The Federal Government, the largest employer in the U.S. wants to ban questions regarding salary history for potential employees in its interview stages, to help reduce gender discrimination amongst employees.
The new regulation would apply to new federal employees in the General Schedule pay system, Prevailing Rate pay system, Administrative Appeals Judge pay system, and Administrative Law Judge pay system.
According to the Forbes gender pay gap report, women earned an average of 17% less than men in 2022, translating to women earning 82 cents for every dollar that a man makes.
As pay for Federal employees is more transparent than those in the private sector, we can see how the gender pay gap plays out for the federal government’s civilian workforce. And in 2022, although the pay gap persists, it was lower than for workers across the rest of the U.S., with a 5.6% gap.
The new proposed regulation was released by the U.S. Office of Personnel Management (OPM) — which is in charge of around 2.2 million federal employees. The change would mean federal agencies would not be permitted to use a candidate's past or current salary to determine pay in interviews for most federal jobs.
Currently, 30 states have imposed a salary history ban according to Paycor, and if the Federal government approves this change it's likely to help close the gender pay gap further. This also ties in with Biden’s 2021 executive order to act on diversity, equity, inclusion, and accessibility in the American workforce.
How Would the Salary History Ban Work?
When a candidate applies for a job in the Federal government, salary bands will play a role in highlighting the pay range of a job, wage increases and promotions.
Before the proposal is finalized, it will go through a 30-day public comment period. Once in full swing, the change will impact around 1.5 million federal employees that work full-time as well as those that are in non-seasonal roles.
After the new rule comes into force, hiring managers will still be able to look at a candidate's qualifications and experience and determine the initial salary offer from that, Rob Shriver, deputy director of OPM told Axios.
Although the proposed change is good news, the number of women in low-paid jobs will still be a factor that contributes to the gender pay gap but, says OPM Director Kiran Ahuja “these proposed regulations are a major step forward that will help make the federal government a national leader in pay equity.”
Vaishali graduated in journalism from Leeds University, UK. She has worked for her local news outlet, the Leicester Mercury as well as writing personal finance stories for digital publications, The Money Edit, MoneyWeek and GoodToKnow. When she is not writing about money-saving, deals, finance hacks and other personal finance topics, Vaishali likes to travel and she's a foodie.
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