Submitted via www.regulations.gov

Carey Jones
Lead HR Specialist
U.S. Office of Personnel Management

Re: Proposed Rule with Request for Comments; RIN 3206-AO39; 88 Fed.Reg. 30251-30262 (May 11, 2023)

Dear Lead HR Specialist Jones:

The National Employment Lawyers Association (NELA) respectfully submits the following comments concerning the Office of Personnel Management’s (OPM) Proposed Rule with Request for  Comments, as published in the Federal Register at 88 Fed.Reg. 30251-30262 (May 11, 2023).

NELA is the largest professional membership organization in the country comprised of lawyers who represent employees in labor, employment, wage and hour, and civil rights disputes. Our mission is to advance worker’s rights and serve lawyers who advocate for equality and justice in the American workplace. NELA and its 69 circuit, state, and local affiliates have a membership of over 4,000 attorneys who are committed to working on behalf of those who have faced illegal treatment in the workplace. NELA has filed numerous amicus curiae briefs before the United States Supreme Court and other federal appellate courts regarding the proper interpretation of federal civil rights and worker protection laws and comments regularly on relevant proposed rules. NELA also engages in legislative advocacy on behalf of workers throughout the United States. A substantial number of NELA members’ clients are federal employees, including federal employees suffering from alleged pay discrimination and other pay-setting issues. NELA, therefore, has an interest in regulations affecting federal employee pay-setting.

These comments will first address OPM’s proposed amendments to the regulations, and then will separately respond to OPM’s request for specific comments from its Notice.

1. OPM’s Proposed Amendments to the Regulations
   Regarding the proposed rules, NELA strongly supports the fight against pay discrimination. Accordingly, NELA is in favor of the proposed regulations to limit or ban consideration of individual  applicants’ individual pay history in initial pay-setting, to help curtail the risk of carrying over and/or introducing private sector pay disparities into the federal sector for new federal hires. NELA has some concerns, however, regarding how these newly proposed paysetting requirements will be implemented to best serve concerns of fairness, transparency, and enforceability. Many individual applicants will not have the resources to conduct searches on comparative non-federal pay to assess the pay environment or to argue for higher starting pay.Hiring agencies are in a better position to provide data and conduct reviews, but agencies will need guidance from OPM on standards for what constitutes an effective comparative pay information search (especially to the extent that many public economic data sets don’t necessarily compute prevailing wages in a given locality area for all relevant occupations). NELA further supports requiring the hiring agency to search comparative pay of current employees at the hiring agency when setting pay for new hires, with measures taken to account for differences in locality pay and post-hire merit-based pay increases, such as Within-Grade Increases and Quality Step Increases.To ensure transparency and to facilitate review by OPM, the Equal Employment Opportunity Commission and other authorities, hiring agencies who opt to start new federal employees above step 1 under these new regulations should be required to draft a memorandum stating the rationale for that decision and identifying the specific factors warranting setting starting pay above step 1.

   To further curtail the risks of improper consideration of prior non-federal salary history in hiring and pay-setting decisions, OPM should modify the USAJobs website and its standard forms for federal job applications to eliminate rote requests for applicants to disclose their prior salaries for non-federal positions as part of detailing their employment histories.

   While NELA is overall in favor of proposed Section 531.212(c)(2)(ii), there is a risk of abuse, but such risks may be mitigated in part if OPM were to modify the proposed rule (a) to require that the competing job offer be contemporaneous to the federal offer at issue, and (b) to require that the competing job offer be bona fide (as certified in writing by the applicant) and not, for example, be an offer that is made at the request of the applicant with no real intention of resulting in actual hiring for the purpose of affecting pay-setting in the hiring agency’s job offer.

   Finally, while these proposed regulations appear to be a potentially useful step in the fight against pay discrimination, they are not a perfect cure. Accordingly, OPM should make clear that mere compliance with these rules does not constitute a per se defense to any subsequent claims of pay discrimination, or in any way modify the preexisting legal standards for pay discrimination claims under the relevant statutes and precedent. Further, these regulations should not serve as an excuse for leaving current employees comparatively underpaid, or for agencies’ failure to adjust the overall pay environment if needed in order to offer competitive salaries sufficient to attract talent to federal service.

2. OPM Request for Comments – NELA Responses
   OPM Question: What data should the Federal Government consider when measuring the effects of greater pay equity achieved through a salary history ban, including effects on Federal worker turnover?NELA Comment: OPM should consider possible data sources such as exit interviews and EEOC data on pay discrimination cases. OPM Question: As OPM continues to work with agencies to analyze and refine data in this issue area, what factors should OPM consider for positions of high occupational segregation (wherein women and men often tend to work in different occupations, and the occupations that are predominantly held by women pay less and are valued less, compared to those predominantly held by men at the same level of skill or education)?NELA Comment: Given that the goal is equal pay for equal work, the focus of these initial steps to fight pay discrimination needs to be on ensuring fairness in pay setting for like positions. Ultimately, changes in pay between different positions will require modification of the classification standards used to adjust the scoring results, as those classification standards are the main measure OPM has in place for instilling uniformity in pay-setting across different agencies.

   OPM Question: Is there any research we should consider regarding what impact structured pay systems have on pay equity, and what impact pay policies that allow organizations to set pay above the minimum rate of the rate range for new employees based on specified criteria have on pay equity?

   NELA Comment: Yes. OPM should consider latitudinal studies across a sample of agencies to determine if there are differences between different hiring agencies and between different facilities on how frequently these authorities are invoked, and if there is any demographic disparities for subject employees in when and how these authorities are invoked.

   OPM Question: As explained in the Regulatory Alternatives section, OPM determined that it should prohibit Federal agencies from relying on prior salary history even if the candidate voluntarily provides it. What are the advantages and disadvantages to this position, and what are possible justifications for allowing an exception to the prior salary history prohibition? What information, if any, exists on whether such an exception would be consistent with the goals of this regulation?

   NELA Comment: Use of prior individual salary history for pay-setting for new federal hires should be banned, without exception. The proposed regulation is necessarily based on an overall policy judgment that any individual-specific salary differential based on prior salary history is suspect, and further avoids the morale problems (if not outright unlawful pay discrimination) that result from unfairness in pay. A bright-line rule seems more likely administrable than would be allowance of individualized assessment of the alleged rationale for the pay differential; the latter runs the risk of re-allowing disparate treatment to occur under the pretext of discretionary individualized assessments.

   OPM Question: What information should agencies provide to applicants or candidates on the pay-setting flexibilities that they use to set starting salaries above the minimum rate of the rate range? At what stage in the hiring process should agencies provide this information?

   NELA Comment: Prior to making an offer to an applicant, the hiring agency should conduct its own internal reviews of internal comparator pay and of non-federal sector pay for comparable positions. Then, at the initial offer stage, hiring agencies should be required to give applicants notice and the opportunity to submit to agency pay-setting authorities documentation of any job offers or data on comparative pay for non-federal positions that the applicant may have. This notice should explain in plain language the standards for requesting an increase in the starting step level for the new applicant, so that the applicant is informed of the relevant legal standards and can tailor their response accordingly and should provide (with personal identifiers redacted) the comparative salary information (external or internal) that the hiring utilized in its comparison. Only after receipt and review of any response from the applicant (or the passing of the deadline with no response) should the hiring agency finalize the starting pay offer grade and step for the position being offered.

   OPM Question: Are there additional ways that the Federal Government can be a model employer with respect to pay equity?

   NELA Comment: OPM should add language formally stating that the federal government intends to serve as a model employer with respect to pay equity. Hiring agencies and OPM should maintain oversight and track how these pay-setting authorities are employed. OPM should further continue to use the General Schedule or other similar regimented pay schedules; while the General Schedule is not without its faults and detractors, its formal structure and limitations on line management discretion in pay-setting have served anecdotally to reduce the opportunities for line management to engage in unlawful pay discrimination, thus helping to promote pay equity. Finally, in cases where pay discrimination is found, it is important that strong disciplinary action be taken against the discriminating managers responsible to deter deliberate pay discrimination from occurring.

Thank you for your consideration. If you have questions or wish to discuss these matters, please contact Ashley Westby at awestby@nelahq.org.

Sincerely yours,
Ashley Westby
Program Director
National Employment Lawyers Association