Washington, D.C. – Today, the U.S. Office of Personnel Management (OPM) released a final regulation that prohibits the use of previous non-federal salary history in setting pay for federal employment offers. Under the final regulation, federal agencies cannot consider an applicant’s non-federal salary history when setting pay for new federal employees in the General Schedule, Prevailing Rate, Administrative Appeals Judge, Administrative Law Judge, Senior Executive Service, and senior-level and scientific or professional pay systems.   

“The federal government has been, and continues to be, a national leader in pay equity,” said OPM Director Kiran Ahuja. “Relying on a candidate’s previous salary history can exacerbate preexisting inequality and disproportionally impact women and workers of color. With this regulation, the Biden-Harris Administration sets a new standard and demonstrates to the nation that we mean business when it comes to equality, fairness, and attracting the best talent.”    

Under the final regulation, agencies will no longer be able to set pay based on non-federal salary history for those who are joining the federal government for the first time or are returning after a break in federal service. Agencies also will not be permitted to consider the salary in a candidate’s competing job offer when setting pay. Finally, agencies will be required to have policies regarding setting pay based on a previous federal salary for employees who have previous civilian service in the federal government.  

The regulation further positions the federal government as a model employer, the first priority under the Biden-Harris Administration’s President Management Agenda. By helping to close gender and racial pay gaps, they help attract and retain a qualified, effective workforce drawn from the full diversity of America.  

Background on Salary History Bans and Gender Pay Gap  

As the Department of Labor (DOL) notes, reliance on an employee’s prior salary can exacerbate pay disparities for any worker who has faced discrimination in the labor market, allowing pay disparities to follow a worker from job to job. Research shows that implementing salary history bans can narrow the gender wage gap and increase wages resulting in reduced pay disparities for workers of color compared to white workers.  

Currently, 21 states have laws or executive orders that address employers’ use of an applicant’s salary history, including directives that, like OPM’s final regulations, prohibit employers from relying on a job applicant’s salary history in setting pay.   

The gender pay gap for the federal government’s civilian workforce in 2022 was 5.6%, an improvement from 5.9% in 2021. The federal gender pay gap is far smaller than the national gender pay gap, which sits at 16%. From 1992 to 2022, the gender pay gap for the federal workforce has decreased from 24.5% to 5.6%. In addition, in recent years women in the Senior Executive Service, the senior-most leadership ranks of the federal government, are paid approximately the same as their male counterparts.