[Federal Register Volume 81, Number 190 (Friday, September 30, 2016)]
[Rules and Regulations]
[Pages 67732-67735]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-23196]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1, 22, and 52
[FAC 2005-91; FAR Case 2016-007; Item III; Docket No. 2016-0007;
Sequence No. 1]
RIN 9000-AN10
Federal Acquisition Regulation: Non-Retaliation for Disclosure of
Compensation Information
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Interim rule.
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SUMMARY: DoD, GSA, and NASA are issuing an interim rule amending the
Federal Acquisition Regulation (FAR) to implement Executive Order
(E.O.), entitled ``Non-Retaliation for Disclosure of Compensation
Information,'' and a final rule issued by the Department of Labor.
DATES: Effective: September 30, 2016.
Applicability Date: This rule applies to solicitations and
contracts issued on or after the effective date of the FAR rule.
Contracting officers are expected to work with their existing
contractors and bilaterally modify their contracts, to the extent
feasible, to include the amended clause at FAR 52.222-26, Equal
Opportunity. See FAR 1.108(d).
Comment Date: Interested parties should submit written comments to
the Regulatory Secretariat Division at one of the addresses shown below
on or before November 29, 2016 to be considered in the formation of the
final rule.
ADDRESSES: Submit comments identified by FAC 2005-91, FAR Case 2016-
007, by any of the following methods:
Regulations.gov: http://www.regulations.gov. Submit
comments via the Federal eRulemaking portal by entering ``FAR Case
2016-007''. Select the link ``Comment Now'' that corresponds with ``FAR
Case 2016-007''. Follow the instructions provided on the screen. Please
include your name, company name (if any), and ``FAR Case 2016-007'' on
your attached document.
Mail: General Services Administration, Regulatory
Secretariat Division (MVCB), ATTN: Ms. Flowers, 1800 F Street NW., 2nd
Floor, Washington, DC 20405-0001.
Instructions: Please submit comments only and cite ``FAR Case 2016-
007'' in all correspondence related to this case. Comments received
generally will be posted without change to http://regulations.gov,
including any personal and/or business confidential information
provided. To confirm receipt of your comment(s), please check
www.regulations.gov, approximately two to three days after submission
to verify posting (except allow 30 days for posting of comments
submitted by mail).
FOR FURTHER INFORMATION CONTACT: Ms. Zenaida Delgado, Procurement
Analyst, at 202-969-7207 for clarification of content. For information
pertaining to status or publication schedules, contact the Regulatory
Secretariat Division at 202-501-4755. Please cite FAC 2005-91, FAR Case
2016-007.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA are issuing an interim rule amending the FAR to
implement Executive Order (E.O.) 13665, entitled ``Non-Retaliation for
Disclosure of Compensation Information.'' The E.O. was signed April 8,
2014, and was published in the Federal Register at 79 FR 20749, on
April 11, 2014. This interim rule is also implementing the final rule
issued by the Office of Federal Contract Compliance Programs (OFCCP) of
the Department of Labor (DOL) to implement E.O. 13665. The DOL final
rule was published in the Federal Register at 80 FR 54934, on September
11, 2015, entitled ``Government Contractors, Prohibitions Against Pay
Secrecy Policies and Actions.'' The DOL rule revises 41 CFR part 60-1.
E.O. 11246, originally issued September 24, 1965, establishes
nondiscrimination and affirmative action obligations in employment for
Federal contractors and subcontractors. It prohibits employment
discrimination because of race, color, religion, sex, sexual
orientation, gender identity, or national origin. E.O. 13665 amends
E.O. 11246 to provide for a uniform policy for the Federal Government
to prohibit Federal contractors from discriminating against employees
and job applicants who inquire about, discuss, or disclose their own
compensation or the compensation of other employees or applicants.
Also, the E.O. indicates that it promotes economy and efficiency in
Federal Government procurement and supports enforcement of
nondiscrimination and equal employment opportunity.
II. Discussion and Analysis
A. The DOL regulation implements E.O. 13665 by revising the equal
opportunity clause to prohibit 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.
B. The FAR implements E.O. 11246 in FAR subpart 22.8, FAR clause
52.222-26, Equal Opportunity, and related clauses. This interim rule
adds the new discrimination prohibition and incorporates the
definitions ``compensation,'' ``compensation information,'' and
``essential job functions'' from the DOL final rule (41 CFR 60-1.3)
within FAR subpart 22.8 and the clauses that are prescribed in FAR
subpart 22.8 as follows:
1. 22.802, General. Inserts the new discrimination prohibition.
2. 52.222-26, Equal Opportunity. Inserts definitions for the terms
``compensation,'' ``compensation information,'' and ``essential job
functions,'' and 52.222-26(c)(5), which prohibits 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. FAR 52.222-26(c)(5) also
requires the contractor to incorporate the new discrimination
prohibition into existing employee manuals or handbooks and to post it.
C. Conforming changes were made in the FAR clauses 52.212-5,
52.213-4, and 52.244-6.
III. Executive Orders 12866 and 13563
E.O.s 12866 and 13563 direct agencies to assess all costs and
benefits of available regulatory alternatives and, if
[[Page 67733]]
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is a significant regulatory action and, therefore, was subject to
review under Section 6(b) of E.O. 12866, Regulatory Planning and
Review, dated September 30, 1993. This interim rule is not a major rule
under 5 U.S.C. 804.
IV. Regulatory Flexibility Act
DoD, GSA, and NASA do not expect this interim rule to have a
significant economic impact on a substantial number of small entities
within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et
seq. However, an initial regulatory flexibility analysis (IRFA) has
been prepared consistent with 5 U.S.C. 603. The analysis is summarized
as follows:
This interim rule is necessary to implement E.O. 13665, Non-
Retaliation for Disclosure of Compensation Information (amending
E.O. 11246, Equal Opportunity in Federal Employment) as implemented
by the final rule issued by the DoL at 41 CFR part 60-1, published
in the Federal Register at 80 FR 54934, on September 11, 2015.
The objective of this rule is to provide for a uniform policy
for the Federal Government to prohibit Federal contractors from
discriminating against employees and job applicants who inquire
about, discuss, or disclose their own compensation or the
compensation of other employees or applicants.
The rule will apply to all entities, both small and other than
small. Based on the most current data available in the System for
Award Management (SAM), there are 328,552 small contractor firms
with fewer than 500 employees and 315,902 small contractor firms
with less than $35.5 million in revenue. Thus, the total number of
small contractor firms that may be impacted by the rule range from
315,902 to 328,552.
Recordkeeping and reporting requirements of the rule involve
regulatory familiarization and administrative costs associated with
incorporating revised language into policies, instructions, notices
to employees, and subcontracts. In implementing the additional
prohibition, the rule requires that contractors and subcontractors
disseminate the nondiscrimination provision, using language
prescribed by the Director of the Office of Federal Contract
Compliance Programs (OFCCP), including incorporating the
nondiscrimination provision into existing employee manuals and
handbooks and posting it electronically or in conspicuous places
available to employees and applicants. An analysis of estimated
costs of the regulatory changes was performed in the DOL final rule
published in the Federal Register at 80 FR 54934, on September 11,
2015. DoL estimated the total cost of their final rule at $85.00 per
company.
The rule does not duplicate, overlap, or conflict with any other
Federal rules.
DoD, GSA, and NASA are not aware of any significant alternatives
to the rule that would accomplish the stated objectives of the E.O.
and the DOL implementing regulations.
It is necessary for the rule to apply to small entities, because
E.O. 11246, as amended, applies when a contractor has contracts or
subcontracts with the Government in any 12-month period which have
an aggregate total value (or can reasonably be expected to have an
aggregate total value) exceeding $10,000 that are not completely
exempted. Every effort has been made to minimize the burdens imposed
on small entities.
The Regulatory Secretariat Division has submitted a copy of the
IRFA to the Chief Counsel for Advocacy of the Small Business
Administration. A copy of the IRFA may be obtained from the Regulatory
Secretariat Division. DoD, GSA, and NASA invite comments from small
business concerns and other interested parties on the expected impact
of this rule on small entities.
DoD, GSA, and NASA will also consider comments from small entities
concerning the existing regulations in subparts affected by the rule in
accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C 610 (FAR Case 2016-007), in
correspondence.
V. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C chapter 35) does apply;
however, the information collection authorization is under the DOL
final rule issued by the Office of Federal Contract Compliance Programs
(OFCCP) of the Department of Labor (DOL), which was published in the
Federal Register at 80 FR 54934, on September 11, 2015, entitled
``Government Contractors, Prohibitions Against Pay Secrecy Policies and
Actions,'' and is assigned OMB Control Number 1250-0008, Prohibitions
Against Pay Secrecy Policies and Actions. This information collection
expires December 31, 2018. The other information collection
requirements cited at 1.106 that apply to FAR clause 52.225-26,
assigned OMB control numbers 1250-0001 and 1250-0003, cover the general
recordkeeping provisions of the laws administered by OFCCP.
VI. Determination To Issue an Interim Rule
A determination has been made under the authority of the Secretary
of Defense (DoD), the Administrator of General Services (GSA), and the
Administrator of the National Aeronautics and Space Administration
(NASA) that urgent and compelling reasons exist to promulgate this
interim rule without prior opportunity for public comment. It is
important that the FAR is immediately revised to include the
requirements of E.O. 13665, entitled ``Non-Retaliation for Disclosure
of Compensation Information'' and the Department of Labor implementing
regulation published in the Federal Register at 80 FR 54934, on
September 11, 2015 that requires the Federal Government to establish a
uniform policy that prohibits Federal contractors from discriminating
against employees and job applicants who inquire about, discuss, or
disclose their own compensation or the compensation of other employees
or applicants. This action is necessary because DOL's final rule became
effective on January 11, 2016, and section 6 of the E.O. expressly
states that the order ``shall apply to contracts entered into on or
after the effective date of rules promulgated by the Department of
Labor.'' Issuance of an interim rule allows for the requirements to be
included in solicitations and contracts immediately and puts
contractors on clear notice of legal responsibilities that are already
in effect. If the FAR rule is not issued as an interim rule, this new
requirement will not be incorporated into contracts, and contractors
will be put at unnecessary risk of non-compliance with the E.O. and
labor rule. More importantly, this may unnecessarily delay action by
contractors in providing the important protections for contractor
employees that the E.O. and labor rule are designed to provide.
However, pursuant to 41 U.S.C. 1707 and FAR 1.501-3(b), DoD, GSA, and
NASA will consider public comments received in response to this interim
rule in the formation of the final rule.
List of Subjects in 48 CFR Parts 1, 22, and 52
Government procurement.
Dated: September 19, 2016.
William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of
Acquisition Policy, Office of Government-wide Policy.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 1, 22, and 52 as
set forth below:
0
1. The authority citation for 48 CFR parts 1, 22, and 52 continues to
read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51
U.S.C. 20113.
[[Page 67734]]
PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM
1.106 [Amended]
0
2. Amend section 1.106 in the table by removing from FAR segment
``52.222-26'' the OMB control number ``1250-0003'' and adding ``1250-
0001, 1250-0003, and 1250-0008'' in its place.
PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
0
3. Amend section 22.802 by revising paragraph (a) to read as follows:
22.802 General.
(a) Executive Order 11246, as amended, sets forth the Equal
Opportunity clause and requires that all agencies--
(1) Include this clause in all nonexempt contracts and subcontracts
(see 22.807); and
(2) Act to ensure compliance with the clause and the regulations of
the Secretary of Labor--
(i) To promote the full realization of equal employment opportunity
for all persons, regardless of race, color, religion, sex, sexual
orientation, gender identity, or national origin; and
(ii) To prohibit contractors from discharging, or in any other
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. This prohibition against discrimination does 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.
* * * * *
0
4. Amend section 22.809 by revising the introductory text to read as
follows:
22.809 Enforcement.
Upon written notification to the contracting officer, the Deputy
Assistant Secretary may direct one or more of the following actions, as
well as administrative sanctions and penalties, be taken against
contractors found to be in violation of E.O. 11246, the regulations of
the Secretary of Labor, or the applicable contract clauses:
* * * * *
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
5. Amend section 52.212-5 by--
0
a. Revising the date of the clause and paragraphs (b)(28) and
(e)(1)(v); and
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b. In Alternate II, revising the date of the alternate and paragraph
(e)(1)(ii)(E).
The revisions read as follows:
52.212-5 Contract Terms and Conditions Required to Implement Statutes
or Executive Orders--Commercial Items.
* * * * *
Contract Terms and Conditions Required to Implement Statutes or
Executive Orders--Commercial Items (Sept 2016)
* * * * *
(b) * * *
__(28) 52.222-26, Equal Opportunity (Sept 2016) (E.O. 11246).
* * * * *
(e)(1) * * *
(v) 52.222-26, Equal Opportunity (Sept 2016) (E.O. 11246).
* * * * *
Alternate II (Sept 2016). * * *
* * * * *
(e)(1) * * *
(ii) * * *
(E) 52.222-26, Equal Opportunity (Sept 2016) (E.O. 11246).
* * * * *
0
6. Amend section 52.213-4 by revising the date of the clause and
paragraphs (a)(1)(iii) and (a)(2)(viii) to read as follows:
52.213-4 Terms and Conditions--Simplified Acquisitions (Other Than
Commercial Items).
* * * * *
Terms and Conditions-Simplified Acquisitions (Other than Commercial
Items) (Sept 2016)
(a) * * *
(1) * * *
(iii) 52.222-26, Equal Opportunity (Sept 2016) (E.O. 11246).
* * * * *
(2) * * *
(viii) 52.244-6, Subcontracts for Commercial Items (Sept 2016).
* * * * *
0
7. Amend section 52.222-26 by--
0
a. Revising the date of the clause;
0
b. Adding to paragraph (a), in alphabetical order, the definitions
``Compensation'', ``Compensation information'', and ``Essential job
functions'';
0
c. Redesignating paragraphs (c)(5) through (11) as paragraphs (c)(6)
through (12), respectively;
0
d. Adding new paragraph (c)(5);
0
e. Removing from newly designated paragraph (c)(12) ``contracting
officer'' and adding ``Director of OFCCP'' in its place; and
0
f. Removing from paragraph (d) ``41 CFR 60-1.1.'' and adding ``41 CFR
part 60-1.'' in its place.
The revision and additions read as follows:
52.222-26 Equal Opportunity.
* * * * *
Equal Opportunity (Sept 2016)
(a) * * *
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 policies related to setting or
altering employee compensation.
Essential job functions means the fundamental job duties of the
employment position an individual holds. A job function may be
considered essential 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.
* * * * *
(c) * * *
(5)(i) The Contractor shall 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 prohibition against discrimination does
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
[[Page 67735]]
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.
(ii) The Contractor shall disseminate the prohibition on
discrimination in paragraph (c)(5)(i) of this clause, using language
prescribed by the Director of the Office of Federal Contract
Compliance Programs (OFCCP), to employees and applicants by--
(A) Incorporation into existing employee manuals or handbooks;
and
(B) Electronic posting or by posting a copy of the provision in
conspicuous places available to employees and applicants for
employment.
* * * * *
0
8. Amend section 52.244-6 by revising the date of the clause and
paragraph (c)(1)(vi) to read as follows:
52.244-6 Subcontracts for Commercial Items.
* * * * *
Subcontracts for Commercial Items (Sept 2016)
* * * * *
(c)(1) * * *
(vi) 52.222-26, Equal Opportunity (Sept 2016) (E.O. 11246).
* * * * *
[FR Doc. 2016-23196 Filed 9-29-16; 8:45 am]
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