Advancing Economy, Efficiency, and Effectiveness in Federal Contracting by Promoting Pay Equity and Transparency
The order directs the Federal Acquisition Regulatory Council to consider new rulemaking that would limit or prohibit federal contractors and subcontractors from using job applicants' prior salary history when making hiring and pay decisions, with the goal of improving pay equity and transparency.
What this order does
What it orders
The order directs the Federal Acquisition Regulatory Council, in consultation with the Secretary of Labor, to consider issuing proposed rules promoting pay equity and transparency for workers employed by federal contractors and subcontractors. The Council must specifically evaluate whether to limit or ban contractors from seeking or relying on applicants' existing or past compensation when making employment decisions, and whether any resulting rules should include accountability measures.
The order does not itself change any contracting requirement, prohibit salary history inquiries, or create enforceable rights. It initiates a consideration process, meaning any concrete change depends on future rulemaking. The order also notes that OPM separately anticipates proposing parallel rules addressing salary history in federal hiring — a process tied to an earlier 2021 executive order on workforce diversity and inclusion.
Who it affects
Federal contractors and subcontractors, job applicants and employees seeking or holding positions with federal contractors, and the Federal Acquisition Regulatory Council and Department of Labor, which are directed to evaluate potential new rules.
Why it matters
If the FAR Council ultimately issues rules banning salary history inquiries, workers applying for jobs with federal contractors could no longer be offered pay anchored to lower prior wages — a change that advocates say disproportionately affects women and minority workers. The order itself, however, creates no immediate new obligations.
What must happen and when
How the order is supposed to work
The FAR Council leads the process, consulting with the Secretary of Labor and other agency heads as appropriate. There is no mandatory deadline — the Council must "consider" issuing proposed rules, which would then go through the standard federal rulemaking notice-and-comment cycle before any binding requirement takes effect. The order contains a standard severability provision and an explicit disclaimer that it creates no enforceable rights against the government.
Actions and deadlines
- Consider issuing proposed rules limiting contractor use of salary history in employment decisions, with accountability measures