OPM directs agencies to conduct pay equity studies

The Office of Personnel Management on Thursday encouraged federal agencies to conduct their own analyses to correct potential pay disparities within their workforces.

In 2021, President Biden signed a sweeping executive order aimed at improving diversity, equity, inclusion and accessibility at federal agencies, including provisions requiring the creation of a governmentwide strategic plan on the issue and that the OPM director consider banning the use of past salary history to set pay during the hiring process. OPM followed through on that edict earlier this year.

In a memo to agency heads Tuesday, acting OPM Director Ron Shriver highlighted OPM’s governmentwide study of pay gaps in the federal workforce, which found that in 2022, the gender pay gap was 5.6%, meaning women on average earned about 94 cents for every dollar male federal workers earned. The figure marks a slight improvement over the 2021 gender pay gap of 5.9% and is significantly better than the nationwide gender pay disparity of 16%.

Shriver directed that federal agencies that operate their own pay systems governing at least 100 employees must now conduct the same review of pay policies that OPM did for the General Schedule, Federal Wage System and Senior Executive Service workforces. And he encouraged all agencies to conduct their own gap analyses to search for pay disparities along gender or racial and ethnic lines affecting their own workforces, regardless of pay system.

“To satisfy [the requirements of Biden’s diversity executive order], agencies with independent pay systems must review their regulations and guidance governing each of these systems and, as appropriate and consistent with applicable law, revise compensation practices to address any pay inequities and advance equal pay,” Shriver wrote. “[In] determining whether revisions are necessary, agencies may consider whether to adopt the policies in OPM’s final pay equity regulations for governmentwide pay systems. OPM also recommends that agencies conduct a pay gap data analysis of such systems.”

Pay gap analyses seek to identify where potential pay disparities exist in a workforce, as well as any causes contributing to the gap. While agencies may opt to base their analyses on average or median salary, OPM recommended using an average so that resulting pay gaps can be directly comparable to the HR agency’s own governmentwide analysis.

“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,” the agency wrote in guidance appended to Shriver’s memo. “For example, an agency may generate data for major occupations that show gender pay gaps by age groupings within each occupation. OPM recommends that agencies analyze data for the most recent fiscal year available to obtain an understanding of the current workforce with respect to gender and racial/ethnic groups. This data can be a baseline for future comparisons.”

Agencies with independent pay systems have until Oct. 17 to conduct their analyses of those systems and determine whether changes to their policies or guidance are required. There is no set deadline for agencies' pay gap analyses to be completed.