January 30, 2024

Following President Biden’s announcement yesterday, the Federal Acquisition Regulatory (FAR Council) and the Office of Federal Procurement Policy issued a proposed rule to amend the Federal Acquisition Regulation (FAR) to implement a proposed government-wide policy developed by the Administrator for Federal Procurement Policy (OFPP Administrator) that would prohibit federal contractors and subcontractors from seeking and considering information about job applicants’ compensation history when making employment decisions for certain positions.

Specifically, the FAR Council is proposing a government-wide procurement policy that would: (1) prohibit federal contractors and subcontractors from seeking and considering information about job applicants’ compensation history when making employment decisions about personnel working on or in connection with a federal government contract; and (2) require contractors to disclose, in all advertisements for job openings involving work on or in connection with a government contract placed by or on behalf of the contractor or subcontractor, the compensation to be offered to the hired applicant, for any position to perform work on or in connection with the contract. The OFPP Administrator is proposing this policy based on a determination that compensation history bans and compensation disclosure requirements, both together and separately, would promote economy, efficiency, and effectiveness in the procurement of property and services by the federal government.

The proposed rule would establish a new FAR subpart entitled, “Prohibition on Compensation History Inquiries and Requirement for Compensation Disclosures by Contractors.” This new subpart communicates the policy that federal contractors and subcontractors are prohibited from seeking and considering information about job applicants’ compensation history when making employment decisions. The prohibition would apply to the recruitment and hiring for any position to perform work on or in connection with the contract, and applicants are to be provided with notice of this requirement as either part of the announcement or application process. In addition, the proposed new subpart must communicate the policy that contractors and subcontractors are required to disclose in all advertisements for job openings placed by or on behalf of the contractor or subcontractor, for any position to perform work on or in connection with the contract, the compensation to be offered to the hired applicant. This new subpart is proposed to be included in all solicitations and contracts where the principal place of performance will be in the United States and its outlying areas. The proposed policy provides that an applicant for a position covered by the proposed policy may submit a complaint relating to the contractor’s noncompliance with the clause within 180 days of the date on which the violation occurred to a central collection point of the agency that issued the solicitation or awarded the contract or order.

Comments are due by April 1, 2024 and can be submitted through the federal eRulemaking portal using “FAR Case 2023-021.”

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