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Do Obama's Executive Orders on Wages Affect You?

By Jenny Tsay, Esq. on April 08, 2014 | Last updated on March 21, 2019

President Barack Obama signed two executive orders Tuesday to require federal contractors to let their workers to discuss wages more openly and to require contractors to submit detailed data to the government about how they compensate workers.

The purpose of the executive orders, which the president signed on National Equal Pay Day, is to try and bridge the wage gap between men and women, according to The Washington Post.

So what do the orders mean for your business?

No Retaliation for Discussing Salaries

First, keep in mind that the two executive orders President Obama signed today apply only to federal contractors. But they're significant because federal contractors comprise nearly one-fourth of the U.S. workforce, according to The Associated Press.

The first executive order prohibits federal contractors from retaliating against workers who discuss their salaries with coworkers, The Post reports.

So if your business is a federal government contractor, this means that if your workers want to talk about their pay amongst themselves, you can't retaliate against them by:

  • Excluding them from decisions and work activities simply for discussing wages;
  • Turning the worker's colleagues against him; or
  • Abusing them verbally.

Even if you're not a federal contractor, this is a good reminder that employers still need to allow their workers to discuss salaries with their fellow coworkers under the National Labor Relations Act. However, employers can limit the discussion to people inside the company, and may be able to prohibit employees from discussing salaries when they should be working.

Closing the Gender Wage Gap

The second executive memorandum orders federal contractors to file data with the federal government that indicates how they compensate employees based on sex and race, according to the Post. President Obama has said that women earn 77 cents for every dollar men earn, and he hopes the order will help to bridge that gap.

Again, although the president's order only applies to federal contractors, women or men who believe they're getting unequal pay because of their gender, even if they're performing the same job, can still take action under the Equal Pay Act.

So while non-federal contractors technically don't have to comply with President Obama's executive orders on wages, there are other laws in place that affect private employers. If you're confused about how the law applies to your business, it's wise to consult an experienced employment lawyer to get your questions answered.

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