically, the proposed rule clarifies when multiple organizations would be considered joint employers under the Fair Labor Standards Act, the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act. Comments are due within 60 days of the published date, or June 22, 2026. The proposed rule seeks to end nearly a decade of vacillating rules, as both the Trump and Biden administrations had tried promulgating a final rule previously. Those prior attempts created a series of conflicting executive and judicial rulings. As stated by acting Labor Secretary Keith Sonderling, this NPRM is intended to establish a “clear standard on joint employment.” Four-Factor Test The proposed rule modifies the Trump 1.0 standard, which focused heavily on requiring actual control by one company over another to establish joint employment. A prior judicial challenge to that approach was successful, requiring some modification to any new standard introduced thereafter. The proposed rule, therefore, responds by offering a four-factor test that is still heavily weighed on aspects of control. The four factors are whether a company: has the power to hire or fire a worker; supervises or controls a worker’s schedule or conditions of employment to a substantial degree; determines the rate and method of payment; and maintains a worker’s employment records. No single factor is dispositive, and the analysis will focus on the totality of the circumstances. Single National Standard Still a Goal The DOL acknowledged that some circuit courts continue to consider more factors and said the four listed factors were “not exhaustive.” Additionally, other federal agencies and several states have their own joint employer standards, some of which are directed at specific industries. For instance, the NLRB finalized its joint employer rule in late February 2026, with a similarly aligned standard that has some variances from DOL’s proposed standard. A final rule is anticipated soon after the comment period closes. Once issued, the rule may be subject to judicial challenges from interested parties that previously opposed similar regulatory approaches. Contact your FortneyScott attorney for additional information on how to submit comments and/or prepare for its impact on your workforce.
Federal contractors are facing immediate changes to implement stepped-up efforts to restrict DEI discrimination, including new mandatory contract clauses, expanded audits, and significant potential legal exposure. These far-reaching changes will impact prime contractors and all tiers of subcontractors. Any employer that is a federal contractor should immediately prepare for these new compliance obligations. The Federal Acquisition Regulatory Council (FAR Council), which sets government-wide procurement policy and regulation for all federal agencies, has moved quickly to implement Executive Order (EO) 14398 , Addressing DEI Discrimination by Federal Contractors. Specifically, the FAR Council: Issued government-wide implementation guidance and class deviation language for all federal agencies to incorporate a mandatory contract clause, as prescribed in EO 14398, as soon as April 24, 2026, in new solicitations, and by July 24, 2026, for bilateral modifications of existing contracts. The class deviation authorizes agency-wide implementation of new requirements in federal contracts before the Federal Acquisition Regulations (FAR) are amended formally. Requested emergency approval, under the Paperwork Reduction Act (PRA), to allow immediate enforcement of EO 14398’s information collection and reporting requirements. Join FortneyScott for a complimentary briefing on Monday, April 27, at noon ET . Please register here . Contact your FortneyScott attorney for additional information on how to prepare for this new contract clause.
Employers need to continue to be vigilant in their compliance efforts for DEI and related programs. Here are two quick updates: To assist employers, our most recent DC Insider-Employer Update podcast – EO 14398 and the Procurement Power Play: Compliance, Contracts, and Consequences – provides a great overview of the newest Executive Order and federal contractor compliance. Additionally, late Friday, April 10 th , DOJ announced the first False Claims Act settlement based on DEI claims against IBM for $17 million. Please contact your FortneyScott attorney for more information, and visit our website ( www.fortneyscott.com ) for our recent special webinar .
The Trump Administration continues to push for the elimination of “illegal DEI.” Join FortneyScott attorneys on Thursday, April 9, 2026 at noon EDT to learn the latest developments by multiple federal agencies targeting DEI programs and policies. The webinar will address the key federal agencies’ expansive efforts, including: EEOC , focusing on the agency’s latest challenges to DEI, including expansive investigations of corporate DEI programs, subpoena enforcement litigation and limiting the rights of trans workers; DOJ , including the False Claims Act investigations, and challenges to the constitutionality of EO 14173 in 4th and 7th Circuits; FTC & FCC , highlighting the Mansfield Program, and warning law firms about antitrust compliance, and how DEI can impact regulatory approvals; and, Certification of Compliance , including GSA’s proposed Certification for grantees, and the implications for federal contractors. We also will provide key takeaways for DEI compliance, and steps to mitigate the risks of federal government enforcement actions based on illegal DEI matters. This webinar is the final in a three-part series designed for compliance professions, in-house counsel, HR and inclusion leaders, and other business leaders responsible for labor and employment law compliance.
In this special webinar we will address: Details of the new EO; The specific prohibition on “racially discriminatory DEI activities” in five key areas; The new requirements that add materiality to the contract payments and the expansion of the basis for False Claims Act exposure; New subcontractor management and reporting duties; Penalties and enforcement, including contract cancellation, debarment from future contracts and FCA actions by DOJ; and, The detailed implementation deadline for actions, including the new contract clauses, FAR Council guidance and agencies compliance report to the White House.
In collaboration with FortneyScott and Fragomen law firms, LRQA officially launched TriAge: Age & Eligibility Verification Framework , designed to help employers strengthen hiring and workforce monitoring amid rising age and eligibility verification risks. TriAge goes beyond basic I‑9 compliance by providing a structured set of best practices to verify identity, age, and eligibility across operations. The framework also supports enhanced oversight and allows for independent validation through audits and assessments. We are proud to have contributed to the development of LRQA’s TriAge, a practical tool that helps employers build stronger, more defensible hiring practices.
President Trump issued a new Executive order ( EO 14398 ) on March 26, 2026, entitled “Addressing DEI Discrimination by Federal Contractors,” and accompanying Fact Sheet . The new EO fundamentally alters the compliance landscape for government contractors. While prior executive orders addressed DEI programs through policy directives, this new EO creates a mandatory, enforceable contract clause that exposes contractors to contract termination, debarment, and False Claims Act (FCA) liability. The Core Requirement: A New Mandatory Contract Clause Within 30 days (by April 25, 2026), agencies must insert a specific clause into all covered contracts, subcontracts, and lower-tier subcontracts. By accepting a contract containing this clause, contractors agree to six binding obligations: 1. The contractor will not engage in any “racially discriminatory DEI activities,” as defined in Section 2 of the Executive Order of March 26, 2026 (Addressing DEI Discrimination by Federal Contractors): 2. The contractor will furnish to contracting agencies all information and reports, including providing access to books, records, and accounts, for purposes of ascertaining compliance; 3. In the event of the contractor’s or a subcontractor’s noncompliance with this clause, the government contract may be canceled, terminated, or suspended in whole or in part, and the contractor or subcontractor may be declared ineligible for further Government contracts; 4. The contractor will report any subcontractor’s known or reasonably knowable conduct that may violate this clause to the contracting department or agency and take any appropriate remedial actions directed by the contracting department or agency; 5. The contractor will inform the contracting department or agency if a subcontractor sues the contractor and the suit puts at issue, in any way, the validity of this clause; and, 6. The contractor recognizes that compliance with the requirements of this clause are material to the Government’s payment decisions for purposes of section 3729(b)(4) of title 31, United States Code (False Claims Act). Immediate Action to Meet Deadlines Federal contractors face very short deadlines for the implementation of these new obligations, including the inclusion of the new contracting clauses within 30 days, by April 25, 2026. Federal contractors should initiate steps immediately to ensure compliance, including: 1. Audit Internal Programs: Review mentorship programs, ERGs, leadership development tracks, and supplier diversity initiatives for eligibility criteria based on race or ethnicity. 2. Update Subcontractor Agreements: Immediately begin flowing the mandatory clause down to all subcontractors and establish a monitoring system to satisfy the “known or reasonably knowable” reporting standard. 3. Review Invoicing and Certifications: Ensure that no compliance certifications or payment requests are submitted if prohibited activities exist. For More Information and Assistance Register now for FortneyScott’s special webinar, Federal Contractors’ New DEI Obligations that will be held on Tuesday, March 31, 2026 from 12:00 noon to 1:00 ET. This special webinar we will address: - Details of the new EO - The specific prohibition on “racially discriminatory DEI activities” in five key areas - The new requirements that add materiality to the contract payments and the expansion of the basis for False Claims Act exposure - New subcontractor management and reporting duties - Penalties and enforcement, including contract cancellation, debarment from future contracts and FCA actions by DOJ - The detailed implementation deadline for actions, including the new contract clauses, FAR Council guidance and agencies compliance report to the White House For more information on how federal contractors can comply with this new EO, contact your FortneyScott’s attorney or email us at info@fortneyscott.com .
