‘We need to do more’ to close gender-based pay gap, OPM says

Pay

‘We need to do more’ to close gender-based pay gap, OPM says

After some governmentwide changes to address a federal pay gap, OPM called on agencies with their own pay systems to review their policies and make adjustments.

Drew Friedman@dfriedmanWFED

July 22, 2024 5:18 pm

4 min read

The Office of Personnel Management is taking further steps to try to address a gender-based pay gap that federal employees continue to experience.

After making some governmentwide changes, OPM is now calling on agencies that manage their own independent pay systems to review their policies, and make adjustments where they find pay inequities. The goal, OPM said, is to help address the current 5.6% pay gap between men and women in the federal workforce.

In a memo last week, OPM Acting Director Rob Shriver tasked agencies with other, smaller pay systems to conduct a review process similar to OPM’s recent reviews of the General Schedule, Federal Wage System and Senior Executive Service pay systems.

“Our work is not finished, and we need to do more,” Shriver wrote in a July 18 memo to agency leaders.

Specifically, Shriver told agencies to identify any areas where pay gaps exist in their policies, figure out the reasons behind the disparities, create a plan for reducing those gaps and then keep track of how the disparities change over time.

To try to help agencies through the required pay review process, OPM also published further guidance on how agencies should conduct their data analyses over the next couple months.

“In some cases, agency data analysis may need to probe deeper than the analysis conducted by OPM to fully understand the factors behind a gender or racial/ethnic pay disparity,” OPM wrote in the guidance. “For example, an agency may generate data for major occupations that show gender pay gaps by age groupings within each occupation.”

The new instructions from OPM stem from a 2021 executive order on advancing diversity, equity, inclusion and accessibility (DEIA) in the federal workforce. Part of the sweeping DEIA initiative tasked agencies with identifying strategies and eliminating barriers to equity in federal pay and compensation policies.

Agencies have until mid-October to complete their reviews and report back to OPM.

Federal workforce pay gap over time

The federal government is already a step ahead of the private sector when it comes to pay equity. The national gender pay gap is 16%, while the federal pay gap is 5.6%, according to 2022 workforce data. In other words, in the federal workforce, women make about 94 cents for every dollar men make.

The federal gender pay gap has also improved over time. The current 5.6% disparity is much smaller than the 24.5% pay gap that existed back in 1992.

But at the same time, pay inequity in the federal workforce continues to disproportionately affect women of color. Minority women in the federal workforce, on average, earn less in overall salary.

In numbers, some minority groups of women have better representation in the federal sector than in the private sector. But many minority demographic groups are still behind in pay and representation in leadership, according to several 2023 reports from the Equal Employment Opportunity Commission.

Currently, white federal employees make up a larger portion of the workforce from the GS-7 level, up through the Senior Executive Service. By contrast, people of color hold a higher portion of entry-level positions between GS-2 and GS-6, according to a July 2024 workforce report from the Partnership for Public Service.

In its memo last week, OPM asked agencies to focus particularly where there are wider gaps in pay among federal employees.

“When we compare average salary of women and men in various racial-ethnic groups to the average salary of white males in the government, we find larger pay gaps that need to be addressed,” OPM wrote in a July 18 press release.

OPM’s ban on salary history in hiring

The new review requirements for agencies also come after OPM finalized regulations in January 2024, prohibiting agencies from using a federal job candidate’s previous salary history when setting pay in a job offer.

OPM has said its goal with the salary history ban is to address the federal pay gap by removing potential biases that can stem from a federal job candidate’s previous pay rates. In practice, considering past pay rates has often led to higher salaries for men than for women.

OPM’s regulation changes on salary history are expected to take effect for agencies by this October.

“The regulation further positions the federal government as a model employer that prioritizes fairness and opportunity. By helping to close gender and racial pay gaps, the rule is one more step to attract and retain a qualified, effective workforce drawn from the full diversity of America,” the Biden administration wrote in a February 2024 President’s Management Agenda update.

The Department of Justice Gender Equality Network (DOJ GEN), a federal employee organization, has been a long-time advocate of fully banning agencies’ use of salary history in the federal hiring process.

“DOJ GEN applauds OPM for delivering on its commitment to pay equity in the federal sector — first by issuing a robust regulation that bans the consideration of salary history in federal hiring, and now by pushing agencies to go even further,” DOJ GEN President Stacey Young wrote in an email to Federal News Network. “We urge agencies not only to conduct pay audits, but also to meaningfully address any inequities they reveal.”