Obama strengthens equal pay protections

April 8, 2014: 1:06 PM ET
2 minutes of Obama on equal pay
NEW YORK (CNNMoney)

President Obama signed two executive actions Tuesday aimed at strengthening existing equal pay laws.

Both actions could make it easier for some workers to find out how much their colleagues are making, and as a result, whether or not they are being compensated fairly. The move comes on what is dubbed "Equal Pay Day" and as part of Obama's push to ensure women earn equal pay for equal work.

"Today I'm going to take executive action to make it easier for working women to earn fair pay," said Obama just before signing the actions.

"Pay secrecy fosters discrimination and we shouldn't tolerate it," he said.

The measures will only apply to companies with federal contracts, but Obama has urged Congress to extend protections to all American workers.

Related: 6 jobs with most equal pay

One action prohibits federal contractors from firing, demoting or otherwise retaliating against employees who discuss their compensation.

It is important that women and all employees feel they can seek information about pay from colleagues without the threat of being fired, White House Senior Adviser Valerie Jarrett said Monday on a conference call with reporters.

The second action, a presidential memorandum, instructs the secretary of labor to collect data on compensation from federal contractors, including a breakdown by sex and race.

It aims to allow for more efficient enforcement and even voluntary compliance. Employers often don't realize there is a pay gap until they're confronted with it, said Betsey Stevenson, a member of the White House's Council of Economic Advisers, on the call.

Related: No movement for women at top in corporate America

Tuesday's moves are just as much about politics as policy. Democrats feel that equal pay is an issue they can win on in the 2014 midterm elections. Obama even worked the issue into his State of the Union address.

Some experts say a law prohibiting employers from retaliating against employees who talk about their pay isn't necessary.

Joel Barras, a partner at Reed Smith law firm, says that is already illegal under the National Labor Relations Act. The executive order could increase the penalties employers face for firing or disciplining an employee for talking about pay, but Barras doesn't see a large number of claims related to this issue.

Related: Corporate America's blindness to gender discrimination

Still, half of all workers report that talking about wage and salary information is either discouraged or prohibited and could lead to punishment, according to a survey from the Institute of Women's Policy Research and the Rockefeller Foundation.

It's not always explicitly spelled out in an employee contract or manual, but employers often tell new hires not to discuss their pay with others, said Katherine Kimpel, a partner at the Sanford Heisler law firm who focuses on gender discrimination matters.

Summers: Obama not doing enough on jobs

Even asking the most basic questions about what a colleague makes is not clearly protected under the current law, she said.

Obama's executive order won't impact everyone, but it's all he can do without legislative action. His administration still wants to see Congress pass the Paycheck Fairness Act, so that these laws are applied to all employers, not just those with federal contracts.

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