US bans use of private sector pay history in federal job appointments

By on 05/02/2024 | Updated on 05/02/2024
A photograph of US dollars.
Photo by Brett Hondow, Pixabay

US federal government departments and agencies will no longer be able to use private sector salaries to set the wages of new or returning officials under new regulations from the Office of Personnel Management.

The regulation, which was first proposed last May, is intended to help boost pay equity across government by reducing the reliance on employees’ prior salaries. The US Department of Labor found that reliance on an employee’s prior salary can exacerbate gender or racial pay disparities that workers have faced in their career, with a ban on salary history intended to help tackle these differences.

“Relying on a candidate’s previous salary history can exacerbate pre-existing inequality and disproportionally impact women and workers of colour,” OPM director Kiran Ahuja said. “With this regulation, the Biden-Harris administration sets a new standard and demonstrates to the nation that we mean business when it comes to equality, fairness, and attracting the best talent.”

Read more: US government to ban use of salary history in federal job offers

Departments will have to comply with the new rules that bar use of non-federal pay histories when setting remuneration for new federal employees by 1 October. As well as a ban on using private sector salary history, agencies will not be permitted to consider the pay of any competing job offer, and will need to have a policy governing the use of federal salary history.

The gender pay gap for the federal government’s civilian workforce in 2022 was 5.6%, an improvement from 5.9% in 2021, according to the OPM. This is below the national gender pay gap, which sits at 16%.

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About Richard Johnstone

Richard Johnstone is the executive editor of Global Government Forum, where he helps to produce editorial analysis and insight for the title’s audience of public servants around the world. Before joining GGF, he spent nearly five years at UK-based title Civil Service World, latterly as acting editor, and has worked in public policy journalism throughout his career.

2 Comments

  1. Jim says:

    Reading the details of the rule….the government is going to make recruiting top talent very difficult for themselves. A person making the equivalent of a step 5 in industry on the scale will not go to work for the government for a step 1 position.

  2. J says:

    So it looks like it can still be used up until 01 October?

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