[Federal Register Volume 80, Number 176 (Friday, September 11, 2015)]
[Rules and Regulations]
[Pages 54934-54977]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-22547]



[[Page 54933]]

Vol. 80

Friday,

No. 176

September 11, 2015

Part III





Department of Labor





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 Office of Federal Contract Compliance Programs





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41 CFR Part 60-1





 Government Contractors, Prohibitions Against Pay Secrecy Policies and 
Actions; Final Rule

  Federal Register / Vol. 80 , No. 176 / Friday, September 11, 2015 / 
Rules and Regulations  

[[Page 54934]]


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DEPARTMENT OF LABOR

Office of Federal Contract Compliance Programs

41 CFR Part 60-1

RIN 1250-AA06


Government Contractors, Prohibitions Against Pay Secrecy Policies 
and Actions

AGENCY: Office of Federal Contract Compliance Programs (OFCCP), Labor.

ACTION: Final rule.

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SUMMARY: The Office of Federal Contract Compliance Programs (OFCCP) 
publishes this final rule to implement Executive Order 13665 (also 
referred to as ``the Order,'' infra) issued on April 8, 2014 to 
prohibit Federal contractors from discriminating against, in any 
manner, employees and job applicants who inquire about, discuss, or 
disclose their own compensation or the compensation of other employees 
or applicants. Executive Order 13665 amends Executive Order 11246, 
which prohibits employment discrimination because of race, color, 
religion, sex, sexual orientation, gender identity, or national origin, 
by revising the mandatory equal opportunity clauses that are included 
in Federal contracts and subcontracts, and federally assisted 
construction contracts, and creating contractor defenses. This final 
rule defines key terms used in Executive Order 13665 and adopts other 
key provisions in the notice of proposed rulemaking (NPRM). The final 
rule also adds a section to the implementing regulations for Executive 
Order 11246. This section not only describes potential defenses for 
contractors but also requires contractors to notify employees and job 
applicants of the nondiscrimination protection created by section 2(b) 
of Executive Order 13665 using existing methods of communicating to 
applicants and employees.
    The implementing regulations for Executive Order 11246 set forth 
the basic equal employment opportunity requirements that apply to 
Federal contractors and subcontractors.

DATES: Effective Date: These regulations are effective January 11, 
2016.

FOR FURTHER INFORMATION CONTACT: Debra A. Carr, Director, Division of 
Policy and Program Development, Office of Federal Contract Compliance 
Programs, 200 Constitution Avenue NW., Room C-3325, Washington, DC 
20210. Telephone: (202) 693-0104 (voice) or (202) 693-1337 (TTY). 
Copies of this rule in alternative formats may be obtained by calling 
(202) 693-0104 (voice) or (202) 693-1337 (TTY). The rule also is 
available on the Regulations.gov Web site at http://www.regulations.gov 
or on the OFCCP Web site at http://www.dol.gov/ofccp.

SUPPLEMENTARY INFORMATION:

Executive Summary

    The Office of Federal Contract Compliance Programs (OFCCP) is a 
civil rights and worker protection agency. OFCCP enforces an Executive 
Order and two laws that prohibit employment discrimination and require 
affirmative action by companies doing business with the Federal 
Government.\1\ Specifically, Federal contractors must not discriminate 
because of race, color, religion, sex, sexual orientation, gender 
identity, national origin, disability, or status as a protected 
veteran. They must also engage in affirmative action and provide equal 
employment opportunity without regard to race, color, religion, sex, 
sexual orientation, gender identity, national origin, disability, or 
status as a protected veteran. OFCCP evaluates the employment practices 
of nearly 4,000 Federal contractors and subcontractors \2\ annually, 
and investigates individual complaints. OFCCP also engages in outreach 
to employees of Federal contractors to educate them about their rights, 
and provides technical assistance to contractors on their 
nondiscrimination and affirmative action obligations.
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    \1\ Executive Order 11246, Sept. 24, 1965, 30 FR 12319, 12935, 3 
CFR, 1964-1965, Comp., p. 339, as amended; Section 503 of the 
Rehabilitation Act of 1973, as amended, 29 U.S.C. 793, (Section 
503); and the Vietnam Era Veterans' Readjustment Assistance Act of 
1974, as amended, 38 U.S.C. 4212 (VEVRAA).
    \2\ References to ``contractors'' throughout the Final Rule are 
intended to include both contractors and subcontractors unless 
stated to the contrary.
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    These compliance evaluations and complaint investigations determine 
contractor compliance with VEVRAA, which prohibits employment 
discrimination against certain protected veterans. OFCCP also 
determines compliance with Section 503, which prohibits employment 
discrimination against qualified individuals with disabilities. 
Finally, OFCCP assesses compliance with Executive Order 11246, as 
amended, which prohibits employment discrimination because of race, 
color, religion, sex, sexual orientation, gender identity, or national 
origin. Compensation discrimination is one form of discrimination 
prohibited by Executive Order 11246.
    On April 8, 2014, President Obama issued Executive Order 13665, 
entitled ``Non-Retaliation for Disclosure of Compensation 
Information,'' amending section 202 of Executive Order 11246 to 
prohibit Federal contractors from discharging or discriminating in any 
way against employees or applicants who inquire about, discuss, or 
disclose their own compensation or the compensation of another employee 
or applicant.\3\ This final rule adopts key provisions in the NPRM \4\ 
to promulgate new regulations implementing Executive Order 13665, which 
apply to covered federal contracts and federally assisted construction 
contracts. The provisions of this final rule and Executive Order 11246, 
as amended by Executive Order 13665, apply to covered contracts entered 
into or modified on or after the rule's effective date. Modified 
contracts are contracts with any alteration in their terms and 
conditions, including supplemental agreements, amendments, and 
extensions. See 41 CFR 60-1.3 Definitions (definition of ``Government 
contract'').
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    \3\ Executive Order 13665, Non-Retaliation for Disclosure of 
Compensation Information, 79 FR 20749 (April 11, 2014).
    \4\ Government Contractors, Prohibitions Against Pay Secrecy 
Policies and Actions, 79 FR 55712 (Sept. 17, 2014).
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    Despite the existence of laws protecting workers from gender-based 
compensation discrimination for more than five decades, a pay gap 
between men and women persists today. Among the possible contributing 
factors to the enduring pay gap is the prevalence of workplace 
prohibitions on discussing compensation.
    A comparison of average annual wage data from 2013 reveals that 
women make 78 cents for every dollar that men make.\5\ Data on average 
weekly wages from the Bureau of Labor Statistics (BLS) for the same 
year shows a similar gap, with women making 82 cents for every dollar 
that men make.\6\ The wage

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gap is wider for some women of color when compared to non-Hispanic 
white men. On average in 2014, BLS median weekly earnings data shows 
that African-American women earn 68 cents and Latina women earn 61 
cents, and Asian women earn 94 cents for every dollar earned by a non-
Hispanic white man.\7\ Census data shows similar disparities, with 
African-American women making 64 cents, Latina women making 56 cents, 
and Asian women making 86 cents per dollar earned by a non-Hispanic 
white man.\8\ Research has found that many factors contribute to the 
wage gap, including discrimination and occupational differences.
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    \5\ U.S. Bureau of the Census, Income and Poverty in the United 
States: 2013 (Sept. 2014), available at https://www.census.gov/library/publications/2014/demo/p60-249.html (last accessed Feb.10, 
2015). Calculation of the pay gap using average weekly wages has the 
advantage of accounting for differences in hours worked, which is 
not captured in calculations using annual wage data. However, 
calculations using weekly wage data do not account for forms of 
compensation other than those paid as weekly wages, unlike annual 
wage calculations. While neither method is perfect, analyses that 
account for factors like occupation and qualifications further 
support the existence of a significant gender-based pay disparity.
    \6\ Bureau of Labor Statistics, U.S. Department of Labor, 
Highlights of Women's Earnings (Dec. 2014) (averaging annual data 
collected from the Current Population Survey, Median Weekly Earnings 
of Full-Time Wage and Salary Workers), available at http://www.bls.gov/opub/reports/cps/highlights-of-womens-earnings-in-2013.pdf (last accessed Feb.10, 2015).
    \7\ Bureau of Labor Statistics, U.S. Department of Labor, 
Current Population Survey, Median usual weekly earnings of full-time 
wage and salary workers by selected characteristics, annual 
averages, available at http://www.bls.gov/news.release/wkyeng.t07.htm (last accessed Feb.10, 2015).
    \8\ U.S. Census, Current Population Survey, 2012 Person Income, 
``Table PINC-10: Wage and Salary Workers--People 15 Years Old and 
Over, by Total Wage and Salary Income in 2012, Work Experience in 
2012, Race, Hispanic Origin, and Sex,'' (comparing median wage for 
people working 50 or more weeks), available at https://www.census.gov/hhes/www/cpstables/032013/perinc/pinc10_000.htm (last 
accessed Feb.10, 2015).
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    The impact of the wage gap remains a significant problem, 
especially for the working poor. While the gap may not be larger for 
poor women when compared to more affluent women, the economic impact of 
the disparity is greater for poor women who are already in financial 
jeopardy. U.S. Census data show that more than 15.2 million family 
households in the United States are headed by women.\9\ Nearly 31 
percent of these families, or nearly 4,700,000 family households, have 
incomes that fall below the poverty level.\10\ Eliminating the wage gap 
could go a long way toward closing the overall income gap and reducing 
the poverty rate for working women. A 2014 report by Maria Shriver and 
the Center for American Progress found that a third of all American 
women are living at or near a space called ``the brink of poverty.'' 
\11\ According to the report, this equals to 42 million women plus the 
28 million children who depend on them.
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    \9\ U.S. Census Bureau, American Community, ``Survey 1-Year 
Estimates 2013, Table DP02: Selected Social Characteristics in the 
United States,'' available at http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk (last accessed 
Aug. 4, 2015). The calculation uses family households headed by 
females living in a household with family and no husband. A family 
household includes a householder, one or more people living in the 
same household who are related to the householder, and anyone else 
living in the same household.
    \10\ U.S. Census Bureau, American Community Survey, ``1-Year 
Estimates 2013, Geographies: United States, Table DP03: Selected 
Economic Characteristics,'' available at http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_13_1YR_DP03&prodType=table (last accessed 
Aug. 4, 2015). To determine whether a household falls below the 
poverty level, the U.S. Census Bureau considers the income of the 
householder, size of family, number of related children, and, for 1- 
and 2-person families, age of householder. The poverty threshold in 
2013 was $18,769 for a single householder and two children under 18.
    \11\ Maria Shriver, ``The Shriver Report A Women's Nation Pushes 
Back from the Brink,'' Executive Summary (Jan. 2014). The ``brink'' 
is defined in the report as less than 200 percent of the federal 
poverty line, or about $47,000 per year for a family of four.
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    Generally, it is true that men and women tend to work in different 
industries and occupations. Women are much more likely than men to be 
clustered in a limited number of occupations, with slightly less than 
half or 44 percent of all working women employed in the 20 most common 
occupations for women. These occupations include secretaries and 
administrative assistants, registered nurses, and school teachers.\12\ 
Only about 35 percent of men are employed in the 20 most common 
occupations for male workers, including truck drivers, managers, and 
supervisors.\13\ According to some studies, these differences in 
occupations result in occupational segregation that significantly 
contributes to the wage gap. Occupational segregation contributes to 
the suppression of earnings for women as research shows that women-
dominated industries pay lower wages than male-dominated industries 
requiring similar skill levels,\14\ and the effect is more pronounced 
in jobs requiring higher levels of education.\15\ Women are more likely 
to be concentrated in low-wage work, and they make up the majority of 
minimum-wage workers in the United States.
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    \12\ Sarah Jane Glynn, Center for American Progress, 
``Explaining the Gender Wage Gap,'' (May 2014), available at https://www.americanprogress.org/issues/economy/report/2014/05/19/90039/explaining-the-gender-wage-gap/ (last accessed Aug. 3, 2015). See 
also Jane Farrell and Sarah Jane Glynn, ``What Causes the Gender 
Wage Gap?,'' (Apr. 10, 2013). This report concluded that more than 
40 percent of the gender wage gap is ``unexplained,'' meaning that 
there is no obvious measureable reason for a difference in pay. This 
leaves us with possible explanations that range from overt sexism to 
unintentional gender-based discrimination to reluctance among women 
to negotiate for higher pay.
    \13\ Sarah Jane Glynn, Center for American Progress, 
``Explaining the Gender Wage Gap,'' (May 2014), available at https://www.americanprogress.org/issues/economy/report/2014/05/19/90039/explaining-the-gender-wage-gap/ (last accessed Aug. 3, 2015).
    \14\ Sarah Jane Glynn, Center for American Progress, 
``Explaining the Gender Wage Gap,'' (May 2014), available at https://www.americanprogress.org/issues/economy/report/2014/05/19/90039/explaining-the-gender-wage-gap/ (last accessed Aug. 3, 2015). See 
also National Women's Law Center, ``The 10 Largest Jobs Paying Under 
$10.10/Hour Are Majority Women'' (Apr. 2013), available at http://www.nwlc.org/sites/default/files/pdfs/womendominatedminwageoccupations.pdf.
    \15\ Sarah Jane Glynn, Center for American Progress, 
``Explaining the Gender Wage Gap,'' (May 2014), available at https://www.americanprogress.org/issues/economy/report/2014/05/19/90039/explaining-the-gender-wage-gap/ (last accessed Aug. 3, 2015).
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    Although some of the wage gap is due to occupational segregation, 
that does not mean that the wage difference can be overcome by women 
making different career or work choices. In part, the gap is due to 
factors such as sex discrimination, including gender stereotyping.\16\ 
By age 65, the typical woman will have lost $420,000 over her working 
lifetime because of the earnings gap. This is based on median annual 
earnings for full-time, year-round workers at age 25 and above in 2013 
and assumes that the woman works every year between ages 25 and 65.\17\
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    \16\ Shelley J. Correll, Stephan Benard, and In Paik, ``Getting 
a Job: Is There a Motherhood Penalty?'' American Journal of 
Sociology, (Mar. 2007): 1297-1339, available at http://gender.stanford.edu/sites/default/files/motherhoodpenalty_0.pdf. 
This study found that, when comparing equally qualified women job 
candidates, women who were mothers were recommended for 
significantly lower starting salaries, perceived as less competent, 
and less likely to be recommended for hire than non-mothers.
    \17\ Calculation is based on U.S. Census Table P-24: Historical 
Income Tables: People. See Alex Wall, ``Why It's Time for Equal 
Pay,'' available at https://www.whitehouse.gov/blog/2015/04/15/tens-thousands-people-have-shared-why-its-time-equal-pay (last accessed 
Aug. 21, 2015).
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    In every racial group, women earn less than their male 
counterparts, according to U.S. Census Bureau data analyzed by the 
Institute for Women's Policy Research (IWPR).\18\ In addition to 
demonstrating a wage gap between men and women, the research also 
reveals a wage gap amongst various racial groups. Moreover, at the 
beginning of 2015, median weekly earnings for African-American men 
working at full-time jobs totaled $680 per week, only 76 percent of the 
median for white men ($897), according to BLS data, and the median 
weekly earnings for African-American women equaled $611 per week, only 
68 percent of the median for white men.\19\

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A study based on the hiring pattern of male and female workers in the 
state of New Jersey found that employers offered African-Americans 
lower wages, compared to their white counterparts, when re-entering the 
job market after periods of unemployment.\20\ The study showed that the 
pay gap between these two groups is typically 30 percent.\21\ 
Controlling for various factors such as skills and previous earnings, 
the study found that up to a third of this pay gap could be attributed 
to racial discrimination in the labor market.\22\ Similarly, a study 
based on National Longitudinal Survey data found that the pay gap 
between African-Americans and whites continues to exist, even after 
controlling for abilities and schooling choices.\23\
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    \18\ Id. at 2. This study shows that Hispanic men and women, 
grouped together, had the smallest within-group gap yet earned the 
least when compared to the other major racial and ethnic groups 
including white, Asian American, and African-American. Asian 
Americans earned the most as a group yet had the largest within-
group gap.
    \19\ Bureau of Labor Statistics, U.S. Department of Labor, 
``Current Population Survey, Median usual weekly earnings of full-
time wage and salary workers by selected characteristics, annual 
averages,'' available at http://www.bls.gov/news.release/wkyeng.t07.htm (last accessed Feb.12, 2015).
    \20\ Roland G. Fryer Jr. et al., Racial Disparities in Job 
Finding and Offered Wages (2013), at 27, available at, http://scholar.harvard.edu/files/fryer/files/racial_disparities_in_job_finding_and_offered_wages.pdf (last 
accessed April 29, 2014).
    \21\ Id. at 29.
    \22\ Id.
    \23\ Sergio Urzua, ``Racial Labor Market Gaps: The Role of 
Abilities and Schooling Choices,'' 43.4 J. Hum. Resources, 919, 919-
971.
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    Many of the studies analyzing pay disparities for Hispanic 
populations focus on differences in education and age as compared to 
white workers.\24\ However, even after analyzing the effect of these 
factors, these studies showed that these factors do not account for the 
entire pay gap for Hispanics.\25\
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    \24\ Richard Fry & B. Lindsay Lowell, ``The Wage Structure of 
Latino-Origin Groups across Generations,'' 45 Indus. Relations 2 
(2006); Abelardo Rodriguez and Stephen Devadoss, ``Wage Gap between 
White Non-Latinos and Latinos by Nativity and Gender in the Pacific 
Northwest,'' U.S.A., 4 Journal of Management and Sustainability 1 
(2014).
    \25\ Id.
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    Potentially nondiscriminatory factors can explain some of the 
gender wage differences, but accounting for them does not account for 
the full pay gap.\26\ Additionally, women earn less even within 
occupations. In a recent study of newly trained doctors, after 
considering the effects of specialty, practice setting, work hours and 
other factors, the gender pay gap was nearly $17,000 in 2008.\27\ 
Catalyst, a nonprofit research organization, reviewed 2011 government 
data showing a gender pay gap for women lawyers,\28\ and that data 
confirms that the gap exists for a range of professional and technical 
occupations.\29\ In fact, according to a study by IWPR that used 2011 
information from BLS, women frequently earn less than men within the 
same occupations.\30\ Despite differences in the types of jobs women 
and men typically perform, women earn less than men in male dominated 
occupations such as managers, software developers and CEO's and even in 
those jobs commonly filled by women such as teachers, nurses and 
receptionists.\31\
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    \26\ U.S. Department of Commerce Economics and Statistics 
Administration and the Office of Management and Budget, ``Women in 
America: Indicators of Social and Economic Well-Being,'' (March 
2011), available at http://www.whitehouse.gov/sites/default/files/rss_viewer/Women_in_America.pdf (last accessed March 7, 2015). This 
report found that while earnings for women and men typically 
increase with higher levels of education, male-female pay gap 
persists at all levels of education for full-time workers (35 or 
more hours per week), according to 2009 BLS wage data. See, e.g., 
June Elliot O'Neill, ``The Gender Gap in Wages, Circa 2000,'' 
American Economic Review (May 2003). Even so, after controlling for 
differences in skills and job characteristics, women still earn less 
than men. Council of Economic Advisers, ``Explaining Trends in the 
Gender Wage Gap,'' (June 1998), http://clinton4.nara.gov/WH/EOP/CEA/html/gendergap.html (last accessed March 6, 2015). Ultimately, the 
research literature still finds an unexplained gap exists even after 
accounting for potential explanations, and finds that the narrowing 
of the pay gap for women has slowed since the 1980's. Joyce P. 
Jacobsen, The Economics of Gender 44 (2007); Francine D. Blau and 
Lawrence M. Kahn, ``The U.S. Gender Pay Gap in the 1990s: Slowing 
Convergence,'' 60 Industrial and Labor Relations Review 45 (2006).
    \27\ Anthony T. LoSasso, et al., ``The $16,819 Pay Gap For Newly 
Trained Physicians: The Unexplained Trend of Men Earning More Than 
Women,'' 30 Health Affairs 193 (2011) available at http://content.healthaffairs.org/content/30/2/193.abstract (last accessed 
Feb.13, 2015).
    \28\ Catalyst, ``Catalyst Quick Take: Women in Law in Canada and 
the U.S.,'' (2015) http://www.catalyst.org/knowledge/women-law-us 
(last accessed Feb.13, 2015).
    \29\ Bureau of Labor Statistics, ``Median weekly earnings of 
full-time wage and salary workers by detailed occupation and sex,'' 
2014, available at http://www.bls.gov/cps/cpsaat39.pdf (last 
accessed Feb.13, 2015).
    \30\ Ariane Hegewisch, Claudia Williams, Vanessa Harbin, ``The 
Gender Wage Gap by Occupation,'' (2012), available at http://www.iwpr.org/publications/pubs/the-gender-wage-gap-by-occupation-1/ 
(last accessed Feb.13, 2015).
    \31\ Id.
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    These statistics provide an overview of the full societal impact of 
the pay gap, which will not be fully addressed by this rule. For 
example, such general information about pay differentials among men and 
women includes pay differentials that may not be attributed to 
discrimination. In addition, these statistics include all employers and 
all employees in the U.S., whereas this final rule applies only to 
Federal contractors and their employees. Therefore, the potential 
impact of this rule in reducing the pay gap would be much smaller than 
the impact of eliminating the pay gap among all working men and women.
    Whether communicated through a written employment policy or through 
informal means, restrictions on revealing compensation can conceal 
compensation disparities that exist among employees. Although very 
little research has been conducted about pay secrecy policies and their 
effects, a recent survey by IWPR provides some insight into the 
prevalence of workplace rules against discussing compensation. The 
survey found that 51 percent of female respondents and 47 percent of 
male respondents reported that the discussion of wage and salary 
information is either discouraged or prohibited and/or could lead to 
punishment.\32\ Further, the IWPR study found that institutional 
barriers to discussing compensation were much more common among private 
employers than among public employers.\33\ Sixty-two percent (62 
percent) of women and 60 percent of men working for private employers 
reported that discussion of wage and salary information is discouraged 
or prohibited, compared to only 18 percent of women and 11 percent of 
men working in the public sector.\34\
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    \32\ Institute for Women's Policy Research, ``Quick Figures: Pay 
Secrecy and Wage Discrimination,'' IWPR #Q016, January 2014, 
available at http://www.iwpr.org/publications/pubs/pay-secrecy-and-wage-discrimination-1 (last checked Feb.13, 2015).
    \33\ Id. See also Rafael Gely and Leonard Bierman, ``Love, Sex 
and Politics? Sure. Salary? No Way': Workplace Social Norms and the 
Law,'' 25 Berkeley J. Emp. & Lab. L. 167, 171 (2004) (arguing that 
pay-secrecy policies are the prevalent workplace norm); cf. Matthew 
A. Edwards, ``The Law and Social Norms of Pay Secrecy,'' 26 Berkeley 
J. Emp. & Lab. L. 41 (2005) (rebutting Gely and Bierman's 
conclusions about the prevalence and causes of pay secrecy).
    \34\ Institute for Women's Policy Research, ``Quick Figures: Pay 
Secrecy and Wage Discrimination,'' IWPR #Q016, January 2014, 
available at http://www.iwpr.org/publications/pubs/pay-secrecy-and-wage-discrimination-1 (last accessed Feb.13, 2015).
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    In a different survey of private sector employers, 49 percent of 
the employers surveyed admitted having a specific policy regarding pay 
secrecy or confidentiality issues,\35\ and most managers agreed with 
the use of pay secrecy policies.\36\ This survey also found that only 1 
in 14 employers

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actively adopted ``pay openness'' policies.\37\
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    \35\ Rafael Gely and Leonard Bierman, ``Pay Secrecy/
Confidentiality Rules and The National Labor Relations Act,'' 
(citing HRnext, ``More Employers Ducking Pay Confidentiality Issue: 
HRnext Survey Shows Many View it As Hot Potato,'' http://www2.hrnext.conVabout/pr/pay-survey.cfm (Apr. 4, 2001)), 6 U. Pa. 
Journal of Labor and Employment Law 125 (2003), available at http://scholarship.law.upenn.edu/cgi/viewcontent.cgi?article=1162&context=jbl (last accessed March 6, 
2015).
    \36\ Id. at 122-123,125 (citing Charles M. Futrell and Omer C. 
Jenkins, ``Pay Secrecy Versus Pay Disclosure for Salesmen: A 
Longitudinal Study,'' 15 J. Marketing Res. 214 (1978) (``Most sales 
managers contend that peer pay information should not be disclosed 
to their salesmen.''); and Mary Williams Walsh, ``Workers Challenge 
Employer Policies on Pay Confidentiality,'' New York Times, July 28, 
2000, available at http://www.nytimes.com/library/financial/O72800discuss-pay.html (discussing wrongful termination actions 
brought by employees who violated employer wage confidentiality 
policies).
    \37\ Id. at 125 (citing HRnext Survey).
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    Prohibitions on discussing pay prevent employees from knowing 
whether they are underpaid in comparison to their peers. Underpaid 
employees, who may be paid less because of their gender or race, will 
remain unaware of the disparity if compensation remains hidden. Thus, 
they are precluded from exercising their rights through OFCCP's 
complaint procedures. OFCCP enforces the prohibition against 
compensation discrimination by investigating class complaints of 
compensation discrimination and conducting compliance evaluations under 
Executive Order 11246.\38\ If a contractor's employees are unaware of 
how their compensation compares to that of employees with similar jobs 
because the risk of punitive action inhibits discussions about 
compensation, employees will not have the information they need to 
assert their rights. An unwarranted difference in rates of pay, or 
other forms of compensation, that is based on a protected status like 
sex or race will likely continue and potentially grow more severe over 
time. Simply allowing employees to discuss compensation may help bring 
illegal compensation practices to light and allow employees to obtain 
appropriate legal redress.
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    \38\ Pursuant to a Memorandum of Understanding between OFCCP and 
the Equal Employment Opportunity Commission (EEOC), OFCCP generally 
refers individual discrimination complaints subject to both 
Executive Order 11246 and Title VII of the Civil Rights Act of 1964 
to the EEOC for investigation, but keeps systemic discrimination 
complaints, 76 FR 71029 (Nov. 16, 2011).
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    Policies prohibiting employee conversations about compensation can 
also serve as a significant barrier to Federal enforcement of the laws 
against compensation discrimination. OFCCP primarily enforces 
prohibitions in Executive Order 11246 against pay and other forms of 
compensation discrimination by conducting compliance evaluations of 
Federal contractors.\39\ While OFCCP typically develops statistical 
analyses to establish systemic compensation discrimination, 
interviewing managers, human resources professionals, and employees 
potentially impacted by discriminatory compensation is also an 
invaluable way for the agency to determine whether compensation 
discrimination in violation of Executive Order 11246 has occurred and 
to support its statistical findings. Therefore, the accuracy of OFCCP's 
investigative findings depends in part on the willingness of a 
contractor's employees to speak openly with OFCCP investigators about a 
contractor's compensation practices. If a contractor has a policy or 
practice of punishing or discouraging employees from discussing their 
pay, the employees may be fearful and less forthcoming during 
interviews with OFCCP staff. Prohibiting discrimination against workers 
who discuss, inquire about, or disclose compensation will help dispel 
an atmosphere of secrecy around the topic of compensation and promote 
the agency's ability to uncover illegal compensation discrimination.
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    \39\ OFCCP reviews approximately 4,000 Federal contractors 
annually. These contractors are scheduled for compliance evaluations 
based on various sources of information, including federal 
procurement databases, Employer Information Reports (EEO-1 reports), 
Dun & Bradstreet (D&B) data, U.S. Census data, and statistical 
thresholds such as industry type and employee counts of federal 
contractor establishments. The scheduling process is ``neutral'' 
rather than ``random'' because it is based on a methodology that 
includes specific criteria. OFCCP does not target specific 
contractors.
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    The experience of Lilly Ledbetter demonstrates how pay secrecy 
enables illegal compensation discrimination. For Ledbetter, her 
employer's insistence on pay secrecy likely cost her the ability to 
seek justice for the compensation discrimination she suffered 
throughout her career. Ledbetter was employed at the Gadsden, Alabama 
plant of Goodyear Tire and Rubber Company. While there, she filed a 
charge with the EEOC alleging that she was paid a discriminatorily low 
salary as an area manager because of her sex in violation of Title VII 
of the Civil Rights Act of 1964.\40\ Ledbetter discovered how much her 
male co[hyphen]workers were earning years after she began working at 
the plant and only after she found an anonymous note in her mailbox 
disclosing her pay and the pay of three males who were doing the same 
job. In an interview, she said that her employer told her, ``You do not 
discuss wages with anyone in this factory.'' \41\ The Supreme Court, in 
2007, issued its ruling in Ledbetter v. Goodyear Tire & Rubber Co. 
holding that Ledbetter's claim was untimely.\42\ The Court held that 
Ledbetter was required to have filed her claim within 180 days of when 
Goodyear initially made its discriminatory pay decision, regardless of 
whether Ledbetter's paycheck continued to reflect the discriminatory 
pay policy and regardless of when she discovered that Goodyear was 
discriminating against her. Congress addressed the timing issues in the 
Lilly Ledbetter Fair Pay Act of 2009,\43\ which states that each 
discriminatory paycheck is a separate violation and resets the 180-day 
limitations period. It remains necessary, however, to end pay secrecy 
policies so that workers can more easily discover if they are victims 
of discriminatory pay policies.
---------------------------------------------------------------------------

    \40\ White House National Pay Task Force, ``Fifty Years After 
the Equal Pay Act: Assessing the Past, Taking Stock of the Future,'' 
June 2013, available at http://www.whitehouse.gov/sites/default/files/equalpay/equal_pay_task_force_progress_report_june_2013_new.pdf, citing TAP 
Talks with Lilly Ledbetter. The American Prospect, April 23, 2008, 
http://www.prospect.org/cs/articles?article=tap_talks_with_lilly_ledbetter (last accessed 
Feb.13, 2015).
    \41\ Id. at 22.
    \42\ Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 
(2007).
    \43\ Public Law 111-2, 123 Stat. 5 (Jan. 29, 2009).
---------------------------------------------------------------------------

    Pay secrecy policies interfere with the Federal Government's 
interest in efficiency in procurement. Economy and efficiency in 
Federal procurement require that contractors compensate employees under 
merit-based practices, without any barriers to success. As set out in 
Executive Order 13665, the Federal contractors with pay secrecy 
practices are subject to enforcement actions and, as a result, may face 
a higher risk of disruption, delay and expense associated with contract 
performance. Allowing discussions of pay by employees of these 
contractors will contribute to minimizing these risks. This final rule 
eliminates some of the barriers created by pay secrecy policies and 
helps ensure that Federal contractors compensate employees based on 
merit.
    In addition to disruptions and delays, Federal contractors with pay 
secrecy policies may also experience a decrease in worker productivity. 
Workers, due to a lack of compensation information, may experience a 
reduction in performance motivation and are likely to perceive their 
employer as unfair or untrustworthy. Both reduce work productivity.\44\ 
For example, one study has shown that workers without access to 
compensation information are less satisfied and less productive.\45\ 
The precise reasons for this drop in productivity have not been 
investigated; however, a number of theories can be drawn from the 
empirical evidence gathered in this field. Two such theories on the 
loss of productivity are that employees are unable to link their 
performance or their worth to the organization, and that employer 
secrecy policies foster distrust of management.
---------------------------------------------------------------------------

    \44\ Adrienne Colella, Ramona L. Paetzold, Asghar Zardkoohi, and 
Michael J. Wesson, ``Exposing Pay Secrecy,'' 32 Acad. of Management 
Rev. 55, 58 (2007).
    \45\ Peter Bamberger and Elena Belogolovsky, ``The Impact of Pay 
Secrecy on Individual Task Performance,'' 63 Personnel Psychol. 965, 
967 (2010).
---------------------------------------------------------------------------

    The first of these theories is based on the idea that because of 
pay secrecy

[[Page 54938]]

policies, some workers do not know whether their own wages are 
reflective of job performance. This information gap makes it more 
difficult for workers to make informed choices about their own 
compensation and creates unnecessary barriers to enforcing laws against 
compensation discrimination. Information asymmetries provide an 
advantage and market power to the party with more information. When 
workers have access to more information about colleagues' compensation, 
salaries may be likely to be more closely linked to productivity on the 
job and compensation may be much less likely to be influenced by 
factors unrelated to job performance such as sex and race. As a result, 
workers with the ability to inquire about, discuss, and disclose 
compensation information may make informed decisions about their 
careers. These workers may become aware of their current value to the 
organization, but also of their potential value, based on information 
they receive about the salaries of longer tenured employees or 
employees in higher wage positions.
    This phenomenon has a unique consequence in labor markets where 
those involved in the transaction are people who, unlike machines, are 
likely to be affected by the information in terms of motivation and 
effort. In companies with pay secrecy policies, negative influences on 
productivity may stem from workers overestimating the lower limits of 
pay for others in similar positions leading to an inaccurate 
compression of the pay range, and causing a perception that increased 
work will not result in a corresponding reward.\46\ Workers with 
knowledge of compensation information are given accurate aspirational 
goals because they are aware of the salaries of the best-compensated 
employees, and can make rational decisions about the cost of increased 
effort at work in relation to the benefit of increased compensation 
resulting from success in the job.\47\
---------------------------------------------------------------------------

    \46\ Id. at 969.
    \47\ Lauren Weber and Rachel Emma Silverman, ``Workers Share 
Their Salary Secrets,'' Wall St. J. (April 16, 2013), available at 
http://online.wsj.com/news/articles/SB10001424127887324345804578426744168583824?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424127887324345804578426744168583824.html (last accessed Feb.13, 2015).
---------------------------------------------------------------------------

    The second theory is that worker distrust of corporate management 
may be another potential cause of the lag in productivity for workers 
subject to pay secrecy policies. Restrictions on sharing compensation 
information may create a sense that the company has something to hide 
with respect to compensating employees. Feelings of institutional 
unfairness may have a negative impact on workers' productivity.\48\
---------------------------------------------------------------------------

    \48\ See Bamberger and Belogolovsky supra note 44.
---------------------------------------------------------------------------

    Eliminating pay secrecy policies may have benefits beyond improving 
the productivity of Federal contractors and their employees. Generally, 
employers seek to provide opportunities for employees to advance within 
the corporate hierarchy because these employees will work harder to 
achieve goals and secure advancement. The result of this may be not 
only higher productivity and better quality, but also lower turnover, 
retention of organizational knowledge, and lower training and 
onboarding expenses.\49\ Employers, including Federal contractors, may 
encounter more difficulty achieving these benefits if they have pay 
secrecy policies. Another benefit of eliminating these policies is that 
younger employees and jobseekers view employers without these policies 
more favorably. A report found that younger employees value openness in 
general and are more suspicious of companies instituting pay secrecy 
rules.\50\
---------------------------------------------------------------------------

    \49\ Heather Boushey and Sarah Jane Glynn, ``There Are 
Significant Business Costs to Replacing Employees,'' Center for 
American Progress, Nov. 16, 2012, available at https://www.americanprogress.org/issues/labor/report/2012/11/16/44464/there-are-significant-business-costs-to-replacing-employees/ (last 
accessed Feb.13, 2015).
    \50\ Id.
---------------------------------------------------------------------------

    Under the final rule, contractors could also realize a reduction in 
the cost and burden associated with investigating baseless claims of 
compensation discrimination. Workers with knowledge of compensation 
relative to other employees can make more accurate determinations about 
the presence or absence of discriminatory practices.\51\ When workers' 
suspicions of discriminatory practices are discredited by information 
about other employees' compensation, the company avoids the costs and 
time associated with defending against discrimination lawsuits filed by 
employees.
---------------------------------------------------------------------------

    \51\ See Weber and Silverman supra note 46.
---------------------------------------------------------------------------

    Transparency about compensation also allows companies and their 
employees to identify and resolve unwarranted disparities in 
compensation prior to the employee filing a formal complaint or 
pursuing litigation. This additional openness about compensation could 
decrease discrimination complaints and investigations, saving both the 
contractor and the government time and money. Moreover, the employees 
may receive a faster remedy through internal resolution than would be 
possible through a complaint process or subsequent litigation.
    The preceding paragraphs present several reasons why the final rule 
could yield productivity benefits or cost savings for covered Federal 
contractors. However, OFCCP notes that, in addition to these benefits, 
and in order to achieve its goal of ensuring employees receive fair 
wages, this final rule is expected to result in increased wage payments 
to employees. This may be the result of employees using the information 
that they receive about the compensation paid to others to pursue 
increased wage payments. Employers may either voluntarily increase 
wages or be required to do so through actions taken by employees. These 
higher wage payments may, in some instances, result in net costs to 
covered contractors.

 I. Statement of Legal Authority

    Issued in 1965, and amended several times in the intervening years, 
Executive Order 11246 has two purposes. First, it prohibits covered 
Federal contractors and subcontractors from discriminating against 
employees and applicants because of race, color, religion, sex, sexual 
orientation, gender identity, or national origin.\52\ Second, it 
requires covered Federal contractors and subcontractors to take 
affirmative action to ensure that they provide equal opportunity in all 
aspects of employment. The nondiscrimination and affirmative action 
obligations of Federal contractors and subcontractors cover all aspects 
of employment, including rates of pay and other compensation.
---------------------------------------------------------------------------

    \52\ OFCCP generally interprets Executive Order 11246 
consistently with Title VII principles. To the extent that this rule 
uses terms or concepts borrowed from Title VII or other EEO 
statutes, however, their usage here is limited to claims brought 
pursuant to Executive Order 13665 and this final rule. OFCCP's 
interpretation of Executive Order 13665 does not in any way limit 
the enforcement of Title VII or other EEO statutes.
---------------------------------------------------------------------------

    The requirements in Executive Order 11246 generally apply to any 
business or organization that (1) holds a single Federal contract, 
subcontract, or federally assisted construction contract in excess of 
$10,000; (2) has Federal contracts or subcontracts that combined total 
in excess of $10,000 in any 12-month period; or (3) holds Government 
bills of lading, serves as a depository of Federal funds, or is an 
issuing and paying agency for U.S. savings bonds and notes in any 
amount.
    Pursuant to Executive Order 11246, receiving a Federal contract 
comes with a number of responsibilities. Section

[[Page 54939]]

202 of Executive Order 11246 requires every contractor to agree to 
comply with all provisions of Executive Order 11246 and the rules, 
regulations, and relevant orders of the Secretary of Labor. A 
contractor in violation of the Executive Order 11246 may have its 
contracts canceled, terminated, or suspended or may be subject to 
debarment after the opportunity for a hearing.\53\
---------------------------------------------------------------------------

    \53\ E.O. 11246, sec. 209(5); 41 CFR 60-1.27.
---------------------------------------------------------------------------

II. Major Proposed Revisions in the Final Rule

    The final rule protects employees' inquiries, discussions, and 
disclosures of their own pay and benefits, and similar employee 
activities related to the pay and benefits of others, if they obtained 
that information through ordinary means such as conversations with co-
workers. What the Order, and in turn this final rule, does not protect 
is the disclosure of others' pay information that an employee obtained 
as part of the employee's essential job functions. So, for example, if 
the employee making the disclosure to others had access to the 
information as a part of carrying out the essential job functions of 
the position of payroll administrator or benefits administrator, the 
contractor may be justified in taking adverse action based on that 
disclosure. This is because the employee, as payroll or benefits 
administrator, had access to the information as an essential part of 
the job and shared that information with others who do not otherwise 
have access to such information, which could undermine a contractor's 
ability to maintain necessary confidentiality concerning compensation. 
The nondiscrimination provision of the final rule may not protect this 
employee. The final rule specifically allows a contractor to take 
adverse action when an employee, with access to compensation 
information as part of an essential job function, discloses that 
information to others and the disclosure does not fall into one of the 
exemptions. The exemptions are disclosures made in response to a formal 
complaint or charge, in furtherance of an investigation, proceeding, 
hearing or action, including an investigation by the contractor, or 
disclosures consistent with the contractor's legal duty to furnish the 
information.
    Nothing in the final rule prohibits contractors from proactively 
promoting what they view as good about their pay policies and 
practices. As a best practice, contractors are encouraged to remove 
barriers to employees knowing that the contractor's pay and benefit 
practices are competitive with other companies within the same 
industry, and to promote their company's practices regarding 
advancement opportunities, merit increases in pay, and other factors 
that affect their employees' pay. The more a contractor's employees 
know about where they stand in terms of their pay within the company, 
the more the employees should feel that they have a stake in the 
company and its financial success.
    The final rule applies to all Federal contractors with contracts 
entered into or modified on or after the effective date of the rule 
that exceed $10,000 in value. The major provisions in the final rule:
     Revise the equal opportunity clause that is currently 
included in qualifying Federal Government contracts, federally assisted 
construction contracts, subcontracts, and purchase orders. The revised 
clause includes a provision prohibiting contractors from discharging, 
or in any manner discriminating against, any employee or applicant for 
employment because the employee or applicant inquired about, discussed, 
or disclosed the compensation of the employee or applicant or another 
employee or applicant.
     Define ``compensation'' in a manner consistent with the 
definition used by OFCCP in other existing guidance. Compensation is 
defined for these purposes as any payments made to, or on behalf of, an 
employee or offered to an applicant as remuneration for employment, 
including but not limited to salary, wages, overtime pay, shift 
differentials, bonuses, commissions, vacation and holiday pay, 
allowances, insurance and other benefits, stock options and awards, 
profit sharing, and retirement.
     Define ``compensation information'' as the amount and type 
of compensation provided to employees or offered to applicants, 
including but not limited to the desire of the contractor to attract 
and retain a particular employee for the value they are perceived to 
add to the contractor's profit or productivity; the availability of 
employees with like skills in the marketplace; market research about 
the worth of similar jobs in the relevant marketplace; job analysis, 
descriptions, and evaluations; salary and pay structures; salary 
surveys; labor union agreements; and contractor decisions, statements, 
and policies related to setting or altering employee compensation.
     Define ``essential job function'' to provide clarity about 
the positions covered by minimizing the degree of subjectivity involved 
in the determination. A job function may be considered essential if: 
(1) The access to compensation information is necessary in order to 
perform that function or other routinely assigned business task; or (2) 
the function or duties of the position include protecting and 
maintaining the privacy of employee personnel records, including 
compensation information.
     Establish a General defenses provision and an Essential 
job functions defense provision. Both provide contractor defenses to 
alleged violations of the nondiscrimination obligation for employees 
who inquired about, disclosed or discussed compensation. The nature of 
the defenses differs, however. The essential job functions defense, per 
the text of the Order, is a complete defense, such that if an employee 
discloses compensation information accessed or received through 
performance of an essential job function, unless the disclosure falls 
into one or more exemptions, the protections of the Order shall not 
apply and a contractor is allowed to take adverse action on those 
grounds. Contractors may also pursue a general defense if the 
discipline it imposes is for violation of a consistently and uniformly 
applied rule, policy, practice, agreement, or other instrument that 
does not prohibit, or tend to prohibit, employees or applicants from 
discussing or disclosing their compensation or the compensation of 
other employees or applicants. Given the difference in structure and 
function of this defense, this rule clarifies that it is not a complete 
defense, but rather is to be employed within the analytical framework 
discussed herein.
     Require contractors to disseminate a nondiscrimination 
provision, as prescribed by the Director of OFCCP and made available on 
the OFCCP Web site. Contractors must disseminate the provision to 
employees and applicants using their existing employee manuals or 
handbooks, and either electronically or by posting the prescribed 
provision in conspicuous places available to employees and job 
applicants.

III. Cost and Benefits

    This is not economically significant under section 3(f) of 
Executive Order 12866, though it is a ``significant regulatory 
action.'' The total cost of the final rule is $42,726,188.

[[Page 54940]]



                                      Table 1--Total Estimated Cost Summary
----------------------------------------------------------------------------------------------------------------
                                                                                                  Total cost per
                                                                       Hours           Costs          company
----------------------------------------------------------------------------------------------------------------
First Year Costs................................................       1,045,000     $42,726,188             $85
Recurring Costs.................................................               0               0               0
----------------------------------------------------------------------------------------------------------------

    The final rule provisions primarily require contractors to refrain 
from discriminatory activity, and notify employees, job applicants, and 
subcontractors of the nondiscrimination obligation using existing or 
common methods of communication. Notice to subcontractors is provided 
by amending the existing equal opportunity clause that contractors are 
currently required to include in their subcontracts and purchase 
orders. Contractors are not required to develop and deliver new staff 
or management training on the new nondiscrimination obligation in the 
final rule; however, providing such training is considered a best 
practice. The final rule also includes a defenses provision that allow 
contractors to pursue a defense to a claim of discrimination under 
certain circumstances.
    At an estimated cost of $85 per company, the final rule should 
result in benefits to workers who have historically experienced pay 
discrimination, and also transfers between groups of employees and from 
contractors, employers, or taxpayers to workers. The provisions in the 
final rule should help to ensure that fear of discrimination does not 
inhibit the employees of Federal contractors from sharing information 
with one another about their compensation. The final rule's provisions, 
as discussed earlier in the preamble, also promote economy and 
efficiency in Federal Government procurement, potentially contribute to 
the economic security of working women and their families, and support 
enforcement of nondiscrimination and equal employment opportunity 
protections.

Overview of the Final Rule

    Prior to issuing an NPRM, OFCCP conducted listening sessions with 
individuals from the contractor community, civil rights groups, and 
other interested parties to understand their perspectives on the scope 
and intent of Executive Order 13665 amending Executive Order 11246. 
After reviewing all of the comments on the NPRM, OFCCP's final rule 
incorporates many of the provisions in the NPRM. However, in order to 
clarify and focus the scope of one or more provisions in the final 
rule, while not increasing the estimated burden, the final rule revises 
some of the NPRM's provisions.
    OFCCP received 6,524 comments on the NPRM, of which 6,443 were the 
result of organized efforts using form letters generally in support of 
the NPRM. The remaining group of 81 unique or non-form letter comments 
represented diverse perspectives including one contractor, three law 
firms, four contractor associations, 13 civil rights organizations, 
four employee associations and unions, and 56 individuals. The 
commenters raised a range of issues, including concerns about the 
definitions of ``compensation,'' ``compensation information,'' and 
``essential job functions.'' A few commenters urged OFCCP to make the 
definition of ``compensation'' consistent with existing OFCCP Directive 
2013-03, Procedures for Reviewing Contractor Compensation Systems and 
Practices. The final rule adopts this definition.
    Another commenter was concerned that the proposed definition of 
``compensation information'' would include information covered by the 
attorney-client privilege or the attorney work product doctrine. As 
discussed in the section-by-section analysis, the final rule modifies 
the definition of compensation information. It provides more 
specificity as to the type of information covered but the final rule 
does not adopt other suggested changes related to concerns about 
attorney-client privilege or the attorney work product doctrine. The 
information that OFCCP could request would not involve legal opinions 
or advice, but would include factual data that informed the 
contractor's compensation decisions. The information sought is not 
significantly different in nature from what OFCCP could request during 
a compliance evaluation or complaint investigation.
    A definition for ``essential job functions'' that was proposed in 
the NPRM was based on the approach used in the Americans with 
Disabilities Act (ADA), as amended, and OFCCP's regulations 
implementing Section 503. The ``essential job function'' analysis and 
evidence in these instances relate to issues of reasonable 
accommodation and qualification. However, in the context of Executive 
Order 13665, the purpose or goal of the ``essential job functions'' 
analysis is different. Most of the commenters stated that the 
definition proposed in the NPRM for ``essential job functions'' is too 
broad. They proposed narrowing it to employees whose jobs are to 
maintain and protect the privacy of employee personnel records, and 
minimizing the amount of subjectivity available to contractors when 
determining what constitutes essential job functions. Others commented 
that the proposed definition of essential job functions was too narrow. 
Some commenters believed that the definition of essential job functions 
is inconsistent with the National Labor Relations Act (NLRA), and that 
the proposals in the NPRM are unnecessary because the NLRA covers pay 
secrecy issues under the right to discuss ``terms and conditions of 
employment.'' The final rule rejects the ADA, as amended, definition of 
essential job functions as proposed in the NPRM. The final rule also 
rejects the comparison made by some commenters with the NLRA. Instead, 
the final rule identifies two types or categories of essential job 
functions to minimize subjectivity and provide specificity for the 
types of job functions that would be covered as essential.
    Some commenters sought to expand the defenses provisions in the 
NPRM to allow contactors to take action when employees or applicants 
access information without the contractor's authorization, or violate 
contractor policies or other limitations created pursuant to applicable 
laws protecting private or confidential information. The final rule 
does not expand the defenses to include these recommendations, nor does 
it limit the ability of contractors to take disciplinary actions for 
violations of security policies and applicable privacy laws.
    A significant number of commenters raised issues about the legal 
framework that would apply to analyzing an alleged violation. 
Commenters were concerned that the NPRM proposed prohibiting 
``discrimination'' for conduct that is more appropriately considered 
``retaliation.'' The commenters noted that the proposed prohibition is 
not based on the employees' or applicants' membership in one of the 
protected categories under

[[Page 54941]]

Title VII. Similarly, several commenters wrote that it is unclear 
whether a violation would be analyzed under the ``motivating factor'' 
standard or ``but for'' standard under Title VII--the ``but for'' 
standard being applicable to retaliation claims while ``motivating 
factor'' applies to discrimination claims. Other commenters viewed the 
NPRM's prohibition as a nondiscrimination provision and asserted that 
the motivating factor standard would be appropriate. One commenter 
requested that OFCCP expressly state that it could use all Title VII 
discrimination remedies once a violation is established, including 
declaratory and injunctive relief, and attorneys' fees and costs. This 
final rule, as discussed in the section-by-section analysis, clarifies 
that adverse action taken by a contractor against an employee or 
applicant that violates the provisions of Executive Order 13665 and 
these regulations is appropriately viewed as discrimination and 
analyzed as such under that legal framework.
    Other commenters proposed that OFCCP require contractors to take 
additional measures to disseminate the equal opportunity clause such as 
requiring mandatory training to ensure that managers and employees 
understand the proposed protections. The commenters considered this 
training especially necessary where a contractor has longstanding pay 
secrecy policies or a culture of secrecy surrounding pay disclosures. 
One commenter would require training for departmental leadership 
responsible for handling compensation-related matters. Several 
commenters opposed mandatory training but encouraged it as a best 
practice, including one noting that training is no guarantee of 
effectiveness and that compliance is best achieved through clear 
guidance to contractors. Another commenter believed that training on 
the proposed new protections described in the NPRM could result in 
confusion, and encourage frivolous claims because employees are already 
aware that compensation discrimination is unlawful. The minority of the 
comments included one that proposed eliminating the equal opportunity 
clause altogether and focusing on collecting data. The final rule 
declines to require mandatory staff and management training.
    There were also comments associated with the cost and burden of the 
proposed rule, and the authority of OFCCP to undertake this rulemaking. 
Other comments on the NPRM addressed access to technical assistance and 
training, alternatives to the proposals in the NPRM, and the absence of 
a provision obligating the government to intervene and pay costs and 
attorneys' fees should a prime contractor terminate a subcontractor 
under a government mandate. OFCCP carefully considered all comments in 
the development of this final rule.

Section-By-Section Analysis

41 CFR Part 60-1--Obligations of Contractors and Subcontractors

SUBPART A--Preliminary Matters; Equal Opportunity Clause; Compliance 
Reports

Section 60-1.3 Definitions

    The proposed rule provided definitions for three terms used in 
Executive Order 13665. The NPRM defined the term ``compensation'' to 
include payments made to an employee, or on behalf of an employee, or 
offered to an applicant as remuneration for employment, including but 
not limited to salary, wages, overtime pay, shift differentials, 
bonuses, commissions, vacation and holiday pay, allowances, insurance 
and other benefits, stock options and awards, profit sharing, and 
retirement. This definition of ``compensation'' aligns with the 
definition OFCCP uses in the context of compensation discrimination 
investigations. OFCCP received three comments regarding the definition 
of ``compensation.'' One commenter generally supported the proposed 
definition. Another commenter supported the definition, but suggested 
expanding it to include ``sick time'' and ``paid leave.'' The third 
commenter stated that the definition of ``compensation'' in the NPRM 
differed from the definition of that term in OFCCP's Directive 2013-03, 
and further suggested that both the final rule and the Directive 
contain the same definition.
    After consideration, OFCCP does not believe it would be appropriate 
to include ``sick time'' and ``paid leave'' expressly in the definition 
of compensation. The NPRM's definition of ``compensation'' includes a 
general list of compensation types, but was not meant to be exhaustive. 
As a matter of consistency OFCCP will use the definition as stated in 
the NPRM, which aligns with the definition used in the context of its 
compensation discrimination investigations. OFCCP also notes the 
comment regarding the differing definitions in Directive 2013-03 and 
the NPRM, which advocates for making them consistent. However, OFCCP's 
guidance and regulations have historically included salary, wages, 
overtime pay, shift differentials, bonuses, commissions, vacation and 
holiday pay, allowances, insurance and other benefits, stock options, 
profit sharing and retirement. Though the definition of compensation in 
Directive 2013-03 and the final rule are not identical, Directive 2013-
03 should be interpreted in a manner consistent with the final rule.
    The proposed definition in the NPRM for the term ``compensation 
information'' is consistent with the approach described in OFCCP's 
existing compensation guidance.\54\ The definition covers information 
related to any aspect of compensation, including but not limited to 
information about the amount and type of compensation as well as 
decisions, statements, or actions related to setting or altering 
employees' compensation. OFCCP intended the proposed definition of 
``compensation information'' to be broad enough to encompass any 
information directly related to employee compensation, as well as the 
process or steps that led to a decision to award a particular type or 
amount of compensation. OFCCP received one comment on the definition of 
``compensation information.'' The commenter was critical of the 
proposed definition, stating that it was ``vaguely defined and may be 
deemed broad enough to encompass information related to compensation 
that is subject to the attorney-client privilege.'' OFCCP does not 
believe that the definition of ``compensation information'' would 
interfere with the operation of the attorney-client privilege. The 
attorney-client privilege only protects disclosure of communication; it 
does not protect the disclosure of the factual bases underlying the 
communication between a client and his or her attorney. Therefore, the 
privilege generally would not cover ``compensation information'' data. 
However, in reviewing the proposed definition, the final rule slightly 
modifies the definition so that it would mean the amount and type of 
compensation provided to employees or offered to applicants, including, 
but not limited to, factual information about the desire of the 
contractor to attract and retain a particular employee for the value 
they are perceived to add to the contractor's profit or productivity; 
the availability of employees with like skills in the marketplace; 
market research about the worth of similar jobs in the relevant 
marketplace; job analysis, descriptions, and evaluations; salary and 
pay structures; salary surveys; labor union agreements; and contractor

[[Page 54942]]

decisions, statements and policies related to setting or altering 
employee compensation. This modification in the final rule, by way of 
including several examples, provides contractors with additional 
guidance.
---------------------------------------------------------------------------

    \54\ Directive 2013-03, Procedures for Reviewing Contractor 
Compensation Systems and Practices, Feb. 28, 2013.
---------------------------------------------------------------------------

    Lastly, the NPRM also proposed a definition for the term 
``essential job functions.'' OFCCP had proposed to use the ADA, as 
amended, definition of essential job functions. Under that definition, 
a job function may be considered essential for any of several reasons, 
including: (1) The function may be essential because the reason the 
position exists is to perform that function; (2) the function may be 
essential because of the limited number of employees available among 
whom the performance of that job function can be distributed; and/or 
(3) the function may be highly specialized so that the incumbent in the 
position is hired for his or her expertise or ability to perform the 
particular function.
    OFCCP received a number of comments, some indicating that the ADA, 
as amended, definition was too narrow, and others indicating that it 
was too broad or needed further specificity. In response to these 
comments, the final rule modifies the proposal in the NPRM by 
eliminating the use of the ADA, as amended, definition of essential job 
functions in favor of identifying two categories or types of essential 
job functions. In the final rule, a job function may be considered an 
essential job function if: (1) The access to compensation information 
is necessary in order to perform that function or another routinely 
assigned business task; or (2) the function or duties of the position 
include protecting and maintaining the privacy of employee personnel 
records, including compensation information.
    Generally, those commenters who favored broadening the definition 
of ``essential job functions,'' and therefore the exception to the 
rule's protections, suggested that OFCCP adopt a definition that relies 
more on whether employees required access to confidential compensation 
information in the performance of their job duties, rather than on 
whether the employee's position description related to handling 
compensation information. One commenter noted that the complexity of 
large enterprises made it unrealistic that such employers could 
effectively operate through only selected employees whose 
``fundamental'' job duties involved access to pay information or whose 
job exists only to perform those functions or who have specialized 
expertise or ability somehow related to pay information. Another 
commenter suggested that the test for what constitutes an essential job 
function should rely on whether access to compensation information was 
granted as necessary to the performance of a legitimate, assigned 
business task. Another commenter suggested that the definition of 
``essential job functions'' should include all employees who have 
authorized access to an employer's compensation information, whether or 
not that access falls within the employee's primary job 
responsibilities.
    OFCCP agrees with many of these comments and has determined that a 
definition of ``essential job functions'' that is driven by the 
employee's position description, rather than the assigned tasks, could 
create confusion among employers in determining which employees are 
covered by the definition. Instead, the revised definition makes clear 
that employees performing job functions or routinely assigned tasks 
that require them to have access to confidential compensation 
information will be covered. Additionally, job functions that require 
protecting or maintaining the privacy of employee personnel records 
will be covered by the revised definition.
    Some commenters identified specific occupations that they thought 
should be covered by the definition, such as IT employees and program 
staffers who prepare bids for government contracts that regularly 
require access to compensation information, even if the position was 
not created for the purpose of handling compensation data. The 
determination of whether any particular employee received compensation 
information in the course of their ``essential job functions'' will be 
determined on a case-by-case basis by OFCCP. OFCCP agrees, however, 
that a position where the functions of that position require access to 
compensation information, or protecting and maintaining the privacy of 
employee personnel records, should generally fall within the definition 
of ``essential job functions.''
    Some commenters, on the other hand, were concerned that the 
exception could be construed too broadly, such that groups of employees 
with access to compensation information, such as human resource 
employees, could be denied protection under the regulations. Many of 
these commenters suggested that the employer's ability to assert 
``essential job functions'' as an affirmative defense must be limited 
to only a very narrow subset of employees whose job is to maintain and 
protect the privacy of employee personnel records. One commenter also 
suggested that the definition should focus on whether employees used 
compensation information as part of their essential job functions, 
rather than whether they have access to such information.
    The revised definition includes ``protecting and maintaining the 
privacy of employee personnel records'' as one category of ``essential 
job functions.'' However, it also includes functions and routinely 
assigned business tasks for which accessing compensation information is 
necessary to their performance. This definition provides adequate 
protection to employers in preserving the confidentiality of 
compensation and personnel data but limits the scope of the exception 
to those positions that require access to the information to perform 
their job functions and tasks. Furthermore, as discussed below, the 
application of the ``essential job functions'' defense is narrowed by 
the fact that even employees in positions covered by the definition are 
protected if they discuss compensation information that they obtained 
from a source outside of their essential job functions, or if they 
discuss information relating to their own possible claim of 
compensation discrimination, or if they discuss compensation 
information of others accessed within their essential job functions so 
long as the discussion takes place internally with a management 
official of the contractor or while using the contractor's internal 
complaint process.
    Some of the commenters favoring a narrow interpretation also wanted 
the definition of ``essential job functions'' to rely less on 
subjective factors. They suggested that an employer's judgment should 
not be given conclusive weight on the question of what constitutes an 
essential job function. The revised definition replaces the more 
subjective factors under the ADA, as amended, definition with two 
categories that more clearly identify which classes of job functions 
should be deemed essential for purposes of these regulations. As noted 
in paragraph 3 of the regulatory definition, this definition of 
``essential job functions'' is limited to the discrimination claims 
governed by Executive Order 13665 and its implementing regulations, and 
does not apply to claims brought pursuant to other EEO laws.

Section 60-1.4 Equal Opportunity Clause

    As proposed in the NPRM, the final rule revises the equal 
opportunity clause in Sec.  60-1.4(a) and Sec.  60-1.4(b) to include 
the new nondiscrimination provision. Section 60-1.4 requires 
contracting agencies to include this

[[Page 54943]]

equal opportunity clause in government contracts and modifications to 
government contracts if the clause was not included in the original 
contract. By accepting Federal contracts, contractors accept the 
discrimination and affirmative action requirements contained in the 
equal opportunity clause and agree to include the requirements 
contained in the clause in their subcontracts and purchase orders 
unless exempted by law, regulations, or order of the Secretary of the 
U.S. Department of Labor.
    The final rule revises Sec.  60-1.4(a) by inserting a new paragraph 
3 into the equal opportunity clause and by renumbering the subsequent 
paragraphs in the clause. The text of the new paragraph in Sec.  60-
1.4(a) is identical to the text in section 2(b) of Executive Order 
13665. Under the terms of this new provision, it is unlawful for 
contractors to discharge or discriminate in any other manner against 
any employee or job applicant because such employee or applicant has 
inquired about, discussed, or disclosed the compensation of the 
employee or applicant or another employee or applicant. This provision 
does not apply when an employee with access to the compensation 
information of other employees or job applicants as a part of such 
employee's essential job functions discloses the compensation of such 
other employees or applicants to individuals who do not otherwise have 
access to such information, unless such disclosure is in response to a 
formal complaint or charge, in support of an investigation, proceeding, 
hearing, or action, including an investigation conducted by the 
employer, or is consistent with the contractor's legal duty to furnish 
information.
    Under the equal opportunity clause in Sec.  60-1.4(b), 
administering agencies involved in federally assisted construction 
through grants, loans, insurance, or guarantee must include text in 
their contracts for construction work informing the funding applicant 
that the equal opportunity clause must be incorporated into the 
contracts and contract modifications if they are funded in whole or in 
part by Federal money. This section further provides the exact language 
for the equal opportunity clause. As with Sec.  60-1.4(a), by accepting 
funding the contractor agrees to assume the nondiscrimination and 
affirmative action obligations of Executive Order 11246, including 
incorporating the equal opportunity clause into their subcontracts and 
purchase orders unless exempted by law, regulations, or order of the 
Secretary of the U.S. Department of Labor. The final rule revises Sec.  
60-1.4(b) by inserting a new paragraph 3 into the equal opportunity 
clause, and renumbering the subsequent paragraphs in the clause. The 
text of the new paragraph is identical to the text in section 2(b) of 
Executive Order 13665.
    OFCCP made changes to Sec.  60-1.4 with the intent to eliminate the 
secrecy and fear surrounding a discussion or disclosure of compensation 
information. When employees lack access to compensation information it 
is more difficult for them to make informed choices about their own 
compensation, and it creates unnecessary barriers to filing complaints 
with civil rights agencies such as OFCCP. Secrecy may also have a 
detrimental impact on business productivity, employee morale and 
retention, and could drive increased cost related to human resources 
management as discussed earlier in the preamble to the final rule.\55\ 
Studies have shown that these pay secrecy policies are common among 
contractors and foster negative consequences for some employees and 
applicants for employment.\56\ The final rule does not require 
employees to share information about compensation with other employees.
---------------------------------------------------------------------------

    \55\ Cappelli, Peter, and Kevin Chauvin, ``An Interplant Test of 
the Efficiency Wage Hypothesis,'' Quarterly Journal of Economics, 
106, 769-787, available at http://dx.doi.org/10.2307/2937926(1991); 
Reich, Michael, Dube, Arindrajit, and Naidu, Suresh, ``Economics of 
Citywide Minimum Wages,'' Institute for Industrial Relations, 
University of California, Berkeley Policy Brief (2005); Cowherd, 
D.M. and Levine, D.I., ``Product Quality and Pay Equity Between 
Lower-level Employees and Top Management: An Investigation of 
Distributive Justice Theory,'' Administrative Science Quarterly 37: 
302-320 (1992).
    \56\ See Bamberger and Belogolovsky supra note 44; Adrienne 
Colella, Ramona L. Paetzold, Asghar Zardkoohi and Michael J. Wesson, 
``Exposing Pay Secrecy,'' 32 Acad. of Management Rev. 55, 58 (2007).
---------------------------------------------------------------------------

    OFCCP received three comments on the proposed revisions to Sec.  
60-1.4. One commenter suggested that OFCCP eliminate the proposed equal 
opportunity clause provisions and focus instead on establishing 
``thorough but undemanding reporting requirements'' to detect 
compensation discrimination. With respect to that comment, OFCCP 
proposed an NPRM on August 8, 2014, entitled ``Government Contractors, 
Requirement To Report Summary Data on Employee Compensation.'' \57\ 
OFCCP will address any changes to compensation reporting requirements 
through this separate rulemaking. Further, eliminating the proposed 
equal opportunity clause provisions would be contrary to the express 
requirements of Executive Order 13665. OFCCP, therefore, adopts the 
revised equal opportunity clause provisions into the final rule.
---------------------------------------------------------------------------

    \57\ Government Contractors, Requirement To Report Summary Data 
on Employee Compensation, 79 FR 46562 (Aug. 8, 2014). This notice of 
proposed rulemaking (NPRM) would amend the regulation by adding a 
requirement that certain Federal contractors and subcontractors 
supplement their Employer Information Report (EEO-1 Report) with 
summary information on compensation paid to employees, as contained 
in the Form W-2 Wage and Tax Statement (W-2) forms, by sex, race, 
ethnicity, and specified job categories, as well as other relevant 
data points such as hours worked, and the number of employees.
---------------------------------------------------------------------------

    Another commenter suggested that the final rule modify the equal 
opportunity clause by adding language from Sections 7 and 8 of the 
National Labor Relations Act (NLRA).\58\ Although the language may not 
be identical to the NLRA, the revised equal opportunity clause language 
includes language detailing employees' right to engage in wage 
discussions and employers' nondiscrimination obligations related to 
this right. Consequently, OFCCP believes that inclusion of the 
suggested NLRA language is unnecessary. Furthermore, the language 
inserted into the equal opportunity clause mirrors language contained 
in the Order giving OFCCP the authority and responsibility to ensure 
Federal contractors do not discriminate against any employee or job 
applicant because such employee or applicant has inquired about, 
discussed, or disclosed the compensation of the employee or applicant 
or another employee or applicant.
---------------------------------------------------------------------------

    \58\ Section 7 of the NLRA examines the right of employees to 
``self-organization, to form, join, or assist labor organizations, 
to bargain collectively through representatives of their own 
choosing, and to engage in other concerted activities'' for the 
purpose of collective bargaining or other ``mutual aid or 
protection.'' Section 8 of the NLRA describes unfair employer and 
labor organization practices that interfere with the rights granted 
employees in section 7. See 29 U.S.C. 157-158 (1935). OFCCP 
recognizes that the National Labor Relations Board (NLRB) interprets 
Section 7 to protect employees and applicants from discrimination 
based on discussion or disclosure of their own compensation or the 
compensation of other employees or applicants. Paraxel International 
LLC, 356 NLRB No. 82, slip op. at 3 (2011).
---------------------------------------------------------------------------

    The other comment regarding revisions to Sec.  60-1.4 asserted that 
it is not necessary for OFCCP to alter the heading for Sec.  60-1.4(d) 
from ``Incorporation of the equal opportunity clause by reference'' to 
``Inclusion of the equal opportunity clause by reference;'' or to alter 
the first sentence of Sec.  60-1.4(d) by deleting ``incorporated by 
reference'' and inserting ``included by reference.'' OFCCP does not 
agree that this change is unnecessary and will change the current 
regulatory language of the heading and first sentence of Sec.  60-
1.4(d). Making the change to ``inclusion'' is consistent with the

[[Page 54944]]

language used in other recent OFCCP rulemakings, including regulations 
for section 503 of the Rehabilitation Act of 1973, as amended. As 
proposed in the NPRM, the final rule removes the outdated reference to 
the ``Deputy Assistant Secretary'' in Sec.  60-1.4(d), and replaces it 
with the ``Director of OFCCP.''
    SUBPART B--General Enforcement; Compliance Review and Complaint 
Procedure

Section 60-1.35 Contractor Obligations and Defenses to Violation of the 
Nondiscrimination Requirement for Compensation Disclosures

    As proposed in the NPRM, Sec.  60-1.35 becomes a new section to 
part 60-1 in this final rule, to implement the requirements of section 
2(b), as well as the contractor defenses set forth in the Executive 
Order.

Analytical Framework

    In the NPRM, OFCCP stated that it viewed Executive Order 13665 ``as 
establishing a new prohibition against discrimination against any 
employee or applicant'' and announced its intent to use the burdens and 
standards of proof applicable to Title VII discrimination claims--
including the use of a motivating factor framework for analyzing 
causation. OFCCP provided three broad reasons for adopting this 
approach in the NPRM: (1) the equal opportunity clause paragraph set 
out in section 2(b) of Executive Order 13665 is framed in terms of 
discrimination; (2) the prohibitions set forth in Executive Order 13665 
diverged from the traditional Title VII retaliation framework, to which 
the different ``but-for'' standard of review applies; and (3) the 
application of the motivating factor framework would maintain 
consistency with the review of similar claims under the National Labor 
Relations Act (NLRA), which also utilizes the motivating factor 
approach.
    OFCCP received seven comments on the proposed analytical framework. 
Five of these comments, largely from organizations representing 
employers, opposed the proposal, and urged instead that OFCCP adopt a 
``but-for'' causation standard, citing the recent Univ. of Texas 
Southwestern Med. Ctr. v. Nassar Supreme Court case.\59\ Two 
commenters, both civil rights advocacy organizations, strongly 
supported the proposed motivating factor framework and urged its 
inclusion in the Final Rule. As discussed below, OFCCP adopts the 
framework as proposed in the NPRM with some further clarification. A 
discussion of the various issues raised in the comments follows.
---------------------------------------------------------------------------

    \59\ 133 S.Ct. 978 (2013).
---------------------------------------------------------------------------

    The most frequent comments on the proposed analytical framework 
concerned the applicability of the Nassar decision to Executive Order 
13665. In Nassar, the Court analyzed the retaliation statute under 
Title VII, codified at 42 U.S.C. 2000e-3, which prohibits adverse 
employment action against an employee for opposing a practice made 
unlawful by Title VII, or for filing a charge, testifying, or otherwise 
participating in an investigation, proceeding, or hearing under Title 
VII.\60\ The Court held that but-for causation, rather than a 
motivating factor review, applied to retaliation claims under Title 
VII.\61\
---------------------------------------------------------------------------

    \60\ Id.
    \61\ Id.
---------------------------------------------------------------------------

    The comments from the organizations representing employers all 
stated that the holding in Nassar dictated the analytical framework 
that must be utilized under Executive Order 13665, as the protections 
under the Order are akin to Title VII retaliation claims as opposed to 
Title VII discrimination claims for which the motivating factor 
analysis is reserved. Some of these commenters also pointed to the text 
of the Order--such as the lack of specific ``motivating factor'' 
language--to buttress their conclusions. Comments from civil rights 
advocacy groups disagreed. These commenters stated that pay secrecy 
policies are inextricably intertwined with compensation discrimination. 
They further asserted that because the adverse action in the pay 
secrecy context often occurs before an employee engages in activity 
that would be protected under Title VII, the protections in the Order 
are fundamentally different in kind from anti-retaliation protections 
under Title VII.
    Historically, OFCCP has followed Title VII principles in cases 
brought under Executive Order 11246.\62\ While that approach continues, 
we agree with the commenters echoing our position in the NPRM that the 
protection afforded by Executive Order 13665 ``diverges from the 
traditional Title VII retaliation framework'' at issue in Nassar. Title 
VII retaliation claims require, as an initial matter, that the 
plaintiff oppose an unlawful employment practice, file a charge of 
discrimination, or participate in an ``investigation, proceeding, or 
hearing'' related to Title VII claims. 42 U.S.C. 2000e-3. Executive 
Order 13665 is different, as it protects any compensation inquiries, 
discussions, or disclosures and requires neither opposition to an 
alleged violation of the underlying law nor participation in an 
investigation, proceeding, hearing, or litigation asserting rights 
protected by the underlying law.\63\ A benign question from co-worker 
to co-worker about the annual bonus she received or an employee's 
inadvertent disclosure of a difference in pay between herself and a 
colleague are conceivable predicates for a claim under the Order.
---------------------------------------------------------------------------

    \62\ See OFCCP v. Greenwood Mills, Inc., No. 00-044, 2002 WL 
31932547, at *4 (Admin. Rev. Bd. Dec. 20, 2002).
    \63\ E.O. 13665, sec. 2(b).
---------------------------------------------------------------------------

    This difference in scope underpinned OFCCP's position in the NPRM 
that the Order is ``framed in terms of discrimination'' and that its 
protections are uniquely directed toward ``protecting workers from pay 
discrimination itself,'' thus supporting a discrimination analysis. 
While two of the commenters took issue with this latter statement, 
asserting that Title VII's retaliation statute serves the same purpose, 
we believe there is an important difference--the Order's protections 
are geared not only to safeguard the integrity of existing pay 
discrimination laws, but to also allow workers to discover 
discrimination that would otherwise be hidden. This purpose is 
explicitly referenced multiple times in the text of Executive Order 
13665.\64\ This also dovetails with OFCCP's existing regulations, as 
the Order's protection of open communication regarding compensation is 
interrelated with contractors' existing and ongoing affirmative action 
obligations to evaluate and report on their compensation systems for 
the existence of potentially discriminatory disparities. See 41 CFR 60-
2.17(b)(3).
---------------------------------------------------------------------------

    \64\ Id. at sec. 1 (``When employees are prohibited from 
inquiring about, disclosing, or discussing their compensation with 
fellow workers, compensation discrimination is much more difficult 
to discover and remediate, and more likely to persist. . . . 
Ensuring that employees of Federal contractors may discuss their 
compensation without fear of adverse action will enhance the ability 
of Federal contractors and their employees to detect and remediate 
unlawful discriminatory practices. . . .'').
---------------------------------------------------------------------------

    While OFCCP recognizes the lack of specific ``motivating factor'' 
language in the Order and the other textual arguments raised by 
commenters,\65\ the policy language embedded in the Order, the 
differences between the Order's protections and current case law

[[Page 54945]]

interpretations of the Title VII retaliation provision, and related 
affirmative action and nondiscrimination obligations under the existing 
regulations provide important text and context for determining the 
appropriate analytical framework to employ. Accordingly, OFCCP does not 
believe that Nassar dictates that a ``but-for'' analytical framework 
must be used to analyze pay secrecy claims under Executive Order 13665.
---------------------------------------------------------------------------

    \65\ While the title of the Order uses the term ``non-
retaliation,'' this is not dispositive and must be read in the 
context of the rest of the Order. See Lawson v. FMR, LLC, 134 S. Ct. 
1158, 1169 (2014) (``[H]eadings and titles can do no more than 
indicate the provisions in a most general manner,'' and they are 
``not meant to take the place of the detailed provisions of the 
text.'') (citing Trainmen v. Baltimore & Ohio R. Co., 331 U.S. 519, 
67 S. Ct. 1387, 91 L. Ed. 1646 (1947)).
---------------------------------------------------------------------------

    The NPRM also included the motivating factor framework in part 
because of the overlap in legal protections offered by the Order and 
the National Labor Relations Act, which also uses a motivating factor 
analysis. Two commenters took issue with this rationale. One stated 
simply that the NLRA was ``not applicable'' to claims under the Order, 
while another asserted that there are differences in the scope and 
remedial schemes of the NLRA and the Order that necessitated differing 
analytical frameworks.
    Regarding the first of these commenters, OFCCP respectfully 
disagrees that the NLRA is simply ``not applicable'' to the discussion 
of how claims under Executive Order 13665 should be analyzed. As we 
stated in the NPRM, there is a close relationship in the type of 
activity each law protects. Section 7 of the NLRA guarantees the right 
to engage in ``concerted activities for the purpose of . . . mutual aid 
or protection,'' 29 U.S.C. 157, and the National Labor Relations Board 
has long held that this includes the right ``to ascertain what wages 
are paid by their employer, as wages are . . . probably the most 
critical element in employment.'' \66\ This makes the NLRA the federal 
law that most closely mirrors the types of pay secrecy policies that 
the Order addresses. Given that millions of workers, employed by 
thousands of employers, will be affected by pay secrecy policies under 
both the NLRA and the Order, reference to the NLRA in an attempt to 
provide, to the extent possible, a uniform framework of analysis and 
reduce confusion over the appropriate legal standard is appropriate.
---------------------------------------------------------------------------

    \66\ Parexel International LLC, 356 NLRB No. 82, slip op. at 3 
(2011).
---------------------------------------------------------------------------

    The second commenter raised two broad issues. First, it stated that 
the analytical framework under the NLRA was different from that 
proposed under the Executive Order 13665, in that under the NLRA an 
employer can escape all liability if it can establish that it would 
have taken the adverse action against the employee in any event. As 
stated in the NPRM, the reasoning behind the proposed motivating factor 
framework was ``consistency with Title VII and NLRA principles.'' 79 FR 
55720 (emphasis added). The initial motivating factor analysis under 
both laws is essentially the same: the complainant must demonstrate 
that discrimination was a motivating factor in the employer's action, 
and then the employer has a defense provided that it demonstrates that 
it would have taken the same action even in the absence of protected 
conduct. Were OFCCP to abandon a motivating factor framework, the 
analyses under the Order and the NLRA would then be out of alignment 
despite the existence of substantially identical claims under each.
    The NLRA and Title VII then diverge in the remedial structure 
following a successful articulation of the defense: under the NLRA, the 
employer can escape all liability, whereas under Title VII, the court 
may still grant injunctive and declaratory relief, as well as 
attorneys' fees. While the final rule follows Title VII rather than 
NLRA principles in this regard, the enforcement mechanisms in the Order 
significantly lessen the distinction with the NLRA in two ways. First, 
the Order does not permit OFCCP to recover attorneys' fees and costs, 
thus, as with the NLRA, monetary remedies are not available if an 
employer establishes a defense in a case proceeding under the 
motivating factor framework. Second, the inclusion of a specific, 
complete ``essential job functions'' defense in the Order, discussed 
elsewhere in the preamble, provides a mechanism for contractors to 
avoid liability in certain circumstances consistent with the NLRA.
    The commenter also noted that the interpretation of the Order in 
the NPRM covers more people and more types of activity than does the 
NLRA and that this will lead to an ``exponential increase'' in claims, 
and that applying a motivating factor analysis will further result in 
an increase in the number of frivolous claims, thus raising costs for 
the contractor community. As to any potential increase in claims, it is 
true that one specific purpose of the Order is to expand protections 
against pay secrecy policies to individuals and types of activities 
beyond that protected by the NLRA; otherwise, there would be no need 
for the Order. As discussed at length in the NPRM and in the preamble 
here, pay discrimination, as well as the existence of pay secrecy 
policies, remains widespread despite the protections in the NLRA. To 
the extent there is an increase in meritorious claims, this would 
indicate the Order's success at addressing these widespread problems. 
As to the assertion that there would be an untenable increase in the 
number of frivolous claims solely because of the availability of a 
motivating factor framework, we respectfully disagree. Significantly, 
there is no private right of action under Executive Orders 11246 or 
13665; OFCCP is responsible for investigating complaints filed and 
bringing enforcement actions, which it has discretion to do only if 
there is a violation and it has attempted to resolve such violations 
through informal means. See 41 CFR 60-1.24. Simply put, OFCCP will not 
pursue frivolous claims, which substantially addresses the concerns 
raised by the commenter.
    For the foregoing reasons, OFCCP concludes that the motivating 
factor framework is a permissible approach for claims brought under the 
Executive Order 13665. However, the fact that it is a permissible 
approach should not be interpreted to say that it is the only approach 
OFCCP may use to prove discrimination. For instance, numerous circuit 
courts examining Title VII discrimination claims since the Civil Rights 
Act of 1991, which codified the motivating factor framework, have held 
that, despite the availability of the motivating factor analysis, 
plaintiffs may also proceed under the more traditional burden shifting 
framework first set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 
792 (1973).\67\ Under this approach, often referred to as the 
``determinative factor'' approach, the plaintiff must first make a 
prima facie showing of discrimination, which includes evidence that he 
or she is a member of a protected class and was subjected to an adverse 
action. The employer then has the opportunity to articulate a 
legitimate nondiscriminatory reason for the adverse employment action 
it has taken, which the plaintiff must then demonstrate was a pretext 
for discrimination in order to succeed. Which approach OFCCP uses will 
be heavily influenced by the facts of the case as they are developed in 
its investigation and in discovery. In true ``mixed motive'' cases--
where, for instance, the employer can show that it fired an employee in 
part for taking excessive breaks, but where there is also evidence that 
the employer fired the employee in part for discussing compensation--
the motivating factor approach would be appropriate. Conversely, where 
the evidence appears

[[Page 54946]]

clear that there was only a single motive--where, for instance, the 
employer claims that it fired an employee for taking excessive breaks 
but the evidence shows that this is demonstrably false or otherwise 
unworthy of credence--OFCCP may opt to proceed under the more 
traditional pretext approach. OFCCP may also opt to prove its case via 
both frameworks, arguing, for instance, that discrimination was the 
determinative factor in an employer's adverse action but, in the 
alternative, that it was at least a motivating factor. The Supreme 
Court and multiple circuit courts have recognized this approach as 
consistent with the way in which many Title VII cases are 
litigated.\68\ In sum, while the motivating factor analytical framework 
is permissible under this Final Rule, OFCCP may use other approaches, 
based on the evidence available in a particular case, to demonstrate 
that unlawful discrimination occurred.
---------------------------------------------------------------------------

    \67\ See, e.g., Makky v. Chertoff, 541 F.3d 205, 213-15 (3d Cir. 
2008); Fogg v. Gonzales, 492 F.3d 447, 451 (D.C. Cir. 2007); 
McGinest v. GTE Serv. Corp., 360 F.3d 1103, 1122 (9th Cir. 2004).
    \68\ Price Waterhouse v. Hopkins, 490 U.S. 228, 247 n.12 (1989) 
(plurality op.) (``Nothing in this opinion should be taken to 
suggest that a case must be correctly labeled as either a 
``pretext'' case or a ``mixed-motives'' case from the beginning . . 
. indeed, we expect that plaintiffs often will allege, in the 
alternative, that their cases are both. Discovery often will be 
necessary before the plaintiff can know whether both legitimate and 
illegitimate considerations played a part in the decision against 
her.''); see also Ponce v. Billington, 679 F.3d 840, 845 (D.C. Cir. 
2012) (citing Price Waterhouse, and noting that ``a plaintiff may 
ultimately decide to proceed under both theories of liability.''); 
Rapold v. Baxter Int'l, 718 F.3d 602, 611-12 (7th Cir. 2013) (citing 
Price Waterhouse).
---------------------------------------------------------------------------

Consistency and Compatibility With NLRA

    A number of comments concerned the compatibility or consistency of 
the Order with the NLRA beyond those comments addressed in the 
analytical framework section above. Some commenters noted that the NLRA 
already provides some protection for disclosure of compensation 
information and, therefore, believe this rule is unnecessary. As an 
initial matter, the Order plainly requires OFCCP to draft implementing 
regulations. See E.O. 13665, sec. 3. Further, as discussed at length in 
the NPRM and above in this final rule, pay secrecy policies continue to 
be prevalent despite the existence of the NLRA, preventing workers from 
discovering and remedying potential discrimination. Finally, also 
discussed above, the scope of the Order is broader, covering a broader 
range of workers, including supervisors, and a broader scope of 
protected activity than that covered under the NLRA.
    One commenter took issue with this last point, stating that the 
Department has not presented sufficient data to justify coverage of 
supervisors. Another commenter noted, conversely, that coverage of 
supervisors is important specifically because they are not covered by 
the NLRA.
    We decline the recommendation to limit coverage of the Order solely 
to employees who are not supervisors. Neither the Order nor any of the 
comments provide a basis for doing so. The plain text of the Order 
extends protections to ``any employee or applicant for employment,'' 
providing no language in any way limiting the scope of workers who 
should be covered by the rule.\69\ Significantly, as discussed in the 
proposed rule, one of the catalysts for the signing of the Order is the 
case of Ledbetter v. Goodyear Tire & Rubber Co.\70\ That case concerned 
a supervisor who discovered that her wages were less than that of male 
supervisors and who was warned by company management not to disclose or 
otherwise discuss this information. Ms. Ledbetter's experience, by no 
means unique, exemplifies the fact that pay secrecy policies and pay 
discrimination negatively affect workers on all rungs of the company 
ladder, and demonstrates the necessity for the broad protections in 
this rule. We also note that the NLRA concerns the rights of employees 
to organize and bargain and, therefore, excludes supervisors from its 
protections for reasons unrelated to this rule. This rule concerns a 
different policy purpose, that is, the promotion of pay transparency to 
ensure equitable pay for all of a contractor's employees. Therefore, it 
is appropriate that this rule covers a wider class of employees.
---------------------------------------------------------------------------

    \69\ E.O. 13665, sec. 2.
    \70\ 550 U.S. 618 (2007).
---------------------------------------------------------------------------

    One commenter raised an issue about having the opportunity to 
comment on coordination it believes is necessary between the Department 
and the NLRB in terms of having a consistent standard and a consistent 
class of covered employees for pay transparency cases. Because 
sufficient notice about the standard to be applied as well as the 
covered class was provided during this comment period, there was 
sufficient opportunity for input on these issues. The Department 
enforces statutes with overlapping jurisdiction with other agencies and 
coordinates when necessary. There is no justification for not covering 
all employees who are covered generally by the protections provided 
under Executive Order 11246.

Contractor Defenses

    As was proposed in the NPRM, and as was established in Executive 
Order 13665, the final rule contains contractor defenses to alleged 
violations. First, the contractor may pursue a defense if its adverse 
action against an employee or applicant is not based on a rule, policy, 
practice, agreement or other instrument that prohibits employees and 
applicants from disclosing compensation. Second, the protections of the 
Order do not apply, and thus a contractor is allowed to take adverse 
action against an employee or applicant, if the employee discloses 
compensation information accessed or received based on performing an 
essential job function unless the disclosure falls into one or more 
exemptions.
    The structure and function of these defenses are notably different 
from each other in the text of Executive Order 13665 and, accordingly, 
are so under these regulations. The ``essential job functions'' defense 
is set forth in the same paragraph as the prohibition on 
discrimination, and states that the prohibition ``shall not apply'' in 
instances in which employees disclose compensation data that they have 
access to as part of their essential job functions.\71\ This 
prohibition, and the defense, are incorporated into the text of 
Executive Order 11246, as amended.\72\ The second type of defense is 
phrased quite differently. It is not listed alongside the complete 
``essential job functions'' defense in the text of the Order, nor is it 
incorporated into the amended Executive Order 11246; rather, it is 
listed separately in a ``General Provisions'' section.\73\ Further, it 
is described as a defense that the Order does not prohibit a contractor 
from pursuing, rather than one that completely excises the application 
of the Executive Order.\74\ We believe these differences are 
intentional and important, and frame how the defenses are to be 
employed in actions brought under the Order. A discussion of the 
function of these defenses, and a response to the comments we received, 
follows.
---------------------------------------------------------------------------

    \71\ E.O. 13665, sec. 2.
    \72\ E.O. 11246, sec. 202(3).
    \73\ E.O. 13665, sec. 5(a).
    \74\ Id.
---------------------------------------------------------------------------

Section 60-1.35(a) General Defenses

    The NPRM proposed to include a general contractor defense to an 
alleged violation of paragraph (3) of the equal opportunity clauses 
listed in Sec.  60-1.4(a) and (b) under which a contractor's actions 
would not be deemed to be discrimination if the contractor could show 
that it disciplined the employee for violation of a consistently and 
uniformly applied rule, policy, practice, agreement, or other 
instrument that does not prohibit, or tend to prohibit,

[[Page 54947]]

employees or applicants from discussing or disclosing their 
compensation or the compensation of other employees or applicants. 
OFCCP invited comments on how to harmonize contractors' enforcement of 
legitimate workplace rules with the rights of applicants and employees 
to discuss, disclose, or inquire about compensation.
    OFCCP received several comments on this proposed defense. Some 
commenters were concerned that the defense was so broad that it could 
be used as pretext for discrimination and that it allowed for excessive 
employer subjectivity. These commenters explained that the example 
cited in the NPRM, where a contractor disciplines an employee for 
standing on her desk and repeatedly shouting out her pay in violation 
of a workplace rule prohibiting disruptive behavior, illustrated that 
contractors could apply such workplace rules in a subjective and 
discriminatory manner because contractors could define ``disruptive'' 
to include all conversations about compensation. These commenters 
suggested that OFCCP should provide specific definitions and examples 
of legitimate workplace rules. One commenter also suggested that OFCCP 
should identify sources that employers could draw from when citing a 
legitimate workplace rule, such as employee handbooks or collective 
bargaining agreements.
    One other commenter suggested that OFCCP delete ``and uniformly'' 
from the phrase ``by proving that the contractor disciplined the 
employee for violation of a consistently and uniformly applied rule . . 
.'' because ``uniformly'' was superfluous and because contractors 
should not be required to apply a rule ``uniformly'' in situations when 
circumstances warrant a different approach.
    OFCCP believes that the defense, as proposed in the NPRM, 
adequately prevents contractors from using a legitimate workplace rule 
as a way to avoid liability in the event that it discriminated against 
an employee or applicant for discussing compensation. The defense 
requires the contractor to show that it applied a legitimate workplace 
rule to the employee or applicant in a consistent and uniform manner. 
If the contractor cannot demonstrate a track record of consistent and 
uniform application of the workplace rule, then the contractor will not 
be able to successfully use this defense. Although a contractor need 
not discipline all employees in an identical way under the workplace 
rule, it must show that it did not discipline the employee or applicant 
in question more severely under the rule because of the employee's or 
applicant's protected activity.
    In response to the concern that contractors could use workplace 
rules, such as those that prohibit disruptive employee behavior, to 
target discussions of compensation, OFCCP notes that contractors may 
only rely on workplace rules that do not prohibit, or tend to prohibit, 
employees or applicants from discussing or disclosing their 
compensation or the compensation of other employees or applicants. A 
rule that treated all discussions of pay as ``disruptive'' would 
violate these regulations.
    OFCCP declines to articulate specific workplace rules that 
contractors may assert pursuant to this defense. There are many 
legitimate workplace rules that contractors may be entitled to enforce; 
OFCCP cannot predict the content or the source of any particular rule 
that a contractor may rely upon in asserting this defense. Regardless 
of the type of workplace rule relied upon, however, every contractor 
must show that the identified workplace rule does not prohibit, or tend 
to prohibit, employees or applicants from discussing their compensation 
and that any such rule has been consistently and uniformly applied. For 
example, if a contractor disciplined an employee or applicant, who was 
also discussing pay, pursuant to an allegedly legitimate workplace 
rule, but, for example, had never promulgated or enforced that rule 
before, the contractor may not be able to show that the workplace rule 
qualified as a legitimate workplace rule under this defense.
    Finally, OFCCP will retain the word ``uniformly'' in the final 
rule. OFCCP recognizes that different circumstances may warrant 
different forms of discipline under the same workplace rule; the fact 
that an employee or applicant was also discussing compensation, 
however, should not justify applying the workplace rule in a non-
uniform manner. For example, it may be a consistent application for a 
contractor to suspend all employees who exceed their allotted break 
time by an hour, even if the contractor only provides a verbal warning 
to employees who exceed their allotted break time one time by five 
minutes. For the contractor to act in a uniform manner, it should apply 
the same corrective action--here, a verbal warning--to employees who 
exceed their allotted break time once by five minutes, including any 
employees who may have been discussing compensation. As mentioned 
above, an employee's or applicant's protected activity should not 
affect the severity of the discipline they receive pursuant to a 
workplace rule. Requiring that contractors uniformly apply workplace 
rules to similarly situated employees, regardless of their protected 
activity, prevents contractors from using the rule as a way to avoid 
liability for discrimination. Therefore, OFCCP believes that the use of 
the word ``uniformly'' is not superfluous and will remain in the final 
rule.
    Two commenters proposed adding more specific defenses to the 
regulation. One commenter suggested that OFCCP add a defense for 
contractors who limit discussion or disclosure of compensation 
information pursuant to laws enacted to protect private and/or 
confidential information. Another commenter recommended that the rule 
include a specific defense against hacking, such that if an employee 
obtained salary information through unauthorized access, then the 
employer should be able to discipline the employee for doing so.
    As previously mentioned, the final rule does not expand the 
defenses to include these recommendations; however, it does not limit 
the ability of contractors to take disciplinary actions for violations 
of security policies and applicable privacy laws. Furthermore, as noted 
in the preamble to the proposed rule, the general defense provision is 
intended to permit employers to have personnel policies that are 
uniformly applied to maintain discipline in the workplace and to 
protect their business. We note generally that a policy that would have 
the effect of broadly prohibiting employee communication about 
compensation would be unlawful under this rule. However, a company 
policy that is narrowly tailored to prohibit disclosure of specific 
proprietary business information or trade secrets, or that is otherwise 
designed to be consistent with federal or state privacy laws, if 
violated, could fall within the general defenses already set forth in 
the rule. Similarly, if a contractor consistently and uniformly applies 
a rule prohibiting employees from accessing information without 
authorization, then this too could potentially fall within the general 
defense provision. Whether a company policy concerning confidentiality 
or unauthorized access would be deemed unlawful would be a highly fact-
specific inquiry. However, because the general defense set forth could 
potentially be invoked for these purposes, OFCCP declines to adopt the 
recommendations to include these specific defenses.
    Accordingly, OFCCP declines to make the suggested changes and 
adopts the defense requirements outlined in the

[[Page 54948]]

NPRM into the final rule. OFCCP is, however, rewording the defense to 
make clear that relying on a workplace rule will not serve as a 
complete defense, but rather is subject to the analytical framework as 
discussed above. Consistent with Title VII principles, and the language 
of Executive Order 13665, a contractor cannot escape all liability 
within the ``motivating factor'' framework if the agency can show that 
discrimination motivated the contractor, even in part, to discipline an 
employee or applicant. The focus of the Executive Order is on 
``[e]nsuring that employees of Federal contractors may discuss their 
compensation without fear of adverse action'' so that contractors and 
their employees can ``detect and remediate unlawful discriminatory 
practices.'' E.O. 13665, sec. 1. This policy will not be truly 
effectuated until all forms of discriminatory actions, even if they are 
combined with some lawful motivations, are rooted out of the workplace. 
To the extent that a desire to perpetuate unlawful pay secrecy policies 
motivated a contractor's actions, OFCCP will seek to enjoin such 
practices in the future. A contractor may, however, limit the scope of 
an adverse remedial order if it can show that it would have taken the 
same action against the employee or applicant in the absence of any 
discriminatory motive.\75\
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    \75\ As discussed supra, if the facts of the case dictate that 
proceeding under the McDonnell Douglas determinative factor model is 
appropriate in a given case, the contractor could use its workplace 
rule as its asserted legitimate nondiscriminatory reason, which 
OFCCP would then have the opportunity to demonstrate was a pretext 
for discrimination.
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Section 60-1.35(b) Essential Job Functions

    As proposed in the NPRM, Sec.  1.35(b) contains a second contractor 
defense to a claim of discrimination under these regulations. Pursuant 
to this defense, a contractor will not violate these regulations if it 
takes adverse action against an employee, who has access to the 
compensation information of other employees or applicants as part of 
his or her essential job functions, for disclosing the compensation of 
other employees or applicants, unless the disclosure occurs in certain 
limited circumstances. These limited circumstances include disclosures 
in response to a formal complaint or charge, in furtherance of an 
investigation, proceeding, hearing or action, including an 
investigation conducted by the contractors, or consistent with the 
contractor's legal duty to provide information. A formal complaint or 
charge would include, for example, written and oral complaints 
submitted by the employee, or someone on behalf of the employee, to the 
contractor's human resources or other appropriate office or official, 
and to a Federal, state or local government entity, including courts 
and administrative boards and councils. Under Sec.  1.35(b), the 
employee would typically be making the disclosure within, related to, 
or pursuant to some sort of official action, process, policy, or 
procedure if the conduct is to be protected from adverse action by the 
contractor.
    As discussed above, OFCCP has revised the definition of ``essential 
job functions'' to identify two specific categories of job functions: 
(1) the access to compensation information is necessary in order to 
perform that function or other routinely assigned business task; or (2) 
the function or duties of the position include protecting and 
maintaining the privacy of employee personnel records, including 
compensation information. Many of the comments that OFCCP received on 
this topic related to the definition of ``essential job functions'' and 
have been previously addressed. To reiterate, some commenters felt that 
the definition of essential job functions, and therefore the 
accompanying defense, should be broadened, while others felt it should 
be narrowed.
    As stated in the NPRM, this defense acknowledges that an employee 
who has access to compensation information of others within an 
organization as part of his or her essential job functions has a duty 
to protect such information from disclosure. The revised definition of 
``essential job functions'' reflects these concerns, while also 
limiting an employer's subjectivity in deciding what functions 
constitute essential job functions. As was stated in the NPRM, however, 
if an employee discloses or discusses the compensation of other 
applicants or employees based on information that the employee receives 
through means other than essential job functions access, the defense 
would not apply. Similarly, the defense would not apply where such an 
employee pursues her own possible compensation discrimination claim or 
raises possible disparities involving the compensation of other 
employees to a management official with the contractor or while using 
the contractor's internal complaint process. This balance protects 
employers' confidential information, but does not inhibit those workers 
with access to such information from pursuing their own claims of 
compensation discrimination or raising possible disparities to the 
contractor's own management to consider and address if necessary to 
comply with the law. Without this distinction, employees with essential 
job functions access, who primarily work in human resources departments 
and who are predominantly women,\76\ would receive less protection than 
other employees who learn of possible compensation disparities in a 
similar manner.
---------------------------------------------------------------------------

    \76\ As was mentioned in the NPRM, in 2013 at least 71.9 percent 
of human resources professionals in three occupational categories 
were women. For further discussion, please refer to the NPRM at 79 
FR 55721 (September 17, 2014).
---------------------------------------------------------------------------

    As with any defense, OFCCP will evaluate the availability of a 
defense under section 1.35(b) based on the specific facts and 
circumstances of each case. As discussed above, this defense may serve 
as a complete bar to liability under these regulations. The 
``motivating factor'' framework will not limit the application of the 
essential job functions defense because releasing compensation 
information obtained during the course of an employee's essential job 
functions is not protected by Executive Order 13665 or this final rule. 
The policy underlying Executive Order 13665 recognizes that contractors 
are entitled to prohibit some of their employees from releasing 
sensitive and confidential information relating to compensation; 
accordingly, such prohibitions will not give rise to impermissible 
``motivating factors'' under these regulations, and therefore will not 
implicate the remedial structure under the ``motivating factor'' 
framework.

Section 60-1.35(c) Dissemination of nondiscrimination provision

    The NPRM proposed to require that Federal contractors incorporate 
the nondiscrimination provision described in section 2(b) of Executive 
Order 13665 into existing employee manuals or handbooks, and 
disseminate the nondiscrimination provision to employees and job 
applicants. The NPRM proposed that the Director of OFCCP would 
prescribe the language in the nondiscrimination provision, and that 
OFCCP would make the language available on the OFCCP Web site. The NPRM 
stated that contractors would disseminate the provision either 
electronically or by posting a copy of the provision in conspicuous 
places available to employees and job applicants. The NPRM did not 
require or recommend in-person or face-to-face communication of the 
provision, however, the proposed rule stated that contractors might use 
this method if they typically communicate information

[[Page 54949]]

to all employees or applicants in this manner.
    OFCCP received six comments on this proposed requirement. One 
commenter encouraged OFCCP to create a new ``pay transparency'' poster 
and add a requirement for contractors to post it in the workplace. Two 
commenters recommended that OFCCP revise the current ``EEO is the Law'' 
poster to include language describing the prohibition against 
discrimination based on compensation inquiries, discussions, or 
disclosures, instead of requiring publication of the prescribed 
nondiscrimination provision in employee manuals and handbooks. Another 
commenter challenged the use of prescribed language by the OFCCP's 
Director. The commenter stated that contractors would be best suited to 
develop language that articulates both employee and employer rights and 
obligations.
    OFCCP believes that contractors can accomplish the goal of 
providing notice of the nondiscrimination provision to applicants and 
employees through existing structures, such as handbooks and manuals. 
Moreover, OFCCP is mindful of the additional burden that a new posting 
requirement would impose on contractors, as explained in the below 
Regulatory Procedures section of this preamble. OFCCP also considered 
the suggestion that individual contractors develop the language they 
would use to describe the nondiscrimination provision in their employee 
handbooks and manuals. However, OFCCP believes that uniformity of such 
language is necessary to ensure consistency and clarity in the 
information provided to applicants and employees. Of course, nothing in 
this rule limits contractors' ability to provide additional information 
to their employees about employer and employee rights and obligations. 
Further, OFCCP seeks to lessen the costs and burden associated with 
dissemination of the nondiscrimination provision by prescribing the 
language to describe it. Accordingly, OFCCP declines to make the 
suggested changes and adopts the dissemination requirements proposed in 
the NPRM into the final rule.
    OFCCP agrees with the suggested inclusion of language describing 
the prohibition against discrimination based on compensation inquiries, 
discussions, or disclosures on the ``EEO is the Law'' poster that 
contractors are currently required to post. OFCCP will take necessary 
steps toward producing a poster with this new language. However, 
posting the ``EEO is the Law'' poster will not eliminate the obligation 
to publish the prescribed nondiscrimination provisions in employee 
manuals and handbooks.
    In the proposed rule, OFCCP sought comments on the feasibility of a 
proposition that would require contractors with existing manager 
trainings or meetings to include in them a review of the prohibition on 
discrimination based on an employee or applicant inquiring about, 
discussing, or disclosing compensation information. The training 
requirement, as proposed, would have applied only to contractors that 
provide manager trainings or meetings; OFCCP would have encouraged 
other contractors to adopt such training as a best practice for 
minimizing the likelihood of workplace discrimination. OFCCP received 
five comments in support and three comments in opposition of this 
proposed requirement.
    Generally, commenters supporting the training proposal asserted 
that requiring manager training should be required for all contractors. 
Such a requirement would ensure effective implementation of the new 
provision, particularly for those contractors with longstanding polices 
that prohibit wage discussions. Some of these commenters asserted 
further that contractors with existing training could incorporate 
required new training into already existing training sessions, as 
proposed. One commenter suggested extending the training requirement to 
require contractors to provide employees with individual notice at 
staff meetings, performance reviews, and other channels.
    However, commenters in opposition to the training requirement 
generally asserted that the proposed training provision would not 
guarantee effectiveness, would create confusion, would involve 
significant expense, and would be unnecessary given that contractors 
are likely already subject to similar Federal and state provisions. One 
commenter specifically asserted that requiring training for some 
contractors while only encouraging it for other contractors would 
create confusion amongst the regulated community with regard to what is 
required for compliance. Another commenter stated that contractors 
would achieve increased compliance with the new nondiscrimination 
provision through clearer guidance from OFCCP as opposed to mandated 
contractor training. Yet another commenter opposed the requirement 
because the expense for contractors to update existing training 
programs would be significant. Such an update would require several 
levels of internal company review, in addition to costs to re-deploy 
training modules. Rather than impose a training requirement on some 
contractors, some of the comments in opposition suggested that OFCCP 
only encourage providing this training as a best practice for all 
contractors.
    After consideration of the foregoing comments, the final rule does 
not require any contractors to modify their existing trainings or 
meetings to include a review of the prohibition on discriminating based 
on an employee or applicant inquiring about, discussing, or disclosing 
compensation information. In making this determination, OFCCP 
considered the added burden to contractors resulting from them 
modifying their training materials, as well as the potential for 
contractors to become confused about which of them would be covered by 
the training requirement. Although this final rule does not require 
training, OFCCP encourages all contractors to incorporate personnel 
training on this new nondiscrimination provision as a best practice.

Alternatives or Additions to Proposed Regulations

    In the NPRM, OFCCP requested comments from small contractors on 
possible alternatives that would minimize the impact of the proposed 
rule while still accomplishing its goals. Specifically, OFCCP invited 
interested persons to submit comments on NPRM estimates, including the 
number of small entities affected by the Order's prohibition on Federal 
contractors discriminating against employees and job applicants, the 
compliance cost estimates, and whether alternatives exist that would 
reduce burden on small entities while still remaining consistent with 
the objectives of Executive Order 13665.
    OFCCP received two comments proposing alternative approaches. The 
commenters suggested that the final rule require Federal contractors to 
create and maintain publicly available employee pay scales, similar to 
the pay scales maintained for Federal employees. The commenters' 
proposal is beyond the scope of Executive Order 13665 and, even if 
within its scope, such an alternative would be more burdensome than 
what was proposed in the NPRM. OFCCP further finds that the proposed 
requirement to disseminate the nondiscrimination provision is the least 
burdensome means of fostering discussion among employees about pay and 
allowing for openness among employees to discuss compensation 
practices.

[[Page 54950]]

Regulatory Procedures

Executive Order 12866 (Regulatory Planning and Review) and Executive 
Order 13563 (Improving Regulation and Regulatory Review)

    OFCCP is issuing this final rule in conformity with Executive 
Orders 13563 and 12866, which directs agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). Executive Order 13563 
recognizes that some benefits are difficult to quantify and provides 
that, where appropriate and permitted by law, agencies may consider and 
discuss qualitatively values that are difficult or impossible to 
quantify, including equity, human dignity, fairness, and distributive 
impacts.
    Under Executive Order 12866, OFCCP must determine whether a 
regulatory action is significant and therefore subject to the 
requirements of the Executive Order and to review by OMB.\77\ Section 
3(f) of Executive Order 12866 defines a ``significant regulatory 
action'' as an action that is likely to result in a rule that: (1) has 
an annual effect of $100 million or more, or adversely affects in a 
material way a sector of the economy, productivity, competition, jobs, 
the environment, public health or safety, or State, local, or tribal 
governments or communities (also referred to as economically 
significant); (2) creates serious inconsistency or otherwise interferes 
with an action taken or planned by another agency; (3) materially 
alters the budgetary impacts of entitlement grants, user fees, or loan 
programs, or the rights and obligations of recipients thereof; or (4) 
raises novel legal or policy issues arising out of legal mandates, the 
Presidents priorities, or the principles set forth in Executive Order 
12866.\78\
---------------------------------------------------------------------------

    \77\ 58 FR 51735.
    \78\ Id.
---------------------------------------------------------------------------

    This rule has been designated a ``significant regulatory action'' 
although not economically significant under section 3(f) of Executive 
Order 12866. The rule is not economically significant because it will 
not have an annual effect on the economy of $100 million or more. 
Accordingly, the rule has been reviewed by the Office of Management and 
Budget.
The Need for the Regulation
    On April 8, 2014, President Barack Obama signed Executive Order 
13665, Non-Retaliation for Disclosure of Compensation Information. 79 
FR 20749 (April 11, 2014). This Executive Order prohibits Federal 
contractors from discharging or discriminating in any other way against 
employees or applicants who inquire about, discuss, or disclose their 
own compensation or the compensation of another employee or applicant. 
Executive Order 13665 necessitates the regulatory changes in this rule 
to ensure that employees of Federal contractors and subcontractors are 
able to discuss their compensation without fear of adverse action. 
Federal contractors also need the regulatory changes to enhance their 
ability to detect and remediate unlawful discriminatory practices. 
OFCCP designed the rule to contribute to a more efficient market in 
Federal contracting, and to ensure that the most qualified and 
productive workers receive fair wages. The existence of pay secrecy 
practices means some workers can be fired for even disclosing their 
compensation or asking their co-workers how much they earn. Even 
employers who do not specifically restrict employee communications 
about compensation take great care to guard individual compensation 
information. This final rule benefits OFCCP's enforcement by 
incorporating into the equal opportunity clauses the prohibition 
against pay secrecy policies, specifically that an employer cannot 
discriminate against an employee or applicant who has inquired about, 
discussed, or disclosed compensation information.\79\ By including the 
provision in the equal opportunity clauses OFCCP clearly defines such 
actions as discriminatory and enhances its ability to take action when 
it finds pay secrecy policies or practices during compliance 
evaluations and investigations.
---------------------------------------------------------------------------

    \79\ The final rule includes an exception for employees (e.g., 
payroll personnel) who have access to the compensation information 
of other employees or applicants as a part of such employee's 
essential job functions. In certain instances, employers may take 
adverse action against these employees for making compensation 
disclosures.
---------------------------------------------------------------------------

    Currently, OFCCP lacks sufficient, reliable data to assess the 
gender- or race-based pay gap experienced by employees of Federal 
contractors or subcontractors, including how much of the potential pay 
gap is attributable to pay discrimination instead of nondiscriminatory 
factors, and how many contractors are violating the pay discrimination 
laws OFCCP enforces. Pay secrecy ranks among one of the most prevalent 
employer policies and practices that makes discrimination more 
difficult to discover and remediate.\80\ OFCCP's work led to the 
determination that there is a substantial need for regulatory action.
---------------------------------------------------------------------------

    \80\ National Equal Pay Task Force, ``Fifty Years After the 
Equal Pay Act,'' (June 2013), available at http://www.whitehouse.gov/sites/default/files/equalpay/equal_pay_task_force_progress_report_june_2013_new.pdf (last 
accessed Mar.8, 2015).
---------------------------------------------------------------------------

    U.S. Census data show that more than 15.2 million family households 
in the United States are headed by women.\81\ Nearly 31 percent of 
these families, or nearly 4,700,000 family households, have incomes 
that fall below the poverty level.\82\ These and other data provide 
general information about the potential impact of eliminating pay 
differentials among men and women, including pay differentials not 
attributed to discrimination, on the poverty rate of women and their 
families.\83\ The data on earnings and the pay gap includes all

[[Page 54951]]

employers and all employees in the U.S., whereas this rule would apply 
to only a subset of such employers and employees. Therefore, the 
potential impact of this rule would be much smaller than the impact of 
eliminating pay differentials among all working men and women.
---------------------------------------------------------------------------

    \81\ U.S. Census Bureau, American Community Survey ``1-Year 
Estimates 2013, Table DP02: Selected Social Characteristics in the 
United States,'' available at http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk (last accessed 
Aug. 4, 2015). The calculation uses family households headed by 
females living in a household with family and no husband. A family 
household includes a householder, one or more people living in the 
same household who are related to the householder, and anyone else 
living in the same household.
    \82\ U.S. Census Bureau, American Community Survey, ``1-Year 
Estimates 2013, Geographies: United States, Table DP03: Selected 
Economic Characteristics,'' available at http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_13_1YR_DP03&prodType=table (last accessed 
Aug. 4, 2015). To determine whether a household falls below the 
poverty level, the U.S. Census Bureau considers the income of the 
householder, size of family, number of related children, and, for 1- 
and 2-person families, age of householder. The poverty threshold in 
2013 was $18,769 for a single householder and two children under 18.
    \83\ National Women's Law Center, ``Closing the Wage Gap is 
Crucial for Women of Color and Their Families,'' (Nov. 2013), 
available at http://www.nwlc.org/sites/default/files/pdfs/2013.11.13_closing_the_wage_gap_is_crucial_for_woc_and_their_families.pdf (last accessed Aug. 20, 2015). Unequal wages exacerbate poverty 
rates for many women of color and their families, even among lower-
wage earners. The wage gap also makes it difficult to women of color 
to move upward into the middle class; National Women's Law Center, 
``Insecure and Unequal: Poverty and Income Among Women and Families, 
2000-2012,'' (Sept. 26, 2013), available at http://www.nwlc.org/resource/insecure-unequal-poverty-among-women-and-families-2000-2012. Compares poverty rates for adults 18 and older for women and 
men, for white, non-Hispanics, Asians and Native Americans. Only 
Native American women have higher poverty rates than Hispanic and 
African-American women; Lauren Howard, ``Wage Disparity Still a 
Concern?,'' available at http://www.state.tn.us/sos/ecw/Wage%20Disparity%20Article.pdf citing the Institute for Women's 
Policy Research, ``Still a Man's Labor Market: The Long-Term 
Earnings Gap.'' Vulnerability resulting from the damaging effects of 
lifelong pay inequity is evident in the 20 percent poverty rate 
shared by senior citizen women who are widowed or divorced or have 
never married.
---------------------------------------------------------------------------

    Discrimination, occupational segregation, and other factors 
contribute to creating and maintaining a gap in earnings and keeping a 
significant percentage of women in poverty. It is worth noting, 
however, that some research has established that women earn less than 
men regardless of the field or occupation.\84\ According to some 
studies, differences in occupations result in occupational segregation 
which contributes to the wage gap \85\ and the effect is more 
pronounced in jobs requiring higher levels of education.\86\ The gender 
pay gap may also affect the economy as a whole as it exists for both 
women and men of color when compared to white, non-Hispanic men. At the 
beginning of 2015, median weekly earnings for African-American men 
working at full-time jobs totaled $680 per week, only 76 percent of the 
median for white men ($897).\87\ According to BLS data, the median 
weekly earnings for African-American women equaled $611 per week, only 
68 percent of the median for white men.
---------------------------------------------------------------------------

    \84\ Ariane Hegewisch et al., ``Separate and Not Equal? Gender 
Segregation in the Labor Market and the Gender Wage Gap,'' Briefing 
Paper IWPR #C377, Institute for Women's Policy Research (2010).
    \85\ Ariane Hegewisch and Heidi Hartmann, Ph.D., Occupational 
Segregation and the Gender Wage Gap: A Job Half Done, (Jan. 2014), 
sponsored by the U.S. Department of Labor Women's Bureau, available 
at http://www.iwpr.org/publications/pubs/occupational-segregation-and-the-gender-wage-gap-a-job-half-done (last accessed Aug. 20, 
2015); U.S. Department of Labor, Women's Bureau, ``The Economic 
Status of Women of Color: A Snapshot,'' available at http://www.dol.gov/wb/media/reports/WB_WomenColorFactSheet.pdf (last 
accessed Aug. 20, 2015. Ongoing occupational segregation is a 
persistent contributor to the wage gap for all women, but 
particularly so for Black and Hispanic women. See also National 
Women's Law Center, ``The 10 Largest Jobs Paying Under $10.10/Hour 
Are Majority Women'' (Apr. 2013), available at http://www.nwlc.org/sites/default/files/pdfs/womendominatedminwageoccupations.pdf (last 
accessed Aug. 4, 2015).
    \86\ Sarah Jane Glynn, Center for American Progress, 
``Explaining the Gender Wage Gap,'' (May 2014), available at https://www.americanprogress.org/issues/economy/report/2014/05/19/90039/explaining-the-gender-wage-gap/ (last accessed Aug. 3, 2015).
    \87\ Bureau of Labor Statistics, U.S. Department of Labor, 
``Current Population Survey, Median usual weekly earnings of full-
time wage and salary workers by selected characteristics, annual 
averages,'' available at http://www.bls.gov/news.release/wkyeng.t07.htm (last accessed Feb.12, 2015).
---------------------------------------------------------------------------

Discussion of Impacts
    In this section, OFCCP presents a summary of the costs associated 
with the requirements in the final rule at Sec. Sec.  60-1.3, 60-1.4 
and 60-1.35. The estimated labor cost to contractors is based on Bureau 
of Labor Statistics data in the publication ``Employer Costs for 
Employee Compensation'' issued in December 2013, which lists total 
compensation for management, professional, and related occupations as 
$51.58 per hour and for administrative support as $24.23 per hour. 
Unless specified otherwise, OFCCP estimates that 25 percent of the time 
burden for complying with this rule will be spent by persons in 
management, professional and related occupations and 75 percent will be 
spent by persons in administrative support occupations.
    There are approximately 500,000 contractor companies or firms 
registered in the General Service Administration's System for Award 
Management (SAM). Therefore, OFCCP estimates that 500,000 contractor 
companies or firms may be affected by the final rule.\88\ This may be 
an overestimate because SAM captures firms that do not meet OFCCP's 
jurisdictional dollar threshold. OFCCP's jurisdiction covers active 
contracts with a value in excess of $10,000.
---------------------------------------------------------------------------

    \88\ Legacy CCR Extracts Public (``FOIA'') Data Package, May 
2014, available at https://www.sam.gov/portal/public/SAM/ (last 
accessed February 12, 2015). There is at least one reason to believe 
the SAM data yield an underestimate of the number of entities 
affected by this rule and other reasons to believe the data yield an 
overestimate. SAM does not necessarily include all subcontractors, 
thus potentially leading to an underestimate, but this limitation of 
the data is offset somewhat because of the overlap among contractors 
and subcontractors; a firm may be a subcontractor on some activities 
but have a contract on others and thus be included in the SAM data. 
The SAM data may produce an overestimate of the entities affected by 
this rule because the data set includes: inactive contractors, 
contracts below this proposed rule's $10,000 threshold, and 
recipients of Federal grants and Federal financial assistance.
---------------------------------------------------------------------------

Cost of Regulatory Familiarization
    OFCCP acknowledges that 5 CFR 1320.3(b)(1)(i) requires agencies to 
include in the burden analysis for new information collection 
requirements the estimated time it takes for contractors to review and 
understand the instructions for compliance. In order to minimize the 
burden, OFCCP will publish compliance assistance materials including, 
but not limited to, fact sheets and ``Frequently Asked Questions.'' 
OFCCP will also host webinars for the contractor community that will 
describe the new requirements and conduct listening sessions to 
identify any specific challenges contractors believe they face, or may 
face, when complying with the requirements.
    OFCCP believes that Federal contractors' human resources or 
personnel managers will be responsible for understanding or becoming 
familiar with the new requirements. OFCCP estimates that it will take 
one hour for a management professional at each contractor company to 
either read the compliance assistance materials provided by OFCCP or 
participate in an OFCCP webinar to learn more about the new 
requirements. One commenter asserted that one hour was an 
underestimation of the time needed for familiarization. The commenter 
asserted that multiple individuals at each contractor company would be 
required to become familiar with the requirements. OFCCP acknowledges 
that the precise amount of time each company will take to engage in 
certain activities will be difficult to estimate. However, the estimate 
used does take into account the fact that many contractors are smaller 
and may not have the same staff or human resources capabilities. 
Therefore, OFCCP retains its original estimate that it will take 60 
minutes for regulatory familiarization. The estimated cost of this 
burden is assumed to be entirely at the Management, Professional, and 
Related Occupations level. Consequently, the estimated time burden for 
rule familiarization is 500,000 hours (500,000 contractor companies x 1 
hour = 500,000 hours). The estimated cost is $25,790,000 (500,000 hours 
x $51.58/hour = $25,790,000).
Cost of New Provisions
    The final rule prohibits discrimination based on employees and 
applicants inquiring about, discussing, or disclosing their 
compensation or the compensation of others unless the employee has 
access to compensation information of other employees or applicants as 
a part of such employee's essential job functions. The prohibition 
against discrimination would apply to all Federal contractors and 
subcontractors and federally assisted construction contractors and 
subcontractors with contracts or subcontracts in excess of $10,000. The 
new requirements are located at Sec. Sec.  60-1.3, 60-1.4 and 60-1.35.
    The final rule amends Sec.  60-1.3 to include definitions for 
compensation, compensation information, and essential job functions as 
it relates to employees who have access to compensation information. 
Some commenters indicated that OFCCP should be required to assess 
additional burden because of the compensation

[[Page 54952]]

definition. The commenter asserted that the definition would require 
contractors to change their analysis of employment processes. Another 
commenter suggested that OFCCP assess the burden for additional data 
requests that are made during compliance evaluations. OFCCP declines to 
adopt either of these two positions. The final rule does not change the 
requirement to conduct an in-depth analysis of employment practices. 
Contractors are required by existing regulations to analyze their 
personnel activity data annually, including compensation, to determine 
whether and where impediments to equal employment opportunity exist. 
The final rule establishes a definition of compensation, but does not 
change the existing regulatory requirement at 41 CFR 60-2.17(b)(3). 
OFCCP's guidance and regulations have historically included salary, 
wages, overtime pay, shift differentials, bonuses, commissions, 
vacation and holiday pay, allowances, insurance and other benefits, 
stock options, profit sharing and retirement.\89\ Thus, OFCCP found no 
need to change the assessed burden for this requirement. The provision 
of a definition for compensation does not increase the costs of 
compliance with this rule. In response to the comment related to 
requests made during compliance evaluations, the addition of a 
definition of compensation does not change the manner by which OFCCP 
conducts its compliance evaluations, nor does it require the compliance 
officers to collect more data. The Federal Contract Compliance Manual 
and OFCCP's Directive 2013-03 instruct compliance officers to analyze 
all aspects of pay. Thus, the requests for additional data are not a 
new cost or burden to contractors.
---------------------------------------------------------------------------

    \89\ Federal Contract Compliance Manual Chapter 2, Section 2L03 
and Chapter 3, section 3H03 (Oct. 2014).
---------------------------------------------------------------------------

    In Sec.  60-1.4(a)(3), the final rule mandates that each 
contracting agency incorporate the prohibition into the equal 
opportunity clause of Federal contracts and contract modifications, if 
the provision was not included in the original contract. More 
specifically, existing Sec.  60-1.4(a)(3) provisions on notices sent to 
each labor union or representative of workers would be placed in Sec.  
60-1.4(a)(4); existing Sec.  60-1.4(a)(4) would be placed in Sec.  60-
1.4(a)(5); existing Sec.  60-1.4(a)(5) would be placed in Sec.  60-
1.4(a)(6); existing Sec.  60-1.4(a)(6) would be placed in Sec.  60-
1.4(a)(7); and existing Sec.  60-1.4(a)(7) would be placed in new Sec.  
60-1.4(a)(8). The equal opportunity clause may be incorporated by 
reference into Federal contracts and subcontracts.
    In Sec.  60-1.4(b)(3), the final rule mandates that each 
administering agency incorporate the prohibition into the equal 
opportunity clause of a grant, contract, loan, insurance, or guarantee 
involving federally assisted construction that is not exempted from the 
equal opportunity clause. More specifically, existing Sec.  60-
1.4(b)(3) provisions on notices sent to each labor union or 
representative of workers would be placed in Sec.  60-1.4(b)(4); 
existing Sec.  60-1.4(b)(4) would be placed in Sec.  60-1.4(b)(5); 
existing Sec.  60-1.4(b)(5) would be placed in Sec.  60-1.4(b)(6); 
existing Sec.  60-1.4(b)(6) would be placed in Sec.  60-1.4(b)(7); and 
existing Sec.  60-1.4(b)(7) would be placed in new Sec.  60-1.4(b)(8). 
The equal opportunity clause may be incorporated by reference into 
federally assisted contracts and subcontracts.
    To comply with this requirement, contractors may incorporate the 
equal opportunity clause into their nonexempt subcontracts either in 
its entirety or by including it by reference. While some contractors 
may need to locate the revised equal opportunity clause and incorporate 
it into existing contract templates, other contractors that include the 
clause by reference will make no change to existing subcontract 
language. One commenter asserted that it would take at least ten hours 
to comply with the new requirement. The commenter asserted that it 
would involve attorneys, procurement, logistics, and vendor services. 
However, the commenter did not provide any specificity that would 
explain or support this estimate. OFCCP disagrees with this assessment 
as the activity simply involves finding the new clause, provided by 
either OFCCP or the procurement officer, and incorporating that new 
wording into a contract template. OFCCP's estimate takes into account 
the fact that many contractors are smaller and may not have staffing or 
departments devoted to procurement, logistics, or vendor services. 
Therefore, OFCCP retains its original estimate that contractors will 
spend approximately 15 minutes modifying existing contract templates to 
ensure the additional language is included. The estimated time burden 
for this provision is 125,000 hours (500,000 contractors x 0.25 hours = 
125,000 hours). The estimated cost of this provision is $3,883,438 
((125,000 hours x 0.25 x $51.58) + (125,000 x 0.75 x $24.23) = 
$3,883,438).
    The final rule adds Sec.  60-1.35(a) and (b) discussing contractor 
defenses to an allegation of violation of Sec.  60-1.4(a)(3) and 
(b)(3). The text of paragraph (a) incorporates the text in section 5(a) 
of Executive Order 13665. The text of paragraph (b) is drawn from the 
text in section 2(b) of the same Executive Order. There is no burden 
associated with the inclusion of these new paragraphs.
    Section 60-1.35(c) of the final rule requires contractors to 
disseminate the nondiscrimination provision by incorporating it into 
existing employee manuals or handbooks, and disseminating it to 
employees and to job applicants. This dissemination can be executed 
electronically or by posting a copy of the provision in conspicuous 
places available to employees and applicants for employment. In person 
or face-to-face communication of the provision is not required or 
recommended, however, contractors may use this method if they typically 
communicate information to all employees or applicants in this manner. 
In order to reduce the burden to contractors associated with 
disseminating the provision, the final rule requires contractors to 
adopt the nondiscrimination language provided by OFCCP into 
contractors' existing employee manuals or handbooks and otherwise make 
it available to employees and applicants. One commenter indicated that 
disseminating the policy to employees and applicants would take 
considerably more time as it would not only be necessary to incorporate 
the provision into handbooks and post the policy, but it would also 
require additional personnel to communicate and approve the changes to 
handbooks and postings. The provisions of this rule apply to all 
Federal contractors and subcontractors, thus when estimating the cost, 
it is necessary to factor in that many Federal contractors are small 
and do not have the same staff or human resources capabilities. Thus, 
OFCCP retains its original calculation, as it is more reflective of the 
range of Federal contractors and their respective practices. A second 
commenter indicated that contractors should be allowed to develop their 
own statements for incorporation into handbooks. OFCCP disagrees with 
both of these commenters. By providing the required language, OFCCP 
significantly reduces the burden of this requirement. The statement as 
written in the regulations must be included verbatim into existing 
handbooks. Allowing contractors to develop their own statements would 
be more burdensome for contractors, requiring additional resources for 
the development and review of the statement. Moreover, using a uniform 
statement eliminates confusion about

[[Page 54953]]

the appropriateness of the statement, and minimizes possible confusion 
by employees and applicants about the nature and purpose of the 
statement. Thus, OFCCP has selected the least burdensome alternative.
    Section 60-1.35(c)(i) requires contractors to include the 
nondiscrimination provision in existing employee manuals or handbooks. 
OFCCP assumes that most contractors (98 percent) maintain these 
documents electronically.\90\ For those contractors that maintain the 
documents electronically, we are not requiring contractors to 
physically reproduce their manuals to include the provision if they do 
not maintain hardcopies of manuals and handbooks. However, for those 
contractors that do not maintain their handbooks electronically, OFCCP 
believes those contractors (2 percent) will prepare and print a single 
errata sheet to update their hardcopy manual. OFCCP estimates it will 
take 20 minutes for contractors to locate, review, and reproduce the 
provision as provided by OFCCP and 15 minutes to incorporate it into 
existing employee manuals or handbooks; the total time required is 35 
minutes (or 0.58 hours) to comply with this provision. Therefore, OFCCP 
estimates the time burden of this provision is 290,000 hours (500,000 
contractor companies x 0.58 hours = 290,000 hours). The estimated cost 
of this provision is $9,009,575 ((290,000 hours x 0.25 x $51.58) + 
(290,000 hours x 0.75 x $24.23)).\91\ OFCCP believes that this 
estimation may overstate the burden as it assumes that all 500,000 
contractors have a handbook including contractors with fewer than 10 
employees. The smaller contractors, those with 10 or fewer employers, 
represent 58 percent of the contractors in the SAM database and are the 
less likely to have formal employee handbooks.
---------------------------------------------------------------------------

    \90\ This is based on the Equal Employment Opportunity 
Commission representation that 98 percent of the employers 
submitting the EEO-1 report file their submissions electronically 
through a Web based online filing system. See Supporting Statement 
for Recordkeeping and Reporting Requirements for Employer 
Information Report (EEO-1), p. 1, OMB Control 3046-0007 Employer 
Information Report (EEO-1), available at http://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201412-3046-001 (last accessed May 
5, 2015).
    \91\ OFCCP assumes that administrative support will identify the 
appropriate clause, and insert it into the handbook (75 percent) 
with management oversight (25 percent).
---------------------------------------------------------------------------

    Section 60-1.35(c)(ii) requires contractors to disseminate the 
nondiscrimination provision to employees and to job applicants. This 
dissemination can be executed by electronic posting or by posting a 
copy of the provision in conspicuous places available to employees and 
applicants for employment. OFCCP believes that 99 percent of 
contractors will post the information electronically while 1 percent 
will post the provision on employee bulletin boards. OFCCP's estimate 
is that it will take 15 minutes (or 0.25 hours) for contractors posting 
the provision electronically to prepare and post the provision. 
Additionally, OFCCP estimates it will take 75 minutes (or 1.25 hours) 
for contractors posting the provision manually to prepare the provision 
and post it in conspicuous places available to employees and applicants 
for employment. Therefore, OFCCP estimates that the time burden of this 
provision is 130,000 hours ((500,000 contractor companies x 99% x 0.25 
hours) + (500,000 contractor companies x 1% x 1.25 hours) = 130,000 
hours). The estimated cost of this provision is $4,038,775 ((123,750 
hours x 0.25 x $51.58 + 123,750 hours x 0.75 x $24.23) + (6,250 hours x 
0.25 x $51.58) + (6,250 hours x 0.75 x $24.23)).\92\
---------------------------------------------------------------------------

    \92\ OFCCP assumes that administrative support will copy and 
paste the clause into a notice and either post or send it 
electronically (75 percent) with management oversight (25 percent).
---------------------------------------------------------------------------

    Contractors are required to maintain documentation of other 
notices; the regulations implementing Executive Order 11246, VEVRAA and 
Section 503 currently require recordkeeping related to personnel and 
employment activity. See 41 CFR 60-1.12; 60-4.3(a)(7); 60-300.80; 60-
741.80. Consequently, there is no new time burden or cost for retaining 
copies of the notices to employees.
    OFCCP estimates that the combined time burden for becoming familiar 
with and complying with the final rule is 1,045,000 hours (500,000 
hours + 125,000 hours + 290,000 hours + 130,000 hours = 1,045,000 
hours).
Operations and Maintenance Costs
    In addition to the time burden calculated above, OFCCP estimates 
that contractors will incur operations and maintenance costs, mostly in 
the form of materials.
Section 60-1.35(c)(i)
    OFCCP estimates that 1 percent of contractors (5,000 contractor 
companies) will incorporate the nondiscrimination provision into their 
existing hardcopy handbook or manual. OFCCP estimates that these 5,000 
contractor companies will incorporate into an existing handbook or 
manual a single one-page errata sheet that includes the 
nondiscrimination provision. OFCCP estimates the one-time operations 
and maintenance cost of this provision is $400 (500,000 contractors x 
1% x 1 page x $0.08 = $400).
Section 60-1.35(c)(ii)
    OFCCP estimates that 1 percent of contractors will inform employees 
by posting the provision on existing employee bulletin boards. OFCCP 
assumes that on average these contractors will post the policy on 10 
bulletin boards. Therefore OFCCP estimates the operations and 
maintenance cost of this provision is $4,000 (500,000 contractor 
companies x 1% x 10 pages x $0.08 = $4,000).
    The estimated total first year cost of the final rule is 
$42,726,188 or $85 per contractor company. Below, in Table 1, is a 
summary of the burden hours and costs; Table 2 shows the total cost 
summary for the first year and recurring years.

                    Table 1--Contractor Requirements
------------------------------------------------------------------------
               Estimated First-Year Burden Hours and Costs
-------------------------------------------------------------------------
                 Section                   Burden hours        Costs
------------------------------------------------------------------------
Regulatory Familiarization..............         500,000     $25,790,000
60-1.3 Definitions......................               0               0
60-1.4(a) and (b) Contracting agencies           125,000       3,883,438
 amend the equal opportunity clause.....
60-1.4(d) Change ``Deputy Assistant                    0               0
 Secretary'' to ``Director of OFCCP''...
60-1.35(c)(i) Incorporation into manuals         290,000       9,009,575
 or handbooks...........................
60-1.35(c)(ii) Making the provision              130,000       4,038,775
 available to employees and applicants
 via electronic posting or manually
 posting a copy.........................
                                         -------------------------------

[[Page 54954]]

 
    Total First-Year Burden Hours and          1,045,000      42,721,788
     Costs..............................
------------------------------------------------------------------------
               Estimated Recurring Burden Hours and Costs
------------------------------------------------------------------------
                 Section                   Burden hours        Costs
------------------------------------------------------------------------
60-1.35(a) and (b) Defenses.............               0               0
    Total Annual Recurring Burden Hours                0               0
     and Costs..........................
 
                                         -------------------------------
    Total Operations and Maintenance                   0           4,400
     Costs..............................
 
                                         -------------------------------
    Total Burden Hours and Cost of the         1,045,000     $42,726,188
     Final Rule.........................
------------------------------------------------------------------------


                                           Table 2--Total Cost Summary
----------------------------------------------------------------------------------------------------------------
                                                                                                  Per contractor
                                                                       Hours           Costs          company
----------------------------------------------------------------------------------------------------------------
First Year Hours/Costs..........................................       1,045,000     $42,726,188             $85
Annual Recurring Hours/Cost.....................................               0               0               0
----------------------------------------------------------------------------------------------------------------

Summary of Benefits and Transfers
    Executive Order 13563 recognizes that some rules have benefits that 
are difficult to quantify or monetize but are, nevertheless, important 
and states that agencies may consider such benefits. This rule, to the 
extent that it is effective, has equity and fairness benefits, which 
are explicitly recognized in Executive Order 13563. Enabling the 
employees and applicants of Federal contractors to discuss their 
compensation without fear of adverse action can contribute to reducing 
pay discrimination and ensuring that qualified and productive employees 
receive fair compensation. OFCCP designed the final rule to achieve 
these benefits by:
     Supporting more effective enforcement of the prohibition 
against compensation discrimination.
     Providing better remedies to workers victimized by 
compensation discrimination.
     Increasing employees' and applicants' understanding of the 
value of their skills in the labor market.
     Enhancing the ability of Federal contractors and their 
employees to detect and remediate unlawful discriminatory practices.
Social Benefits of Improved Nondiscrimination Enforcement
    Social science research suggests antidiscrimination law can have 
broad social benefits, not only to those workers who are explicitly 
able to mobilize their rights and obtain redress, but also to the 
workforce and the economy as a whole. In general, discrimination is 
incompatible with an efficient labor market. Discrimination interferes 
with the ability of workers to find jobs that match their skills and 
abilities and to obtain wages consistent with a well-functioning 
marketplace.\93\ Discrimination may reflect market failure, where 
collusion or other anti-discriminatory practices allow majority group 
members to shift the costs of discrimination to minority group 
members.\94\
---------------------------------------------------------------------------

    \93\ Shelley J. Lundberg and Richard Starz, ``Private 
Discrimination and Social Intervention in Competitive Labor 
Markets,'' 73 American Economic Review 340 (1983); Dennis J. Aigner 
and Glen G. Cain, ``Statistical Theories of Discrimination in Labor 
Markets,'' 30 Industrial and Labor Relations Review, 175 (1977).
    \94\ Kenneth J. Arrow, ``What Has Economics to Say about Racial 
Discrimination?,'' 12 The Journal of Economic Perspectives 91 
(1998).
---------------------------------------------------------------------------

    For this reason, effective nondiscrimination enforcement can 
promote economic efficiency and growth. For example, a number of 
scholars have documented the benefits of the civil rights movement and 
the adoption of Title VII of the Civil Rights Act of 1964 on the 
economic prospects of workers and the larger economy.\95\ One recent 
study estimated that improved workforce participation by women and 
minorities, including through adoption of civil rights laws and 
changing social norms, accounts for 15-20 percent of aggregate wage 
growth between 1960 and 2008.\96\ On a smaller scale, the benefits of 
this rule have the potential to make an economic impact by providing 
employees of Federal contractors with a tool that allows them to 
identify potential compensation discrimination that undermines their 
financial security.
---------------------------------------------------------------------------

    \95\ J. Hoult Verkerke, ``Free to Search,'' 105 Harvard Law 
Review 2080 (1992); James J. Heckman and Brook S. Payner, 
``Determining the Impact of Federal Anti-Discrimination Policy on 
the Economic Status of Blacks: A Study of South Carolina,'' 79 
American Economic Review 138 (1989).
    \96\ Hsieh, C., Hurst, E. Jones, C. I., Klenow, P. J. ``The 
Allocation of Talent and U.S. Economic Growth,'' NBER Working Paper 
(2013).
---------------------------------------------------------------------------

Regulatory Flexibility Act and Executive Order 13272 (Consideration of 
Small Entities)

    The Regulatory Flexibility Act of 1980 (RFA) 5 U.S.C. 601 et seq., 
as amended requires agencies to prepare regulatory flexibility analyses 
and make them available for public comment, when proposing regulations 
that will have a significant economic impact on a substantial number of 
small entities. See 5 U.S.C. 603. If the rule is not expected to have a 
significant economic impact on a substantial number of small entities 
the RFA allows an agency to certify such, in lieu of preparing an 
analysis. See 5 U.S.C. 605. As explained in the initial Regulatory 
Flexibility Act and Executive Order 13272 section of the proposed rule, 
OFCCP did not expect the proposed rule to have a significant economic 
impact on a substantial number of small entities. 79 FR 55712 
(September 17, 2014). However in the interest of transparency and to 
provide

[[Page 54955]]

an opportunity for public comment, OFCCP prepared an initial regulatory 
flexibility analysis rather than certifying that the proposed rule was 
not expected to have a significant economic impact on a substantial 
number of small entities. In the NPRM, OFCCP specifically requested 
comments on the initial regulatory flexibility analysis, including the 
number of small entities affected by the Executive Order's prohibition 
on Federal contractors from discriminating against employees and job 
applicants, the compliance cost estimates, and whether alternatives 
exist that will reduce burden on small entities while still remaining 
consistent with the objective of Executive Order 13665. See 79 FR 55726 
(September 17, 2014). While OFCCP received eleven comments that 
addressed the costs and burdens of the proposed rule, none commented on 
the initial regulatory flexibility analysis. Thus, as explained below, 
OFCCP is adopting the proposed rule's economic analysis for purposes of 
the final rule.
    In the NPRM, OFCCP estimated the impact on small entities that are 
covered contractors of complying with the requirements contained in 
this final rule, OFCCP certifies that this rule will not have a 
significant economic impact on a substantial number of small entities. 
In making this certification, OFCCP determined that all small entities 
subject to Executive Order 11246 would be required to comply with all 
of the provisions of the final rule and that the compliance cost would 
be approximately $85 per contractor. Such compliance requirements are 
more fully described above in other portions of this preamble. The 
following section analyzes the cost of complying with Executive Order 
13665.
    In estimating the annual economic impact of this rule on the 
economy, OFCCP determined the compliance cost of the rule and whether 
the costs would be significant for a substantial number of small 
contractor firms (i.e. small business firms that enter into contracts 
with the Federal Government). If the estimated compliance costs for 
affected small contractor firms are less than 3 percent of small 
contractor firms' revenues, OFCCP considered it appropriate to conclude 
that this rule will not have a significant economic impact on the small 
contractor firms covered by Executive Order 13665. OFCCP has chosen 3 
percent as the significance criteria; however, using this benchmark as 
an indicator of significant impact may overstate the significance of 
such an impact, since the costs associated with prohibiting 
discrimination against employees and job applicants who inquire about 
or discuss their own compensation or the compensation of other 
employees or applicants are expected to be mitigated to some degree by 
the benefits of the rule. The benefits, which may include improved 
employee productivity and decreased employee turnover, are discussed 
more fully in the preamble of this final rule.
    The data sources used in the analysis of small business impact are 
the Small Business Administration's (SBA) Table of Small Business Size 
Standards,\97\ the Current Population Survey (CPS), and the U.S. Census 
Bureau's Statistics of U.S. Businesses (SUSB).\98\ Since Federal 
contractors are not limited to specific industries, OFCCP assessed the 
impact of the proposed rule across the 19 industrial 
classifications.\99\ Because data limitations do not allow OFCCP to 
determine which of the small firms within these industries are Federal 
contractors, OFCCP assumes that these small firms are not significantly 
different from the small Federal contractors that will be directly 
affected by the rule.
---------------------------------------------------------------------------

    \97\ U.S. Small Business Administration, Office of Advocacy, 
``Firm Size Data, Statistics of U.S. Businesses, Business Dynamics 
Statistics, Business Employment Dynamics, and Nonemployer 
Statistics,'' available at http://www.sba.gov/advocacy/849/12162#susb (last accessed June 9, 2014).
    \98\ U.S. Census Bureau, Statistics of U.S. Businesses, ``Latest 
SUSB Annual Data,'' available at http://www.census.gov/econ/susb/ 
(last accessed June 9, 2014).
    \99\ Agriculture, Forestry, Fishing, and Hunting Industry (North 
American Industry Classification System (NAICS) 11, Mining NAICS 21, 
Utilities NAICS 22, Construction NAICS 23, Manufacturing, NAICS 31-
33, Wholesale Trade NAICS 42, Retail Trade NAICS 44-45, 
Transportation and Warehousing NAICS 48-49, Information NAICS 51, 
Finance and Insurance NAICS 52, Real Estate and Rental and Leasing 
NAICS 53, Professional, Scientific, and Technical Services NAICS 54, 
Management of Companies and Enterprises NAICS 55, Administrative and 
Support and Waste Management and Remediation Services NAICS 56, 
Educational Services NAICS 61, Healthcare and Social Assistance 
NAICS 62, Arts, Entertainment, and Recreation NAICS 71, 
Accommodation and Food Services NAICS 72, Other Services NAICS 81.
---------------------------------------------------------------------------

    OFCCP used the following steps to estimate the cost of the proposed 
rule per small contractor firm as measured by a percentage of the total 
annual receipts. First, OFCCP used Census SUSB data that disaggregates 
industry information by firm size in order to perform a robust analysis 
of the impact on small contractor firms. OFCCP applied the SBA small 
business size standards to the SUSB data to determine the number of 
small firms in the affected industries. Then OFCCP used receipts data 
from the SUSB to calculate the cost per firm as a percent of total 
receipts by dividing the estimated annual cost per firm by the average 
annual receipts per firm. This methodology was applied to each of the 
industries and the results by industry are presented in Tables 3-21 
below.
    In sum, the increased cost of compliance resulting from the 
proposed rule is de minimis relative to revenue at small contractor 
firms no matter their size. All of the industries had an annual cost 
per firm as a percent of receipts of 3 percent or less. For instance, 
the manufacturing industry cost is estimated to range from 0.00 percent 
for firms that have average annual receipts of approximately $985 
million to 0.02 percent for firms that have average annual receipts of 
under $500,000. Management of companies and enterprises is the industry 
with the highest relative costs, with a range of 0.00 percent for firms 
that have average annual receipts of approximately $2 million to 0.36 
percent for firms that have average annual receipts of under $24,000. 
Therefore, OFCCP determined that in no instance was the effect of the 
proposed rule greater than 3 percent of total receipts.
    OFCCP then determined the number of small contractor firms actually 
affected by the proposed rule. This information is not readily 
available. The best source for the number of small contractor firms 
that are affected by this proposed rule is GSA's System for Award 
Management (SAM). OFCCP used SAM data to estimate the number of 
affected small contractor firms since SAM data allow us to directly 
estimate the number of small contractor firms. Federal contractor 
status cannot be discerned from the SBA firm size data. It can only be 
used to estimate the number of small firms, not the number of small 
contractor firms. OFCCP used the SBA data to estimate the impact of the 
proposed regulation on a ``typical'' or ``average'' small firm in each 
of the 19 industries. OFCCP then assumed that a typical small firm is 
similar to a small contractor firm. Thus, based on its analysis, OFCCP 
believes that this rule will not have a significant economic effect on 
a substantial number of small businesses.
    Based on the most current SAM data available, if OFCCP defines 
small as fewer than 500 employees, then there are 328,552 small 
contractor firms. If OFCCP defines small as firms with less than $35.5 
million in revenues, then there are 315,902 small contractor firms. 
Thus, OFCCP established the range from 315,902 to 328,552 as the total 
number of small contractor firms. Of course, not all of these 
contractor firms will be impacted by the proposed rule; only those 
contractor firms that have policies

[[Page 54956]]

that prohibit employees and job applicants from inquiring about, 
discussing or disclosing their own compensation or the compensation of 
other employees or job applicants. Thus, this range is an overestimate 
of the number of firms affected by the proposed rule because some of 
those small contractor firms do not have such a policy or practice. As 
the proposed regulation applies to contractors covered by Executive 
Order 11246, OFCCP estimates that the range of small firms impacted 
ranges from 315,902 to 328,552 or all covered Federal contractor 
companies.
    OFCCP has closely reviewed the economic analysis it utilized in the 
proposed rule and carefully considered all the comments received. Based 
on its review and consideration, OFCCP has concluded that the method 
used to conduct the economic analysis in the proposed rule reasonably 
estimated the annual effect of the rule, based on the data sources 
available to OFCCP. OFCCP is accordingly adopting the proposed rule's 
economic analysis for purposes of the final rule.

   Table 3--Cost per Small Firm in the Agriculture, Forestry, Fishing, and Hunting Industry, the SBA Small Business Size Standard for This Industry Is
                                                               $0.75 Million-$27.5 Million
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Agriculture, forestry, fishing, and hunting industry
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Annual cost
                                                                           Average                                            Average       per firm as
                                         Number of      Total number      number of      Annual cost    Annual receipts    receipts  per    percent of
                                           firms        of employees   employees  per   per firm \2\                         firm \3\      receipts \4\
                                                                          firm \1\                                                           (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firms with sales/receipts/revenue              5,086              N/A             N/A             $85       $247,056,000         $48,576            0.17
 below $100,000.....................
Firms with sales/receipts/revenue of           8,939           21,523             2.4              85      2,231,355,000         249,620            0.03
 $100,000 to $499,999...............
Firms with sales/receipts/revenue of           3,670           19,631             5.3              85      2,620,344,000         713,990            0.01
 $500,000 to $999,999...............
Firms with sales/receipts/revenue of           3,230           30,944             9.6              85      4,975,078,000       1,540,272            0.01
 $1,000,000 to $2,499,999...........
Firms with sales/receipts/revenue of           1,117           20,049            17.9              85      3,811,000,000       3,411,817            0.00
 $2,500,000 to $4,999,999...........
Firms with sales/receipts/revenue of             289            8,997            31.1              85      1,730,128,000       5,986,602            0.00
 $5,000,000 to $7,499,999...........
Firms with sales/receipts/revenue of             165            7,588            46.0              85      1,340,763,000       8,125,836            0.00
 $7,500,000 to $9,999,999...........
Firms with sales/receipts/revenue of             112            6,130            54.7              85      1,288,588,000      11,505,250            0.00
 $10,000,000 to $14,999,999.........
Firms with sales/receipts/revenue of              55            4,042            73.5              85         874,841,00      15,906,200            0.00
 $15,000,000 to $19,999,999.........
Firms with sales/receipts/revenue of              44            5,325           121.0              85        858,761,000      19,517,295            0.00
 $20,000,000 to $24,999,999.........
Firms with sales/receipts/revenue of              26            2,800           107.7              85        595,387,000      22,899,500            0.00
 $25,000,000 to $29,999,999.........
--------------------------------------------------------------------------------------------------------------------------------------------------------
N/A = not available, not disclosed
\1\ In the case of agriculture, forestry, fishing, and hunting firms with receipts of $100,000 to $499,999, the average number of employees per firm
  (2.4) was derived by dividing the total number of employees (21,523) by the number of firms (8,939).
\2\ The annual cost per firm ($85) accounts for regulatory familarization, including the policy in existing handbooks, including it in existing manager
  meetings, and informing employees of the prohibition.
\3\ In the case of agriculture, forestry, fishing, and hunting firms with receipts of $100,000 to $499,999, the average receipts per firm ($249,620) was
  derived by dividing the total annual receipts ($2,231,355,000) by the number of firms (8,939).
\4\ In the case of agriculture, forestry, fishing and hunting firms with receipts of $100,000 to $499,999, the annual cost per firms as a percent of
  receipts (0.03 percent) was derived by dividing the annual cost per firm ($119) by the average receipts per firm ($249,620).


[[Page 54957]]


               Table 4--Cost per Small Firm in the Mining Industry the SBA Small Business Size Standard for This Industry Is 500 Employees
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Mining industry
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Annual cost
                                                                           Average                                            Average       per firm as
                                         Number of      Total number      number of      Annual cost    Annual receipts    receipts  per    percent of
                                           firms        of employees   employees  per   per firm \2\                         firm \3\      receipts \4\
                                                                          firm \1\                                                           (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firms with 0-4 employees............          11,223           17,874             1.6             $85     $6,809,517,000        $606,747            0.01
Firms with 5-9 employees............           3,186           21,314             6.7              85      6,304,810,000       1,978,911            0.00
Firms with 10-19 employees..........           2,451           33,344            13.6              85      9,092,457,000       3,709,693            0.00
Firms with 20-99 employees..........           2,775          107,447            38.7              85     32,035,288,000      11,544,248            0.00
Firms with 100-499 employees........             690          102,299           148.3              85     38,463,690,000      55,744,478            0.00
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ In the case of mining firms with 0-4 employees, the average number of employees per firm (1.6) was derived by dividing the total number of employees
  (17,874) by the number of firms (11,223).
\2\ The annual cost per firm ($85) accounts for regulatory familarization, including the policy in existing handbooks, including it in existing manager
  meetings, and informing employees of the prohibition.
\3\ In the case of mining firms with 0 4 employees, the average receipts per firm ($606,747) was derived by dividing the total annual receipts
  ($6,809,517,000) by the number of firms (11,223).
\4\ In the case of mining firms with 0 4 employees, the annual cost per firm as a percent of receipts (0.01 percent) was derived by dividing the annual
  cost per firm ($119) by the average receipts per firms ($606,747).


          Table 5--Cost per Small Firm in the Utilities Industry the SBA Small Business Size Standard for This Industry Is 250-1,000 Employees
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Utilities industry
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Annual cost
                                                                           Average                                            Average       per firm as
                                         Number of      Total number      number of      Annual cost    Annual receipts    receipts  per    percent of
                                           firms        of employees   employees  per     per firm                             firm          receipts
                                                                            firm                                                             (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firms with 0-4 employees............           3,212            6,181             1.9             $85     $7,238,519,000      $2,253,586            0.00
Firms with 5-9 employees............           1,020            6,546             6.4              85      4,373,888,000       4,288,125            0.00
Firms with 10-19 employees..........             513            6,722            13.1              85      5,657,251,000      11,027,780            0.00
Firms with 20-99 employees..........             870           38,602            44.4              85     27,513,924,000      31,625,200            0.00
Firms with 100-499 employees........             309           52,294           169.2              85     53,091,123,000     171,815,932            0.00
Firms with 500+ employees \1\.......             199          512,412         2,574.9              85    475,894,489,000   2,391,429,593            0.00
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The small business size for several subsectors within the utilities industry is 750 or 1,000 employees; however, data are not disaggregated for
  firms with more than 500 employees.


     Table 6--Cost per Small Firm in the Construction Industry the SBA Small Business Size Standard for This Industry Is $15 million-$36.5 million.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Construction industry
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Annual cost
                                                                           Average                                            Average       per firm as
                                         Number of      Total number      number of      Annual cost    Annual receipts    receipts  per    percent of
                                           firms        of employees   employees  per     per firm                             firm          receipts
                                                                            firm                                                             (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firms with sales/receipts/revenue            151,986              N/A             N/A             $85     $7,636,718,000         $50,246            0.17
 below $100,000.....................
Firms with sales/receipts/revenue of         316,475          776,806             2.5              85     81,110,428,000         256,293            0.03
 $100,000 to $499,999...............

[[Page 54958]]

 
Firms with sales/receipts/revenue of         124,214          642,823             5.2              85     88,028,843,000         708,687            0.01
 $500,000 to $999,999...............
Firms with sales/receipts/revenue of         110,546        1,049,670             9.5              85    173,054,634,000       1,565,454            0.01
 $1,000,000 to $2,499,999...........
Firms with sales/receipts/revenue of          47,962          864,701            18.0              85    167,758,626,000       3,497,740            0.00
 $2,500,000 to $4,999,999...........
Firms with sales/receipts/revenue of          16,992          492,370            29.0              85    102,502,053,000       6,032,371            0.00
 $5,000,000 to $7,499,999...........
Firms with sales/receipts/revenue of           7,801          308,512            39.5              85     66,977,650,000       8,585,777            0.00
 $7,500,000 to $9,999,999...........
Firms with sales/receipts/revenue of           8,259          427,159            51.7              85     99,174,146,000      12,008,009            0.00
 $10,000,000 to $14,999,999.........
Firms with sales/receipts/revenue of           4,354          289,441            66.5              85     73,881,089,000      16,968,555            0.00
 $15,000,000 to $19,999,999.........
Firms with sales/receipts/revenue of           2,611          209,081            80.1              85     56,928,754,000      21,803,429            0.00
 $20,000,000 to $24,999,999.........
Firms with sales/receipts/revenue of           1,621          150,754            93.0              85     43,119,720,000      26,600,691            0.00
 $25,000,000 to $29,999,999.........
Firms with sales/receipts/revenue of           1,171          121,928           104.1              85     36,848,837,000      31,467,837            0.00
 $30,000,000 to $34,999,999.........
Firms with sales/receipts/revenue of             831           94,903           114.2              85     30,307,198,000      36,470,756            0.00
 $35,000,000 to $39,999,999.........
--------------------------------------------------------------------------------------------------------------------------------------------------------
N/A = not available, not disclosed


        Table 7--Cost per Small Firm in the Manufacturing Industry the SBA Small Business Size Standard for This Industry Is 500-1,500 Employees
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Manufacturing industry
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Annual cost
                                                                           Average                                            Average       per firm as
                                         Number of      Total number      number of      Annual cost    Annual receipts    receipts  per    percent of
                                           firms        of employees   employees  per     per firm                             firm          receipts
                                                                            firm                                                             (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firms with 0-4 employees............         114,635          213,123             1.9             $85    $46,236,636,000        $403,338            0.02
Firms with 5-9 employees............          53,500          358,110             6.7              85     53,036,608,000         991,338            0.01
Firms with 10-19 employees..........          44,939          612,113            13.6              85     97,897,887,000       2,178,462            0.00

[[Page 54959]]

 
Firms with 20-99 employees..........          55,603        2,288,585            41.2              85    440,739,564,000       7,926,543            0.00
Firms with 100-199 employees........          13,945        2,445,779           175.4              85    634,737,830,000      45,517,234            0.00
Firms with 500+ employees \1\.......           4,079        7,402,462         1,814.8              85  4,019,587,050,000     985,434,432            0.00
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The small business size standard for many subsectors within the manufacturing industry is 750, 1,000, or 1,500 employees; however, data are not
  disaggregated for firms with more than 500 employees.


          Table 8--Cost per Small Firm in the Wholesale Trade Industry the SBA Small Business Size Standard for This Industry Is 100 Employees
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Wholesale trade industry
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Annual cost
                                                                           Average                                            Average       per firm as
                                         Number of      Total number      number of      Annual cost    Annual receipts    receipts  per    percent of
                                           firms        of employees   employees  per     per firm                             firm          receipts
                                                                            firm                                                             (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firms with 0-4 employees............         190,153          325,412             1.7             $85   $297,267,502,000      $1,563,307            0.01
Firms with 5-9 employees............          57,366          377,841             6.6              85    249,842,292,000       4,355,233            0.00
Firms with 10-19 employees..........          39,354          525,216            13.3              85    325,243,478,000       8,264,560            0.00
Firms with 20-99 employees..........          36,783        1,365,914            37.1              85    899,443,843,000      24,452,705            0.00
--------------------------------------------------------------------------------------------------------------------------------------------------------


     Table 9--Cost per Small Firm in the Retail Trade Industry the SBA Small Business Size Standard for This Industry Is $7.5 Million-$38.5 Million
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Retail trade industry
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Annual cost
                                                                           Average                                            Average       per firm as
                                         Number of      Total number      number of      Annual cost    Annual receipts    receipts  per    percent of
                                           firms        of employees   employees  per     per firm                             firm          receipts
                                                                            firm                                                             (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firms with sales/receipts/revenue             98,659              N/A             N/A             $85     $5,008,702,000         $50,768            0.17
 below $100,000.....................
Firms with sales/receipts/revenue of         251,705          727,585             2.9              85     67,380,242,000         267,695            0.03
 $100,000 to $499,999...............
Firms with sales/receipts/revenue of         122,575          634,006             5.2              85     87,491,736,000         713,781            0.01
 $500,000 to $999,999...............
Firms with sales/receipts/revenue of         120,985        1,019,672             8.4              85    190,373,341,000       1,573,528            0.01
 $1,000,000 to $2,499,999...........
Firms with sales/receipts/revenue of          55,634          774,581            13.9              85    193,186,239,000       3,472,449            0.00
 $2,500,000 to $4,999,999...........
Firms with sales/receipts/revenue of          19,594          418,263            21.3              85    117,223,823,000       5,982,639            0.00
 $5,000,000 to $7,499,999...........

[[Page 54960]]

 
Firms with sales/receipts/revenue of           9,582          272,697            28.5              85     80,790,141,000       8,431,449            0.00
 $7,500,000 to $9,999,999...........
Firms with sales/receipts/revenue of           9,824          366,889            37.3              85    115,236,313,000      11,730,081            0.00
 $10,000,000 to $14,999,999.........
Firms with sales/receipts/revenue of           5,310          256,826            48.4              85     86,999,536,000      16,384,093            0.00
 $15,000,000 to $19,999,999.........
Firms with sales/receipts/revenue of           3,498          201,289            57.5              85     72,964,681,000      20,858,971            0.00
 $20,000,000 to $24,999,999.........
Firms with sales/receipts/revenue of           2,438          167,596            68.7              85     61,987,531,000      25,425,566            0.00
 $25,000,000 to $29,999,999.........
Firms with sales/receipts/revenue of           1,835          144,987            79.0              85     55,162,317,000      30,061,208            0.00
 $30,000,000 to $34,999,999.........
Firms with sales/receipts/revenue of           1,491          122,188            82.0              85     50,711,404,000      34,011,673            0.00
 $35,000,000 to $39,999,999.........
--------------------------------------------------------------------------------------------------------------------------------------------------------
N/A = not available, not disclosed.


  Table 10--Cost per Small Firm in the Transportation and Warehousing Industry the SBA Small Business Size Standard for This Industry Is $7.5 Million-
                                                                      $38.5 Million
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Transportation and warehousing industry
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Annual cost
                                                                           Average                                            Average       per firm as
                                         Number of      Total number      number of      Annual cost    Annual receipts    receipts  per    percent of
                                           firms        of employees   employees  per     per firm                             firm          receipts
                                                                            firm                                                             (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firms with sales/receipts/revenue             40,510              N/A             N/A             $85     $1,939,749,000         $47,883            0.18
 below $100,000.....................
Firms with sales/receipts/revenue of          67,987          181,924             2.7              85     16,284,066,000         239,517            0.04
 $100,000 to $499,999...............
Firms with sales/receipts/revenue of          22,377          151,091             6.7              85     15,756,895,000         704,156            0.01
 $500,000 to $999,999...............
Firms with sales/receipts/revenue of          20,915          271,012            13.0              85     32,305,484,000       1,544,608            0.01
 $1,000,000 to $2,499,999...........
Firms with sales/receipts/revenue of           9,183          223,156            24.3              85     31,359,227,000       3,414,922            0.00
 $2,500,000 to $4,999,999...........
Firms with sales/receipts/revenue of           3,550          136,436            38.4              85     20,463,648,000       5,764,408            0.00
 $5,000,000 to $7,499,999...........

[[Page 54961]]

 
Firms with sales/receipts/revenue of           1,800           91,408            50.8              85     14,261,554,000       7,923,086            0.00
 $7,500,000 to $9,999,999...........
Firms with sales/receipts/revenue of           1,840          123,966            67.4              85     19,933,921,000      10,833,653            0.00
 $10,000,000 to $14,999,999.........
Firms with sales/receipts/revenue of             988           85,367            86.4              85     14,057,603,000      14,228,343            0.00
 $15,000,000 to $19,999,999.........
Firms with sales/receipts/revenue of             621           68,836           110.8              85     11,060,118,000      17,810,174            0.00
 $20,000,000 to $24,999,999.........
Firms with sales/receipts/revenue of             429           51,989           121.2              85      8,257,805,000      19,248,963            0.00
 $25,000,000 to $29,999,999.........
Firms with sales/receipts/revenue of             311           45,274           145.6              85      7,184,425,000      23,101,045            0.00
 $30,000,000 to $34,999,999.........
Firms with sales/receipts/revenue of             235           32,922           140.1              85      5,902,588,000      25,117,396            0.00
 $35,000,000 to $39,999,999.........
--------------------------------------------------------------------------------------------------------------------------------------------------------
N/A = not available, not disclosed.


     Table 11--Cost per Small Firm in the Information Industry the SBA Small Business Size Standard for This Industry Is $7.5 Million-$38.5 Million
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Information industry
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Annual cost
                                                                           Average                                            Average       per firm as
                                         Number of      Total number      number of      Annual cost    Annual receipts    receipts  per    percent of
                                           firms        of employees   employees  per     per firm                             firm          receipts
                                                                            firm                                                             (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firms with sales/receipts/revenue             15,960              N/A             N/A             $85       $767,642,000         $48,098            0.18
 below $100,000.....................
Firms with sales/receipts/revenue of          27,678           80,336             2.9              85      6,876,130,000         248,433            0.03
 $100,000 to $499,999...............
Firms with sales/receipts/revenue of          10,311           67,954             6.6              85      7,260,927,000         704,192            0.01
 $500,000 to $999,999...............
Firms with sales/receipts/revenue of           9,808          120,499            12.3              85     15,248,992,000       1,554,750            0.01
 $1,000,000 to $2,499,999...........
Firms with sales/receipts/revenue of           4,508          100,331            22.3              85     15,472,313,000       3,432,190            0.00
 $2,500,000 to $4,999,999...........
Firms with sales/receipts/revenue of           1,837           65,601            35.7              85     10,856,893,000       5,910,121            0.00
 $5,000,000 to $7,499,999...........

[[Page 54962]]

 
Firms with sales/receipts/revenue of           1,018           46,846            46.0              85      8,447,070,000       8,297,711            0.00
 $7,500,000 to $9,999,999...........
Firms with sales/receipts/revenue of           1,092           68,058            62.3              85     12,300,328,000      11,264,037            0.00
 $10,000,000 to $14,999,999.........
Firms with sales/receipts/revenue of             601           49,812            82.9              85      9,293,544,000      15,463,468            0.00
 $15,000,000 to $19,999,999.........
Firms with sales/receipts/revenue of             389           37,522            96.5              85      7,616,666,000      19,580,118            0.00
 $20,000,000 to $24,999,999.........
Firms with sales/receipts/revenue of             270           30,523           113.0              85      6,512,265,000      24,119,500            0.00
 $25,000,000 to $29,999,999.........
Firms with sales/receipts/revenue of             175           25,649           146.6              85      4,971,718,000      28,409,817            0.00
 $30,000,000 to $34,999,999.........
Firms with sales/receipts/revenue of             136           21,553           158.5              85      4,082,897,000      30,021,301            0.00
 $35,000,000 to $39,999,999.........
--------------------------------------------------------------------------------------------------------------------------------------------------------
N/A = not available, not disclosed.


Table 12--Cost per Small Firm in the Finance and Insurance Industry the SBA Small Business Size Standard for This Industry Is $7.5 Million-$38.5 Million
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Finance and insurance industry
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Annual cost
                                                                           Average                                            Average       per firm as
                                         Number of      Total number      number of      Annual cost    Annual receipts    receipts  per    percent of
                                           firms        of employees   employees  per     per firm                             firm          receipts
                                                                            firm                                                             (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firms with sales/receipts/revenue             61,548              N/A             N/A             $85     $2,931,522,000         $47,630            0.18
 below $100,000.....................
Firms with sales/receipts/revenue of         118,169          308,539             2.6              85     29,379,598,000         248,624            0.03
 $100,000 to $499,999...............
Firms with sales/receipts/revenue of          33,703          177,822             5.3              85     23,302,679,000         691,413            0.01
 $500,000 to $999,999...............
Firms with sales/receipts/revenue of          23,023          222,822             9.7              85     35,135,972,000       1,526,125            0.01
 $1,000,000 to $2,499,999...........
Firms with sales/receipts/revenue of           9,728          185,783            19.1              85     33,574,070,000       3,451,282            0.00
 $2,500,000 to $4,999,999...........
Firms with sales/receipts/revenue of           4,108          118,100            28.7              85     24,483,200,000       5,959,883            0.00
 $5,000,000 to $7,499,999...........

[[Page 54963]]

 
Firms with sales/receipts/revenue of           2,405           90,442            37.6              85     20,088,983,000       8,353,007            0.00
 $7,500,000 to $9,999,999...........
Firms with sales/receipts/revenue of           2,820          148,252            52.6              85     33,267,079,000      11,796,837            0.00
 $10,000,000 to $14,999,999.........
Firms with sales/receipts/revenue of           1,564          106,896            68.3              85     25,663,650,000      16,408,983            0.00
 $15,000,000 to $19,999,999.........
Firms with sales/receipts/revenue of           1,028           87,611            85.2              85     21,843,640,000      21,248,677            0.00
 $20,000,000 to $24,999,999.........
Firms with sales/receipts/revenue of             685           65,621            95.8              85     17,478,694,000      25,516,342            0.00
 $25,000,000 to $29,999,999.........
Firms with sales/receipts/revenue of             515           58,841           113.6              85     15,619,023,000      30,328,200            0.00
 $30,000,000 to $34,999,999.........
Firms with sales/receipts/revenue of             418           51,263           122.6              85     14,150,222,000      33,852,206            0.00
 $35,000,000 to $39,999,999.........
--------------------------------------------------------------------------------------------------------------------------------------------------------
N/A = not available, not disclosed.


Table 13--Cost per Small Firm in the Real Estate and Rental and Leasing Industry the SBA Small Business Size Standard for This Industry Is $7.5 Million-
                                                                      $38.5 Million
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Real estate and rental and leasing industry
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Annual cost
                                                                           Average                                            Average       per firm as
                                         Number of      Total number      number of      Annual cost    Annual receipts    receipts  per    percent of
                                           firms        of employees   employees  per     per firm                             firm          receipts
                                                                            firm                                                             (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firms with sales/receipts/revenue             86,219              N/A             N/A             $85     $4,165,673,000         $48,315            0.18
 below $100,000.....................
Firms with sales/receipts/revenue of         124,930          299,041             2.4              85     30,501,166,000         244,146            0.03
 $100,000 to $499,999...............
Firms with sales/receipts/revenue of          39,747          191,958             4.8              85     27,836,936,000         700,353            0.01
 $500,000 to $999,999...............
Firms with sales/receipts/revenue of          29,717          269,366             9.1              85     45,164,417,000       1,519,818            0.01
 $1,000,000 to $2,499,999...........
Firms with sales/receipts/revenue of          10,013          181,600            18.1              85     33,652,743,000       3,360,905            0.00
 $2,500,000 to $4,999,999...........
Firms with sales/receipts/revenue of           3,288           95,418            29.0              85     18,788,566,000       5,714,284            0.00
 $5,000,000 to $7,499,999...........

[[Page 54964]]

 
Firms with sales/receipts/revenue of           1,553           62,482            40.2              85     12,221,244,000       7,869,442            0.00
 $7,500,000 to $9,999,999...........
Firms with sales/receipts/revenue of           1,518           81,675            53.8              85     16,329,830,000      10,757,464            0.00
 $10,000,000 to $14,999,999.........
Firms with sales/receipts/revenue of             771           48,442            62.8              85     11,037,708,000      14,316,093            0.00
 $15,000,000 to $19,999,999.........
Firms with sales/receipts/revenue of             464           36,318            78.3              85      8,012,159,000      17,267,584            0.00
 $20,000,000 to $24,999,999.........
Firms with sales/receipts/revenue of             365           32,555            89.2              85      7,621,190,000      20,879,973            0.00
 $25,000,000 to $29,999,999.........
Firms with sales/receipts/revenue of             228           25,638           112.4              85      5,610,499,000      24,607,452            0.00
 $30,000,000 to $34,999,999.........
Firms with sales/receipts/revenue of             161           17,743           110.2              85      4,144,542,000      25,742,497            0.00
 $35,000,000 to $39,999,999.........
--------------------------------------------------------------------------------------------------------------------------------------------------------
N/A = not available, not disclosed.


Table 14--Cost per Small Firm in the Professional, Scientific, and Technical Services Industry the SBA Small Business Size Standard for This Industry Is
                                                               $7.5 Million-$38.5 Million
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Professional, scientific and technical services industry
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Annual cost
                                                                           Average                                            Average       per firm as
                                         Number of      Total number      number of      Annual cost    Annual receipts    receipts  per    percent of
                                           firms        of employees   employees  per     per firm                             firm          receipts
                                                                            firm                                                             (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firms with sales/receipts/revenue            207,967              N/A             N/A             $85     $9,968,674,000         $47,934            0.18
 below $100,000.....................
Firms with sales/receipts/revenue of         339,834          814,116             2.4              85     82,241,004,000         242,003            0.04
 $100,000 to $499,999...............
Firms with sales/receipts/revenue of         102,144          584,473             5.7              85     71,850,790,000         703,426            0.01
 $500,000 to $999,999...............
Firms with sales/receipts/revenue of          78,520          870,369            11.1              85    120,442,007,000       1,533,902            0.01
 $1,000,000 to $2,499,999...........
Firms with sales/receipts/revenue of          28,337          631,182            22.3              85     97,339,397,000       3,435,064            0.00
 $2,500,000 to $4,999,999...........
Firms with sales/receipts/revenue of           9,714          355,210            36.6              85     57,721,674,000       5,942,112            0.00
 $5,000,000 to $7,499,999...........

[[Page 54965]]

 
Firms with sales/receipts/revenue of           4,863          245,206            50.4              85     40,592,738,000       8,347,263            0.00
 $7,500,000 to $9,999,999...........
Firms with sales/receipts/revenue of           4,658          313,530            67.3              85     53,578,044,000      11,502,371            0.00
 $10,000,000 to $14,999,999.........
Firms with sales/receipts/revenue of           2,338          211,940            90.7              85     36,728,134,000      15,709,210            0.00
 $15,000,000 to $19,999,999.........
Firms with sales/receipts/revenue of           1,381          147,737           107.0              85     27,448,191,000      19,875,591            0.00
 $20,000,000 to $24,999,999.........
Firms with sales/receipts/revenue of             954          122,039           127.9              85     22,622,723,000      23,713,546            0.00
 $25,000,000 to $29,999,999.........
Firms with sales/receipts/revenue of             603           91,258           151.3              85     15,961,413,000      26,470,005            0.00
 $30,000,000 to $34,999,999.........
Firms with sales/receipts/revenue of             511           83,414           163.2              85     15,941,272,000      31,196,227            0.00
 $35,000,000 to $39,999,999.........
--------------------------------------------------------------------------------------------------------------------------------------------------------
N/A = not available, not disclosed.


  Table 15--Cost per Small Firm in the Management of Companies and Enterprises Industry the SBA Small Business Size Standard for This Industry Is $20.5
                                                                         Million
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    Management of companies and enterprises industry
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Annual cost
                                                                           Average                                            Average       per firm as
                                         Number of      Total number      number of      Annual cost    Annual receipts    receipts  per    percent of
                                           firms        of employees   employees  per     per firm                             firm          receipts
                                                                            firm                                                             (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firms with sales/receipts/revenue              1,895           11,318             6.0             $85        $44,606,000         $23,539            0.36
 below $100,000.....................
Firms with sales/receipts/revenue of           1,387            4,529             3.3              85        293,971,000         211,947            0.04
 $100,000 to $499,999...............
Firms with sales/receipts/revenue of             964            5,082             5.3              85        373,917,000         387,881            0.02
 $500,000 to $999,999...............
Firms with sales/receipts/revenue of           2,039           18,829             9.2              85      1,087,692,000         533,444            0.02
 $1,000,000 to $2,499,999...........
Firms with sales/receipts/revenue of           2,242           26,723            11.9              85      1,698,014,000         757,366            0.01
 $2,500,000 to $4,999,999...........
Firms with sales/receipts/revenue of           1,717           28,312            16.5              85      1,855,703,000       1,080,782            0.01
 $5,000,000 to $7,499,999...........

[[Page 54966]]

 
Firms with sales/receipts/revenue of           1,258           22,469            17.9              85      1,711,464,000       1,360,464            0.01
 $7,500,000 to $9,999,999...........
Firms with sales/receipts/revenue of           1,942           41,651            21.4              85      3,120,558,000       1,606,878            0.01
 $10,000,000 to $14,999,999.........
Firms with sales/receipts/revenue of           1,423           34,363            24.1              85      2,997,064,000       2,106,159            0.00
 $15,000,000 to $19,999,999.........
Firms with sales/receipts/revenue of           1,075           30,583            28.4              85      2,508,188,000       2,333,198            0.00
 $20,000,000 to $24,999,999.........
--------------------------------------------------------------------------------------------------------------------------------------------------------


   Table 16--Cost per Small Firm in the Administrative and Support and Waste Management and Remediation Services Industry the SBA Small Business Size
                                                Standard for This Industry Is $5.5 Million-$38.5 Million
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                     Administrative and support, waste management and remediation services industry
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Annual cost
                                                                           Average                                            Average       per firm as
                                         Number of      Total number      number of      Annual cost    Annual receipts    receipts  per    percent of
                                           firms        of employees   employees  per     per firm                             firm          receipts
                                                                            firm                                                             (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firms with sales/receipts/revenue             99,021          139,832             1.4             $85      $4,500,981,00         $45,455            0.19
 below $100,000.....................
Firms with sales/receipts/revenue of         129,948          513,457             4.0              85     31,661,803,000         243,650            0.03
 $100,000 to $499,999...............
Firms with sales/receipts/revenue of          40,405          409,563            10.1              85     28,444,220,000         703,978            0.01
 $500,000 to $999,999...............
Firms with sales/receipts/revenue of          31,127          725,649            23.3              85     47,963,623,000       1,540,901            0.01
 $1,000,000 to $2,499,999...........
Firms with sales/receipts/revenue of          12,294          678,340            55.2              85     42,093,718,000       3,423,924            0.00
 $2,500,000 to $4,999,999...........
Firms with sales/receipts/revenue of           4,589          434,622            94.7              85     26,428,877,000       5,759,180            0.00
 $5,000,000 to $7,499,999...........
Firms with sales/receipts/revenue of           2,411          311,321           129.1              85     19,304,673,000       8,006,915            0.00
 $7,500,000 to $9,999,999...........
Firms with sales/receipts/revenue of           2,309          424,912           184.0              85     24,412,659,000      10,572,828            0.00
 $10,000,000 to $14,999,999.........
Firms with sales/receipts/revenue of           1,266          292,501           231.0              85     17,408,483,000      13,750,776            0.00
 $15,000,000 to $19,999,999.........

[[Page 54967]]

 
Firms with sales/receipts/revenue of             724          208,939           288.6              85     12,542,375,000      17,323,722            0.00
 $20,000,000 to $24,999,999.........
Firms with sales/receipts/revenue of             528          174,359           330.2              85     10,341,768,000      19,586,682            0.00
 $25,000,000 to $29,999,999.........
Firms with sales/receipts/revenue of             402          173,953           432.7              85      9,015,658,000      22,427,010            0.00
 $30,000,000 to $34,999,999.........
Firms with sales/receipts/revenue of             267          122,013           457.0              85      6,382,657,000      23,905,082            0.00
 $35,000,000 to $39,999,999.........
--------------------------------------------------------------------------------------------------------------------------------------------------------


 Table 17--Cost per Small Firm in the Educational Services Industry the SBA Small Business Size Standard for This Industry Is $7.5 Million-$38.5 Million
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Educational services industry
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Annual cost
                                                                           Average                                            Average       per firm as
                                         Number of      Total number      number of      Annual cost    Annual receipts    receipts  per    percent of
                                           firms        of employees   employees  per     per firm                             firm          receipts
                                                                            firm                                                             (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firms with sales/receipts/revenue             21,831           50,906             2.3             $85     $1,003,931,000         $45,986            0.18
 below $100,000.....................
Firms with sales/receipts/revenue of          27,938          158,913             5.7              85      6,788,475,000         242,984            0.03
 $100,000 to $499,999...............
Firms with sales/receipts/revenue of           8,504          112,142            13.2              85      5,984,604,000         703,740            0.01
 $500,000 to $999,999...............
Firms with sales/receipts/revenue of           8,465          213,786            25.3              85     13,376,338,000       1,580,194            0.01
 $1,000,000 to $2,499,999...........
Firms with sales/receipts/revenue of           4,302          209,778            48.8              85     14,792,101,000       3,438,424            0.00
 $2,500,000 to $4,999,999...........
Firms with sales/receipts/revenue of           1,588          117,648            74.1              85      9,314,307,000       5,865,433            0.00
 $5,000,000 to $7,499,999...........
Firms with sales/receipts/revenue of             888           83,741            94.3              85      7,129,969,000       8,029,244            0.00
 $7,500,000 to $9,999,999...........
Firms with sales/receipts/revenue of           1,003          127,781           127.4              85     11,306,008,000      11,272,191            0.00
 $10,000,000 to $14,999,999.........
Firms with sales/receipts/revenue of             461           79,059           171.5              85      6,983,007,000      15,147,521            0.00
 $15,000,000 to $19,999,999.........

[[Page 54968]]

 
Firms with sales/receipts/revenue of             355           73,045           205.8              85      6,992,060,000      19,695,944            0.00
 $20,000,000 to $24,999,999.........
Firms with sales/receipts/revenue of             268           70,191           261.9              85      6,343,422,000      23,669,485            0.00
 $25,000,000 to $29,999,999.........
Firms with sales/receipts/revenue of             172           60,202           350.0              85      5,119,182,000      29,762,686            0.00
 $30,000,000 to $34,999,999.........
Firms with sales/receipts/revenue of             138           55,753           404.0              85      4,536,897,000      32,876,065            0.00
 $35,000,000 to $39,999,999.........
--------------------------------------------------------------------------------------------------------------------------------------------------------


 Table 18--Cost per Small Firm in the Health Care and Social Assistance Industry the SBA Small Business Size Standard for This Industry Is $7.5 Million-
                                                                      $38.5 Million
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Health care and social assistance industry
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Annual cost
                                                                           Average                                            Average       per firm as
                                         Number of      Total number      number of      Annual cost    Annual receipts    receipts  per    percent of
                                           firms        of employees   employees  per     per firm                             firm          receipts
                                                                            firm                                                             (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firms with sales/receipts/revenue            107,112          162,265             1.5             $85     $5,064,756,000         $47,285            0.18
 below $100,000.....................
Firms with sales/receipts/revenue of         242,566        1,027,234             4.2              85     66,168,531,000         272,786            0.03
 $100,000 to $499,999...............
Firms with sales/receipts/revenue of         125,095        1,054,985             8.4              85     88,227,442,000         705,284            0.01
 $500,000 to $999,999...............
Firms with sales/receipts/revenue of          84,361        1,466,391            17.4              85    126,989,626,000       1,505,312            0.01
 $1,000,000 to $2,499,999...........
Firms with sales/receipts/revenue of          26,466        1,107,445            41.8              85     91,034,690,000       3,439,685            0.00
 $2,500,000 to $4,999,999...........
Firms with sales/receipts/revenue of           9,453          712,840            75.4              85     56,541,818,000       5,981,362            0.00
 $5,000,000 to $7,499,999...........
Firms with sales/receipts/revenue of           4,867          501,258           103.0              85     41,063,966,000       8,437,223            0.00
 $7,500,000 to $9,999,999...........
Firms with sales/receipts/revenue of           5,198          760,603           146.3              85     61,116,459,000      11,757,687            0.00
 $10,000,000 to $14,999,999.........
Firms with sales/receipts/revenue of           2,468          497,184           201.5              85     40,851,963,000      16,552,659            0.00
 $15,000,000 to $19,999,999.........

[[Page 54969]]

 
Firms with sales/receipts/revenue of           1,374          347,358           252.8              85     29,140,498,000      21,208,514            0.00
 $20,000,000 to $24,999,999.........
Firms with sales/receipts/revenue of             978          284,827           291.2              85     25,026,728,000      25,589,701            0.00
 $25,000,000 to $29,999,999.........
Firms with sales/receipts/revenue of             665          230,360           346.4              85     20,167,268,000      30,326,719            0.00
 $30,000,000 to $34,999,999.........
Firms with sales/receipts/revenue of             485          185,982           383.5              85     16,744,181,000      34,524,085            0.00
 $35,000,000 to $39,999,999.........
--------------------------------------------------------------------------------------------------------------------------------------------------------


Table 19--Cost per Small Firm in the Arts, Entertainment, and Recreation Industry the SBA Small Business Size Standard for This Industry Is $7.5 Million-
                                                                      $38.5 Million
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      Arts, entertainment, and recreation industry
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Annual cost
                                                                           Average                                            Average       per firm as
                                         Number of      Total number      number of      Annual cost    Annual receipts    receipts  per    percent of
                                           firms        of employees   employees  per     per firm                             firm          receipts
                                                                            firm                                                             (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firms with sales/receipts/revenue             33,186           53,994             1.6             $85     $1,569,733,000         $47,301            0.18
 below $100,000.....................
Firms with sales/receipts/revenue of          46,210          199,647             4.3              85     11,295,277,000         244,434            0.03
 $100,000 to $499,999...............
Firms with sales/receipts/revenue of          15,493          162,642            10.5              85     10,894,947,000         703,217            0.01
 $500,000 to $999,999...............
Firms with sales/receipts/revenue of          12,148          259,480            21.4              85     18,531,141,000       1,525,448            0.01
 $1,000,000 to $2,499,999...........
Firms with sales/receipts/revenue of           4,674          209,762            44.9              85     16,040,448,000       3,431,846            0.00
 $2,500,000 to $4,999,999...........
Firms with sales/receipts/revenue of           1,718          120,586            70.2              85      9,983,571,000       5,811,159            0.00
 $5,000,000 to $7,499,999...........
Firms with sales/receipts/revenue of             806           74,628            92.6              85      6,466,756,000       8,023,270            0.00
 $7,500,000 to $9,999,999...........
Firms with sales/receipts/revenue of             660           77,131           116.9              85      7,102,423,000      10,761,247            0.00
 $10,000,000 to $14,999,999.........
Firms with sales/receipts/revenue of             344           49,061           142.6              85      4,965,644,000      14,435,012            0.00
 $15,000,000 to $19,999,999.........

[[Page 54970]]

 
Firms with sales/receipts/revenue of             224           40,309           180.0              85      4,136,002,000      18,464,295            0.00
 $20,000,000 to $24,999,999.........
Firms with sales/receipts/revenue of             155           33,220           214.3              85      3,428,904,000      22,121,961            0.00
 $25,000,000 to $29,999,999.........
Firms with sales/receipts/revenue of             115           28,855           250.9              85      2,873,044,000      24,982,991            0.00
 $30,000,000 to $34,999,999.........
Firms with sales/receipts/revenue of              84           25,163           299.6              85      2,569,574,000      30,590,167            0.00
 $35,000,000 to $39,999,999.........
--------------------------------------------------------------------------------------------------------------------------------------------------------


  Table 20--Cost per Small Firm in the Accommodation and Food Services Industry the SBA Small Business Size Standard for This Industry Is $7.5 Million-
                                                                      $38.5 Million
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Accommodation and food services industry
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Annual cost
                                                                           Average                                            Average       per firm as
                                         Number of      Total number      number of      Annual cost    Annual receipts    receipts  per    percent of
                                           firms        of employees   employees  per     per firm                             firm          receipts
                                                                            firm                                                             (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firms with sales/receipts/revenue             99,592          207,093             2.1             $85     $4,845,922,000         $48,658            0.17
 below $100,000.....................
Firms with sales/receipts/revenue of         216,446        1,349,187             6.2              85     55,536,558,000         256,584            0.03
 $100,000 to $499,999...............
Firms with sales/receipts/revenue of          79,875        1,260,097            15.8              85     55,913,962,000         700,018            0.01
 $500,000 to $999,999...............
Firms with sales/receipts/revenue of          56,476        1,777,649            31.5              85     84,117,236,000       1,489,433            0.01
 $1,000,000 to $2,499,999...........
Firms with sales/receipts/revenue of          14,095          896,373            63.6              85     46,231,300,000       3,279,979            0.00
 $2,500,000 to $4,999,999...........
Firms with sales/receipts/revenue of           3,720          403,866           108.6              85     21,249,810,000       5,712,315            0.00
 $5,000,000 to $7,499,999...........
Firms with sales/receipts/revenue of           1,621          244,772           151.0              85     12,835,230,000       7,918,094            0.00
 $7,500,000 to $9,999,999...........
Firms with sales/receipts/revenue of           1,628          340,741           209.3              85     17,984,834,000      11,047,195            0.00
 $10,000,000 to $14,999,999.........
Firms with sales/receipts/revenue of             859          252,279           293.7              85     13,054,878,000      15,197,763            0.00
 $15,000,000 to $19,999,999.........

[[Page 54971]]

 
Firms with sales/receipts/revenue of             446          170,201           381.6              85      8,420,579,000      18,880,222            0.00
 $20,000,000 to $24,999,999.........
Firms with sales/receipts/revenue of             363          153,594           423.1              85      7,987,110,000      22,003,058            0.00
 $25,000,000 to $29,999,999.........
Firms with sales/receipts/revenue of             241          115,452           479.1              85      6,405,041,000      26,576,934            0.00
 $30,000,000 to $34,999,999.........
Firms with sales/receipts/revenue of             170           90,301           531.2              85      4,832,335,000      28,425,500            0.00
 $35,000,000 to $39,999,999.........
--------------------------------------------------------------------------------------------------------------------------------------------------------


  Table 21--Cost per Small Firm in the Other Services (Except Public Administration) Industry the SBA Small Business Size Standard for This Industry Is
                                                               $5.5 Million-$38.5 Million
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Other services industry
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Annual cost
                                                                           Average                                            Average       per firm as
                                         Number of      Total number      number of      Annual cost    Annual receipts    receipts  per    percent of
                                           firms        of employees   employees  per     per firm                             firm          receipts
                                                                            firm                                                             (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Firms with sales receipts/revenue            195,234          322,002             1.6             $85     $9,308,948,000         $47,681            0.18
 below $100,000.....................
Firms with sales receipts/revenue of         307,613        1,225,144             4.0              85     75,113,021,000         244,180            0.03
 $100,000 to $499,999...............
Firms with sales receipts/revenue of          87,833          756,786             8.6              85     61,131,552,000         695,998            0.01
 $500,000 to $999,999...............
Firms with sales receipts/revenue of          55,883          926,035            16.6              85      4,065,314,000       1,504,309            0.01
 $1,000,000 to $2,499,999...........
Firms with sales receipts/revenue of          16,522          531,104            32.1              85     55,620,907,000       3,366,475            0.00
 $2,500,000 to $4,999,999...........
Firms with sales receipts/revenue of           4,967          252,838            50.9              85     28,838,406,000       5,806,001            0.00
 $5,000,000 to $7,499,999...........
Firms with sales receipts/revenue of           2,326          151,376            65.1              85     18,502,407,000       7,954,603            0.00
 $7,500,000 to $9,999,999...........
Firms with sales receipts/revenue of           2,114          173,393            82.0              85     23,140,184,000      10,946,161            0.00
 $10,000,000 to $14,999,999.........
Firms with sales receipts/revenue of           1,005          104,997           104.5              85     14,696,909,000      14,623,790            0.00
 $15,000,000 to $19,999,999.........

[[Page 54972]]

 
Firms with sales receipts/revenue of             620           73,209           118.1              85     11,076,548,400      17,865,400            0.00
 $20,000,000 to $24,999,999.........
Firms with sales receipts/revenue of             405           50,974           125.9              85      8,159,095,000      20,145,914            0.00
 $25,000,000 to $29,999,999.........
Firms with sales receipts/revenue of             274           42,041           153.4              85      6,643,223,000      24,245,339            0.00
 $30,000,000 to $34,999,999.........
Firms with sales receipts/revenue of             227           37,259           164.1              85      5,392,740,000      23,756,564            0.00
 $35,000,000 to $39,999,999.........
--------------------------------------------------------------------------------------------------------------------------------------------------------

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq., 
and its attendant regulations, 5 CFR part 1320, requires that OFCCP 
consider the impact of paperwork and other information collection 
burdens imposed on the public. Under the PRA an agency may not collect 
or sponsor the collection of information, nor may impose an information 
collection requirement unless it displays a currently valid Office of 
Management and Budget (OMB) control number. See 5 CFR 1320.8(b)(3)(vi). 
The OMB has assigned control number 1250-0008 to the third party 
disclosure of the equal opportunity clause provisions to 
subcontractors. The OMB has assigned control numbers 1250-0001 and 
1250-0003 to the general recordkeeping provisions of the laws 
administered by OFCCP. In accordance with the PRA, OFCCP solicited 
public comments on the proposed changes to the information collection 
proposed in the NPRM, as discussed below. See 79 FR 55712 (September 
17, 2014). OFCCP also submitted a contemporaneous request for OMB 
review of the proposed information collection in accordance with 44 
U.S.C. 3507(d). On December 5, 2014, the OMB issued a notice that 
instructed the agency to resubmit the information collection request 
upon promulgation of the final rule and after consideration of public 
comments received.
Compliance Date
    Affected parties do not have to comply with the new information 
collection requirements under Sec.  60-1.35 until the Department 
publishes a Notice in the Federal Register stating that OMB has 
approved the information collections under the Paperwork Reduction Act 
of 1995 (PRA), 44 U.S.C. 3501 et seq., or until this rule otherwise 
takes effect, whichever is later.
Circumstances Necessitating Collection
    Executive Order 13665 amends the equal opportunity clause provided 
in Executive Order 11246 by adding the prohibition that Federal 
contractors may not discriminate against employees and job applicants 
who inquire about, discuss or disclose their own compensation or the 
compensation of other employees or applicants. Federal contractors are 
required to amend the equal opportunity clauses incorporated into their 
subcontracts, and notify job applicants and employees of the 
requirement. Executive Order 13665 became effective at signing and 
applies to contracts entered into on or after the effective date of 
this final rule.
    The final rule contains several provisions that could be considered 
``collections of information'' as defined by the PRA: The amendment to 
the equal opportunity clause incorporated into contracts and 
subcontracts, and the notification given to employees and job 
applicants.
    Proposed Sec.  60-1.35(c)(i) and (ii) required the incorporation of 
the new provision verbatim into existing handbooks and manuals, and the 
dissemination of a notification to employees and applications. The 
disclosure of information originally supplied by the Federal government 
to the recipient for the purpose of disclosure is not included within 
the PRA's definition of ``collection of information.'' See 5 CFR 
1320.3(c)(2). OFCCP determined that proposed Sec.  60-1.35(c)(i) and 
(ii) did not meet the PRA's definition of ``collection of information'' 
and therefore these provisions are not subject to the PRA's 
requirements. However, OFCCP determined that the proposed changes to 
Sec.  60-1.4 could be considered information collections, therefore an 
information collection request (ICR) was submitted to OMB for PRA 
authorization.
Information and Technology
    Each contractor determines its own methods for developing and 
maintaining information, including creating electronic templates. 
Contractors may meet the requirements of this rule using paper or 
electronic means.
Public Comments
    OFCCP sought public comments regarding the potential burdens 
imposed by information collections contained in the NPRM which 
reflected burden related to the amendment to the equal opportunity 
clause incorporated into contracts and subcontracts.
    OFCCP received 11 comments regarding costs and burdens from 
employer groups, women's groups, employers and individuals. Of the 11 
comments, one stated that the new rule should not incur any significant 
cost as the language will be prescribed by OFCCP and that the rule 
eliminates a

[[Page 54973]]

policy of taking adverse action against employees.
    Some of the commenters indicated that the rule was unduly 
burdensome or unnecessary because it had no clear effect on addressing 
the pay gap. Some of these commenters indicated that the pay gap could 
be explained by other nondiscriminatory explanations. OFCCP disagrees 
that the rule is unnecessary and unduly burdensome. OFCCP worked with 
several other Federal agencies on the National Equal Pay Task Force to 
identify the persistent challenges to equal pay enforcement and to 
develop an action plan for implementing recommendations to resolve 
those challenges. OFCCP also consulted a number of sources in order to 
assess the need for the rule. For instance, OFCCP reviewed national 
statistics on earnings by gender produced by BLS and the U.S. Census 
Bureau. Those statistics show persistent pay gaps for female and 
minority workers. These well-documented earnings differences based on 
race and sex have not been fully explained by nondiscriminatory factors 
including differences in worker qualifications such as education and 
experience, occupational differences, work schedules or other similar 
factors. Thus, some of the remaining unexplained portion of the pay gap 
may be attributable to discrimination. In addition, prohibiting pay 
secrecy policies will enhance the ability of Federal contractors and 
their employees to detect and remediate unlawful discriminatory 
practices. Thus, the rule improves the efficacy of Executive Order 
11246 and the efficiency of the market in Federal contracting. In order 
to reduce the burden of implementing Executive Order 13665, OFCCP 
allows contractors to incorporate the equal opportunity clause by 
reference into its subcontracts. In addition, OFCCP is providing 
specific language for incorporation into handbooks and the notice for 
applicants and employees. Thus, OFCCP has proposed the most efficient 
manner to implement the amendments.
    Other commenters asserted that OFCCP underestimated the burdens 
created by the new rule. In this area, one commenter proposed 
alternative calculations related to the implementation of the rule. In 
considering the alternative calculations of burden, OFCCP took into 
consideration that although the commenter represents a segment of the 
contractor universe, it is not reflective of the entire SAM contractor 
universe. OFCCP expects the costs to vary by contractor. While some 
contractors may incur more costs, others will likely incur less. Thus, 
the estimates of burden reflect an average estimate for all covered 
contractors in the SAM contractor universe. Therefore, OFCCP has 
retained its calculation of the burden as proposed in the NPRM. Another 
commenter indicated that OFCCP did not include burdens associated with 
the definition of compensation and the impact that the definition 
proposed in the NPRM may have on Federal contractors. The commenter 
indicated that OFCCP should take the burden that the compensation 
definition ``will impose on annual evaluations under contractors' 
identification of problem areas section of their affirmative action 
programs.'' OFCCP disagrees with this commenter's assertion. 
Contractors are required to perform an in-depth analysis of its total 
employment process to determine whether and where impediments to equal 
employment opportunity exist. See 41 CFR 60-2.17(b). The evaluation 
includes an analysis of each contractor's compensation system. OFCCP's 
guidance and regulations have historically included salary, wages, 
overtime pay, shift differentials, bonuses, commissions, vacation and 
holiday pay, allowances, insurance and other benefits, stock options, 
profit sharing and retirement.\100\ Thus, OFCCP did not assess 
additional burden as this obligation has not changed. Another commenter 
asserted that OFCCP did not assess the additional burden associated 
with data requests received during compliance evaluations. The 
collection of information during an investigation or the conduct of a 
civil action is an exception within the PRA's definition of collection 
of information. See 5 CFR 1320.4(a)(2).
---------------------------------------------------------------------------

    \100\ Federal Contract Compliance Manual, Chapter 2, Section 
2L03 and Chapter 3, section 3H03 (Oct. 2014).
---------------------------------------------------------------------------

    One commenter suggested that OFCCP allow contractors discretion 
regarding the wording of the notice for incorporation in the handbook 
and posting. In order to reduce burden, OFCCP provides the wording for 
the notification. As the majority of comments received related to 
burden were opposed to increasing burden, OFCCP declines to increase 
burden and instead will provide the exact wording for the notice and 
language to incorporate into existing employee handbooks.
    OFCCP has resubmitted the revised information collection (1250-
0008) to OMB for approval, and OFCCP intends to publish a notice 
announcing OMB's decision regarding this information collection 
request. A copy of the information collection request can be obtained 
by contacting OFCCP as shown in the FOR FURTHER INFORMATION CONTACT 
section of this preamble.
    Comments to the OMB should be directed to: Office of Information 
and Regulatory Affairs, Attention OMB Desk Officer for the Office of 
Federal Contract Compliance, Office of Management and Budget, Room 
10235, Washington, DC 20503; Telephone: 202-395-7316 (these are not 
toll-free numbers). Comments can be submitted to OMB by email at 
[email protected]. The OMB will consider all written comments 
it receives within 30 days of publication of this final rule. The OMB 
and the Department are particularly interested in comments that:
     Evaluate whether the proposed collections of information 
are necessary for the proper performance of the functions of the 
agency, including whether the information will have practical utility;
     Evaluate the accuracy of the agency's estimate of the 
burden of the proposed collection of information, including the 
validity of the methodology and assumptions used;
     Enhance the quality, utility, and clarity of the 
information to be collected; and
     Minimize the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of IT (e.g., permitting electronic submission 
of responses).
Number of Respondents
    All nonexempt Federal contractors with contracts, subcontracts, 
federally assisted construction contracts or subcontracts in excess of 
$10,000 are required to comply with this final rule. There are 
approximately 500,000 contractor firms registered in the General 
Service Administration's SAM. Therefore, OFCCP estimates there are 
500,000 contractor firms.
Summary of Paperwork Burdens
    The estimated total annual burden for complying with the new 
regulatory requirement is listed in Table 22, below. The burden is 
calculated as an annual burden based on a three-year approval of this 
information collection request. OFCCP believes that in the first year 
of implementation contractors will modify their equal opportunity 
clauses. Additionally, OFCCP estimates that in subsequent years 1 
percent of the contractors will be required to modify

[[Page 54974]]

their equal opportunity clauses, as they will be new contractors.

       Table 22--Estimated Annual Burden for Contractor Companies
------------------------------------------------------------------------
                                             Estimated
             New requirement               annual burden   Monetization
                                               hours
------------------------------------------------------------------------
Sec.   60-1.4...........................          42,500     $ 1,320,369
    Total Cost..........................          42,500      $1,320,369
------------------------------------------------------------------------

    These paperwork burden estimates are summarized as follows:
    Type of Review: New collection.
    Agency: Office of Federal Contract Compliance Programs, Department 
of Labor.
    Title: Prohibitions Against Pay Secrecy Policies and Actions.
    OMB ICR Reference Number: 1250-0008.
    Affected Public: Business or other for-profit; individuals.
    Estimated Number of Annual Responses: 500,000.
    Frequency of Response: On occasion.
    Estimated Total Annual Burden Hours: 42,500.
    Estimated Total Annual PRA Costs: $0.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by section 804 of the 
Small Business Regulatory Enforcement Fairness Act of 1996. This rule 
will not result in an annual effect on the economy of $100 million or 
more; a major increase in costs or prices; or significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or on the ability of the United States-based companies to 
compete with foreign-based companies in domestic and export markets.

Unfunded Mandates Reform Act of 1995

    For purposes of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 
1532, this rule does not include any Federal mandate that may result in 
excess of $100 million in expenditures by state, local, and tribal 
governments in the aggregate or by the private sector.

Executive Order 13132 (Federalism)

    OFCCP has reviewed this rule in accordance with Executive Order 
13132 regarding federalism, and has determined that it does not have 
``federalism implications.'' This rule will not ``have substantial 
direct effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.''

Executive Order 13175 (Consultation and Coordination With Indian Tribal 
Governments)

    This rule does not have tribal implications under Executive Order 
13175 that requires a tribal summary impact statement. The rule does 
not have substantial direct effects on one or more Indian tribes, on 
the relationship between the Federal Government and Indian tribes or on 
the distribution of power and responsibilities between the Federal 
Government and Indian tribes.

Effects on Families

    The undersigned hereby certifies that the rule would not adversely 
affect the well-being of families, as discussed under section 654 of 
the Treasury and General Government Appropriations Act, 1999.

Executive Order 13045 (Protection of Children)

    This rule would have no environmental health risk or safety risk 
that may disproportionately affect children.

Environmental Impact Assessment

    A review of this rule in accordance with the requirements of the 
National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et 
seq.; the regulations of the Council on Environmental Quality, 40 CFR 
part 1500 et seq.; and DOL NEPA procedures, 29 CFR part 11, indicates 
the rule would not have a significant impact on the quality of the 
human environment. There is, thus, no corresponding environmental 
assessment or an environmental impact statement.

Executive Order 13211 (Energy Supply)

    This rule is not subject to Executive Order 13211. It will not have 
a significant adverse effect on the supply, distribution, or use of 
energy.

Executive Order 12630 (Constitutionally Protected Property Rights)

    This rule is not subject to Executive Order 12630 because it does 
not involve implementation of a policy that has takings implications or 
that could impose limitations on private property use.

Executive Order 12988 (Civil Justice Reform Analysis)

    This rule was drafted and reviewed in accordance with Executive 
Order 12988 and will not unduly burden the Federal court system. The 
rule was: (1) reviewed to eliminate drafting errors and ambiguities; 
(2) written to minimize litigation; and (3) written to provide a clear 
legal standard for affected conduct and to promote burden reduction.

List of Subjects in 41 CFR Part 60-1

    Civil rights, Employment, Equal employment opportunity, Government 
contracts, Government procurement, Investigations, Labor, Reporting and 
recordkeeping requirements.

Patricia A. Shiu,
Director, Office of Federal Contract Compliance Programs.

    Accordingly, part 60-1 of title 41 of the Code of Federal 
Regulations is amended as follows:

PART 60-1--OBLIGATIONS OF CONTRACTORS AND SUBCONTRACTORS

0
1. The authority citation for part 60-1 continues to read as follows:

    Authority: Sec. 201, E.O. 11246, 30 FR 12319, 3 CFR, 1964-1965 
Comp., p. 339, as amended by E.O. 11375, 32 FR 14303, 3 CFR, 1966-
1970 Comp., p. 684, E.O. 12086, 43 FR 46501, 1978 Comp., p. 230 and 
E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258, E.O. 13665, 79 
FR 20749 and E.O. 13672, 79 FR 42971.


0
2. Section 60-1.3 is amended by adding definitions in alphabetical 
order for ``Compensation,'' ``Compensation information,'' and 
``Essential job functions'' to read as follows:


Sec.  60-1.3  Definitions.

* * * * *
    Compensation means any payments made to, or on behalf of, an 
employee or offered to an applicant as remuneration for employment, 
including but not limited to salary, wages, overtime pay, shift 
differentials, bonuses, commissions, vacation and holiday pay, 
allowances, insurance and other benefits, stock options and awards, 
profit sharing, and retirement.
    Compensation information means the amount and type of compensation 
provided to employees or offered to applicants, including, but not 
limited to, the desire of the contractor to attract and retain a 
particular employee for the value the employee is perceived to add to 
the contractor's profit or productivity; the availability of employees 
with like skills in the marketplace; market research about the worth of 
similar jobs in the relevant marketplace; job analysis, descriptions, 
and evaluations; salary and pay structures; salary surveys; labor union 
agreements; and contractor decisions, statements and

[[Page 54975]]

policies related to setting or altering employee compensation.
* * * * *
    Essential job functions--(1) In general. The term essential job 
functions means the fundamental job duties of the employment position 
an individual holds.
    (2) A job function may be considered essential if:
    (i) The access to compensation information is necessary in order to 
perform that function or another routinely assigned business task; or
    (ii) The function or duties of the position include protecting and 
maintaining the privacy of employee personnel records, including 
compensation information.
    (3) The application or interpretation of the ``essential job 
functions'' definition in this part is limited to the discrimination 
claims governed by Executive Order 13665 and its implementing 
regulations.
* * * * *

0
3. Section 60-1.4 is revised to read as follows:


Sec.  60-1.4  Equal opportunity clause.

    (a) Government contracts. Except as otherwise provided, each 
contracting agency shall include the following equal opportunity clause 
contained in section 202 of the order in each of its Government 
contracts (and modifications thereof if not included in the original 
contract):
    During the performance of this contract, the contractor agrees as 
follows:
    (1) The contractor will not discriminate against any employee or 
applicant for employment because of race, color, religion, sex, sexual 
orientation, gender identity, or national origin. The contractor will 
take affirmative action to ensure that applicants are employed, and 
that employees are treated during employment, without regard to their 
race, color, religion, sex, sexual orientation, gender identity, or 
national origin. Such action shall include, but not be limited to the 
following: Employment, upgrading, demotion, or transfer, recruitment or 
recruitment advertising; layoff or termination; rates of pay or other 
forms of compensation; and selection for training, including 
apprenticeship. The contractor agrees to post in conspicuous places, 
available to employees and applicants for employment, notices to be 
provided by the contracting officer setting forth the provisions of 
this nondiscrimination clause.
    (2) The contractor will, in all solicitations or advertisements for 
employees placed by or on behalf of the contractor, state that all 
qualified applicants will receive consideration for employment without 
regard to race, color, religion, sex, sexual orientation, gender 
identity, or national origin.
    (3) The contractor will not discharge or in any other manner 
discriminate against any employee or applicant for employment because 
such employee or applicant has inquired about, discussed, or disclosed 
the compensation of the employee or applicant or another employee or 
applicant. This provision shall not apply to instances in which an 
employee who has access to the compensation information of other 
employees or applicants as a part of such employee's essential job 
functions discloses the compensation of such other employees or 
applicants to individuals who do not otherwise have access to such 
information, unless such disclosure is in response to a formal 
complaint or charge, in furtherance of an investigation, proceeding, 
hearing, or action, including an investigation conducted by the 
employer, or is consistent with the contractor's legal duty to furnish 
information.
    (4) The contractor will send to each labor union or representative 
of workers with which it has a collective bargaining agreement or other 
contract or understanding, a notice to be provided by the agency 
contracting officer, advising the labor union or workers' 
representative of the contractor's commitments under section 202 of 
Executive Order 11246 of September 24, 1965, and shall post copies of 
the notice in conspicuous places available to employees and applicants 
for employment.
    (5) The contractor will comply with all provisions of Executive 
Order 11246 of September 24, 1965, and of the rules, regulations, and 
relevant orders of the Secretary of Labor.
    (6) The contractor will furnish all information and reports 
required by Executive Order 11246 of September 24, 1965, and by the 
rules, regulations, and orders of the Secretary of Labor, or pursuant 
thereto, and will permit access to his books, records, and accounts by 
the contracting agency and the Secretary of Labor for purposes of 
investigation to ascertain compliance with such rules, regulations, and 
orders.
    (7) In the event of the contractor's non-compliance with the 
nondiscrimination clauses of this contract or with any of such rules, 
regulations, or orders, this contract may be canceled, terminated or 
suspended in whole or in part and the contractor may be declared 
ineligible for further Government contracts in accordance with 
procedures authorized in Executive Order 11246 of September 24, 1965, 
and such other sanctions may be imposed and remedies invoked as 
provided in Executive Order 11246 of September 24, 1965, or by rule, 
regulation, or order of the Secretary of Labor, or as otherwise 
provided by law.
    (8) The contractor will include the provisions of paragraphs (1) 
through (8) in every subcontract or purchase order unless exempted by 
rules, regulations, or orders of the Secretary of Labor issued pursuant 
to section 204 of Executive Order 11246 of September 24, 1965, so that 
such provisions will be binding upon each subcontractor or vendor. The 
contractor will take such action with respect to any subcontract or 
purchase order as may be directed by the Secretary of Labor as a means 
of enforcing such provisions including sanctions for noncompliance: 
Provided, however, that in the event the contractor becomes involved 
in, or is threatened with, litigation with a subcontractor or vendor as 
a result of such direction, the contractor may request the United 
States to enter into such litigation to protect the interests of the 
United States.
    (b) Federally assisted construction contracts. (1) Except as 
otherwise provided, each administering agency shall require the 
inclusion of the following language as a condition of any grant, 
contract, loan, insurance, or guarantee involving federally assisted 
construction which is not exempt from the requirements of the equal 
opportunity clause:
    The applicant hereby agrees that it will incorporate or cause to be 
incorporated into any contract for construction work, or modification 
thereof, as defined in the regulations of the Secretary of Labor at 41 
CFR Chapter 60, which is paid for in whole or in part with funds 
obtained from the Federal Government or borrowed on the credit of the 
Federal Government pursuant to a grant, contract, loan, insurance, or 
guarantee, or undertaken pursuant to any Federal program involving such 
grant, contract, loan, insurance, or guarantee, the following equal 
opportunity clause:
    During the performance of this contract, the contractor agrees as 
follows:
    (1) The contractor will not discriminate against any employee or 
applicant for employment because of race, color, religion, sex, sexual 
orientation, gender identity, or national origin. The contractor will 
take affirmative action to ensure that applicants are employed, and 
that employees are treated during employment without regard to their

[[Page 54976]]

race, color, religion, sex, sexual orientation, gender identity, or 
national origin. Such action shall include, but not be limited to the 
following:
    Employment, upgrading, demotion, or transfer; recruitment or 
recruitment advertising; layoff or termination; rates of pay or other 
forms of compensation; and selection for training, including 
apprenticeship. The contractor agrees to post in conspicuous places, 
available to employees and applicants for employment, notices to be 
provided setting forth the provisions of this nondiscrimination clause.
    (2) The contractor will, in all solicitations or advertisements for 
employees placed by or on behalf of the contractor, state that all 
qualified applicants will receive consideration for employment without 
regard to race, color, religion, sex, sexual orientation, gender 
identity, or national origin.
    (3) The contractor will not discharge or in any other manner 
discriminate against any employee or applicant for employment because 
such employee or applicant has inquired about, discussed, or disclosed 
the compensation of the employee or applicant or another employee or 
applicant. This provision shall not apply to instances in which an 
employee who has access to the compensation information of other 
employees or applicants as a part of such employee's essential job 
functions discloses the compensation of such other employees or 
applicants to individuals who do not otherwise have access to such 
information, unless such disclosure is in response to a formal 
complaint or charge, in furtherance of an investigation, proceeding, 
hearing, or action, including an investigation conducted by the 
employer, or is consistent with the contractor's legal duty to furnish 
information.
    (4) The contractor will send to each labor union or representative 
of workers with which he has a collective bargaining agreement or other 
contract or understanding, a notice to be provided advising the said 
labor union or workers' representatives of the contractor's commitments 
under this section, and shall post copies of the notice in conspicuous 
places available to employees and applicants for employment.
    (5) The contractor will comply with all provisions of Executive 
Order 11246 of September 24, 1965, and of the rules, regulations, and 
relevant orders of the Secretary of Labor.
    (6) The contractor will furnish all information and reports 
required by Executive Order 11246 of September 24, 1965, and by rules, 
regulations, and orders of the Secretary of Labor, or pursuant thereto, 
and will permit access to his books, records, and accounts by the 
administering agency and the Secretary of Labor for purposes of 
investigation to ascertain compliance with such rules, regulations, and 
orders.
    (7) In the event of the contractor's noncompliance with the 
nondiscrimination clauses of this contract or with any of the said 
rules, regulations, or orders, this contract may be canceled, 
terminated, or suspended in whole or in part and the contractor may be 
declared ineligible for further Government contracts or federally 
assisted construction contracts in accordance with procedures 
authorized in Executive Order 11246 of September 24, 1965, and such 
other sanctions may be imposed and remedies invoked as provided in 
Executive Order 11246 of September 24, 1965, or by rule, regulation, or 
order of the Secretary of Labor, or as otherwise provided by law.
    (8) The contractor will include the portion of the sentence 
immediately preceding paragraph (1) and the provisions of paragraphs 
(1) through (8) in every subcontract or purchase order unless exempted 
by rules, regulations, or orders of the Secretary of Labor issued 
pursuant to section 204 of Executive Order 11246 of September 24, 1965, 
so that such provisions will be binding upon each subcontractor or 
vendor. The contractor will take such action with respect to any 
subcontract or purchase order as the administering agency may direct as 
a means of enforcing such provisions, including sanctions for 
noncompliance:
    Provided, however, that in the event a contractor becomes involved 
in, or is threatened with, litigation with a subcontractor or vendor as 
a result of such direction by the administering agency, the contractor 
may request the United States to enter into such litigation to protect 
the interests of the United States.
    The applicant further agrees that it will be bound by the above 
equal opportunity clause with respect to its own employment practices 
when it participates in federally assisted construction work: Provided, 
That if the applicant so participating is a State or local government, 
the above equal opportunity clause is not applicable to any agency, 
instrumentality or subdivision of such government which does not 
participate in work on or under the contract.
    The applicant agrees that it will assist and cooperate actively 
with the administering agency and the Secretary of Labor in obtaining 
the compliance of contractors and subcontractors with the equal 
opportunity clause and the rules, regulations, and relevant orders of 
the Secretary of Labor, that it will furnish the administering agency 
and the Secretary of Labor such information as they may require for the 
supervision of such compliance, and that it will otherwise assist the 
administering agency in the discharge of the agency's primary 
responsibility for securing compliance.
    The applicant further agrees that it will refrain from entering 
into any contract or contract modification subject to Executive Order 
11246 of September 24, 1965, with a contractor debarred from, or who 
has not demonstrated eligibility for, Government contracts and 
federally assisted construction contracts pursuant to the Executive 
Order and will carry out such sanctions and penalties for violation of 
the equal opportunity clause as may be imposed upon contractors and 
subcontractors by the administering agency or the Secretary of Labor 
pursuant to Part II, Subpart D of the Executive Order. In addition, the 
applicant agrees that if it fails or refuses to comply with these 
undertakings, the administering agency may take any or all of the 
following actions: Cancel, terminate, or suspend in whole or in part 
this grant (contract, loan, insurance, guarantee); refrain from 
extending any further assistance to the applicant under the program 
with respect to which the failure or refund occurred until satisfactory 
assurance of future compliance has been received from such applicant; 
and refer the case to the Department of Justice for appropriate legal 
proceedings.
    (2) [Reserved]
    (c) Subcontracts. Each nonexempt prime contractor or subcontractor 
shall include the equal opportunity clause in each of its nonexempt 
subcontracts.
    (d) Inclusion of the equal opportunity clause by reference. The 
equal opportunity clause may be included by reference in all Government 
contracts and subcontracts, including Government bills of lading, 
transportation requests, contracts for deposit of Government funds, and 
contracts for issuing and paying U.S. savings bonds and notes, and such 
other contracts and subcontracts as the Director of OFCCP may 
designate.
    (e) Incorporation by operation of the order. By operation of the 
order, the equal opportunity clause shall be considered to be a part of 
every contract and subcontract required by the order and the 
regulations in this part to include such a clause whether or not it is 
physically incorporated in such contracts and whether or not the 
contract between the agency and the contractor is written.

[[Page 54977]]

    (f) Adaptation of language. Such necessary changes in language may 
be made in the equal opportunity clause as shall be appropriate to 
identify properly the parties and their undertakings.

0
4. Section 60-1.35 is added to read as follows:


Sec.  60-1.35  Contractor obligations and defenses to violation of the 
nondiscrimination requirement for compensation disclosures.

    (a) General defenses. A contractor may pursue a defense to an 
alleged violation of paragraph (3) of the equal opportunity clauses 
listed in Sec.  60-1.4(a) and (b) as long as the defense is not based 
on a rule, policy, practice, agreement, or other instrument that 
prohibits employees or applicants from discussing or disclosing their 
compensation or the compensation of other employees or applicants, 
subject to paragraph (3) of the equal opportunity clause. Contractors 
may pursue this defense by demonstrating, for example, that it 
disciplined the employee for violation of a consistently and uniformly 
applied company policy, and that this policy does not prohibit, or tend 
to prohibit, employees or applicants from discussing or disclosing 
their compensation or the compensation of other employees or 
applicants.
    (b) Essential job functions defense. Actions taken by a contractor 
which adversely affect an employee will not be deemed to be 
discriminatory if the employee has access to the compensation 
information of other employees or applicants as part of such employee's 
essential job functions and disclosed the compensation of such other 
employees or applicants to individuals who do not otherwise have access 
to such information, and the disclosure was not in response to a formal 
complaint or charge, in furtherance of an investigation, proceeding, 
hearing, or action, including an investigation conducted by the 
contractor, or is consistent with the contractor's legal duty to 
furnish information.
    (c) Dissemination of nondiscrimination provision. The contractor or 
subcontractor shall disseminate the nondiscrimination provision, using 
the language as prescribed by the Director of OFCCP, to employees and 
applicants:
    (1) The nondiscrimination provision shall be incorporated into 
existing employee manuals or handbooks; and
    (2) The nondiscrimination provision shall be disseminated to 
employees and applicants. Dissemination of the provision shall be 
executed by electronic posting or by posting a copy of the provision in 
conspicuous places available to employees and applicants for 
employment.

[FR Doc. 2015-22547 Filed 9-10-15; 8:45 am]
 BILLING CODE 4510-CM-P