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August 6 2014

Obama Administration to Government Contractors: We Need to See What You Are Paying Everybody

Charlotte Hays

If you work for a company that receives contracts from the federal government, your salary may soon no longer be a matter between you and your employer.

The Hill reports that the Obama administration is “moving forward” with plans to issue new regulations that require such companies to disclose what they pay employees by sex, race, and other categories:

President Obama directed the Labor Department’s Office of Federal Contract Compliance Programs (OFCCP) in April to draft the regulations as part of an initiative to boost pay for women, minorities and other groups facing wage gaps.

“This summary compensation data collection from Federal contractors and subcontractors by OFCCP is a critical tool for eradicating compensation discrimination,” the agency said in its notice of proposed rulemaking.

Actually, what it is more likely to eradicate is pay on the basis of merit. If salary data is collected along demographic lines, the information collected is likely to omit such matters as the individual’s industriousness or value to the company. An employee is reduced to gender and age.

Because government contracting is lucrative—and indeed some very large firms do nothing else—contractors won’t dare run afoul of the government.

That means that a male employee who works 65 hours a week and asks for a raise might be turned down if it would mean that he then would make more than a female counterpart who works 40 hours. The pay difference might look bad to the eagle-eyed feds combing through salary information.

It is already illegal to discriminate on the basis of gender—which is a good thing—but this latest move is possibly the warm-up act for another go at passing “Paycheck Fairness Act”—which is not a good thing. It would actually have a negative effect on women (and men).

Passage of the “Paycheck Fairness Act” would result in there being fewer paychecks (unless you are a tort lawyer--then it is bonanza time) and less workplace flexibility. It would automatically make female employees plaintiffs in class action lawsuits of which they may not approve (you can opt out, but who needs that hassle?). (See IWF’s graphic on the consequences of the “Paycheck Fairness Act.”)

This move follows fast on the heels of an executive action that banned the federal government from contracting any firm that discriminates against gay and transgender people. Now, I assume that most people reading this blog would be happy to hire a qualified gay or transgender person. But some religious organizations would not and there is no carve-out for them.

The Obama administration knows what it is doing: the government has clout with these contractors, many of whom are completely dependent on the government’s business. You’ve got to hand it to them on Machiavellian instincts. The proposal will be posted Friday, and there is a 90-day period for comments.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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