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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 8 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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Early this month, the Federal Acquisition Regulatory Council (FAR Council) formally withdrew its proposed rule regarding pay equity and transparency for federal contractors and subcontractors. Originally issued on January 30, 2024, the proposed rule sought to impose<a> </a><a href="https://www.thompsonhine.com/insights/proposed-rule-on-pay-equity-and-transparency-may-significantly-impact-government-contractors-and-federal-supply-chain-companies/" target="_blank" rel="noreferrer noopener">several sweeping requirements</a> on federal contractors, including prohibiting contractors from seeking or considering a job applicant’s compensation history during the hiring process and requiring disclosure of salary, wage and benefits information in all advertisements for job openings related to a federal contract or subcontract. The proposed rule’s notice and comment period ended on April 1, 2024, but there had been no indication from the FAR Council as to when (or if) a final rule would be issued.

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The FAR Council ended any further speculation in a <a href="https://www.federalregister.gov/documents/2025/01/08/2025-00118/office-of-federal-procurement-policy-federal-acquisition-regulation-pay-equity-and-transparency-in" target="_blank" rel="noreferrer noopener">notice</a> published in the Federal Register on January 8, 2025. Citing the Biden administration’s limited remaining time, as well as federal agencies’ other priorities, the FAR Council formally withdrew the proposed rule. As a result, any federal salary history bans and/or compensation disclosure requirements for government contractors are dead in the water.

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While it is unlikely that the proposed rule (or any revised version) will be revived by the Trump administration, federal contractors and subcontractors should be aware of similar pay transparency and pay equity requirements under Department of Labor regulations or state or local law. As a part of its compliance review process, the Office of Federal Contract Compliance Programs (<a>OFCCP</a>) actively monitors contractor compensation practices and demands specific proof of a contractor’s pay equity efforts. Additionally, 14 states, the District of Columbia and several municipalities currently <a href="https://www.thompsonhine.com/insights/2025-brings-new-pay-transparency-requirements-to-five-states/" target="_blank" rel="noreferrer noopener">impose some form of wage disclosure requirements</a> on private employers, and at least 17 states and 10 cities and counties have salary history bans in effect.

Federal contractors operating in these jurisdictions should therefore review their existing job posting and hiring procedures to ensure compliance with any pay transparency requirements that may apply. Contractors should also be mindful of their ongoing pay equity obligations under OFCCP regulations and take steps to evaluate their compensation practices so that any disparities can be identified and appropriately resolved. Contractors with specific questions or concerns regarding their compliance obligations should contact legal counsel.

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<em>This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.</em>

<em>This document may be considered attorney advertising in some jurisdictions.</em>

https://admin.thompsonhine.com/wp-content/uploads/2025/01/Government-Contracts-Update-FAR-Council-Withdraws-Proposed-Rule-on-Pay-Equity-and-Pay-Transparency.pdf

FAR Council Withdraws Proposed Rule on Pay Equity and Pay Transparency

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