OPM is “planning to propose changes to our regulations that address the use of prior salary history in the hiring and pay-setting process” for federal employees, director Kiran Ahuja has said.
The announcement, made at a White House event on administration initiatives on gender-based pay differences, did not specify when such rules would be issued—nor whether, as might be presumed, they would apply to those changing jobs within the government as well as to those being hired in from the outside.
“Banning the use of prior salary history can help break the cycle of past arbitrary and potentially discriminatory pay that can follow women and workers of color from job to job, entrenching gender and racial pay gaps over time,” a White House statement said.
While federal pay generally is set according to fixed schedules according to the job duties and qualifications needed, agencies do have some flexibility in setting rates for new hires. Even greater discretion is available for certain senior positions and in alternative pay systems where pay is set within broad bands.
Issuing formal rules would go beyond guidance in the form of memos and fact sheets during the Obama administration that told agencies that when setting starting salaries, they should not put excessive emphasis on past salaries since they may have been artificially depressed.
In an executive order last June expanding on diversity and inclusiveness initiatives in the federal workplace, President Biden had told OPM to consider barring agencies “from seeking or relying on an applicant’s salary history during the hiring process to set pay or when setting pay for a current employee.”
The GAO reported in 2020 that on average federally employed women made 7 cents less on the dollar than men in 2017, down from a gap of 19 cents in 1999. Almost all of that reduction was due to changes in what GAO called explainable differences such as relative levels of education, narrowing from 11 cents to 1 cent on the dollar in that time. It said that the rest of the difference—which in that time narrowed from 8 to 6 cents on the dollar—may be due to factors outside its review—potentially, but not necessarily, including discrimination.