The US Office of Personnel Management (OPM), responsible for managing federal government civilian employees, put forth new regulations on Wednesday, May 10. These regulations seek to ban the use of an applicant’s salary history in federal employment opportunities. The proposed changes would prevent the federal government from considering an applicant’s previous compensation when determining pay rates for new federal employees across multiple pay systems.
OPM states that the proposed regulations are intended to promote “pay equity” by addressing the disproportionate impact on women and minorities that arises from relying on salary history. These proposed changes align with the Biden administration’s focus on Diversity, Equity, and Inclusion.
OPM Director Kiran Ahuja stated on Wednesday that the newly introduced rules demonstrate the strong commitment of the Biden administration towards promoting equality, fairness, and attracting highly skilled individuals. Ahuja emphasized that these regulations aim to enhance the federal government’s ability to compete with other employers by ensuring that hiring decisions are based on qualifications and expertise rather than previous compensation.
The proposed alterations would have an impact on over 80 federal agencies, necessitating the revision of their pay flexibility procedures and policies. The changes would affect various pay systems, including the General Schedule, Administrative Appeals Judge, Administrative Law Judge, and Prevailing Rate systems.
At present, there are regulations in place in 21 states that restrict employers from considering an applicant’s previous salary when making hiring decisions, with some states completely prohibiting its use.
According to data from the US Department of Labor, states with bans on salary history witnessed a 7.9 percent increase in pay for newly hired individuals from minority backgrounds.
President Biden’s proposed budget for FY2024 includes an average pay raise of 5.2 percent for military personnel and federal employees. This represents an increase from the 4.6 percent pay raise given to federal employees in Fiscal Year 2023.
