Menu
Banking Exchange logo215mar2015
Menu

People will talk …

… about what they make, and now new rules apply to such speech

People will talk …

On April 8, 2014, President Obama signed Executive Order 13665: “Non-Retaliation for Disclosure of Compensation Information”, introducing new obligations regarding pay equity and compensation management, and banks must get ready for the resulting rules.

Unfortunately, this Executive Order does extend to “a depository of federal funds” or “an issuing or paying agent for U.S. Savings Bonds and notes in any amount”. Therefore, this new obligation covers banks.

The Department of Labor’s Office of Federal Contract Compliance Programs issued final regulations defining these obligations further, late last week.

Requirements effective early next year

First, the new obligations will go into effect on Jan. 11, 2016. From that date forward, banks will need to implement some additional measures.

The new rule requires that banks allow employees and applicants to discuss their compensation and the compensation of others. So banks will need to review their employee handbooks and policy manuals. The executive order expects that policies will be updated to remove any prohibitions against individuals having these discussions.

Second, from a discipline perspective, banks will need to carefully manage if and when employees are disciplined for engaging in these discussions or related potentially disruptive activity.

This Executive Order changes once again the Equal Opportunity clause. As many will remember, that clause changed when regulations were implemented regarding protected veterans and individuals with disabilities. Then the clause changed again to address sexual orientation gender identity. Now we have a third change.

The Executive Order envisions a requirement that community banks will include a compensation nondiscrimination provision as prepared by OFCCP, into employee handbooks.

Poster requirement pending

Want more banking news and analysis?

Get banking news, insights and solutions delivered to your inbox each week.

And then finally, this new rule will require updates to the “EEO Is The Law Poster”. That “EEO is The Law Poster” has not yet been updated to address prior rounds of regulatory changes which went into effect in March 2014, or December 2014. When that new poster is completed by the agencies, banks will be required to utilize that format.

Steve Greene

Steve Greene is managing member at Helms & Greene, LLC.  He specializes in employment litigation, employee benefits issues, and compensation matters. Greene oversees employment litigation nationally, including discrimination, harassment, retaliation, ERISA, and breach of contract actions against employers. He has worked with major corporations on overtime exemption compliance and in design of compliant compensation methodologies. He has also assisted firms in managing Department of Labor and state regulatory investigations. He worked with Marian Exall, who recently retired from her authorship of “The Human Element.”

back to top

Sections

About Us

Connect With Us

Resources