The Trump administration is making it easier for tech companies to discriminate against workers, with a policy that impedes efforts to close the gender pay gap in Silicon Valley, current and former US labor officials said.

A new US Department of Labor (DoL) “transparency” directive is forcing DoL officials to disclose preliminary details about anti-discrimination investigations to the targets of the inquiries, which, current and former DoL employees say, enables those companies to evade enforcement efforts and conceal potential violations while cases are ongoing. It’s as if the FBI or the Internal Revenue Service had to give an advanced heads-up to entities they were investigating, the DoL employees say.

A longtime DoL employee not authorized to speak publicly described the policy as a “giveaway to government contractors”, adding that “transparency” was a misnomer: “The objective of this directive is to try to weaken [DoL] enforcement.”

The policy was announced in September 2018 by DoL’s contract compliance director, Craig Leen, and the acting assistant secretary for policy, Jonathan Berry – both Trump appointees – but prompted opposition from some in the agency. It is one of many examples of the DoL’s new leadership eroding existing regulations meant to support workers’ rights, said Laura Padin, senior staff attorney with the National Employment Law Project. The Trump administration suspended an equal pay initiative, moved to roll back a child labor rule, and has dismantled anti-discrimination protections for LGBT workers.

“You have an agency that’s supposed to be the watchdog, and they are not doing their job,” said Patricia Shiu, who served as the DoL’s director of federal contract compliance under Obama. “This is what federal contractors want.”

Industry groups have long pushed for these kinds of changes that would make it harder for the government to scrutinize their labor practices, said Tia Koonse, legal and policy research manager at the UCLA Labor Center.

The changes could be particularly beneficial for Silicon Valley firms, which make hundreds of millions in taxpayer dollars each yearby providing a range of software products and other services to federal agencies. The new directive effectively helps those tech corporations avoid scrutiny, labor experts warn, despite growing recognition that white men in tech make higher salaries than women and minorities doing equivalent work – in violation of equal pay laws.

Under the Obama administration, the DoL repeatedly reported findings of pay gaps and other forms of systemic discrimination in Silicon Valley. A number of Silicon Valley companies have faced DoL investigations.

In the department’s long-running case against Google, the DoL announced this week that in line with the “transparency” directive, it was dropping an appeal that could have forced Google to hand over specific employee salary data. The DoL in 2017 accused Google of “extreme” discrimination against women across the company. Google denies the allegations.

Leen, the DoL compliance director , defended the decision to dismiss the appeal in the Google case, saying it was “the most effective means of reaching final resolution with Google”. Because the DoL had already obtained a trove of records, the case continues and it is unclear how the directive will affect the outcome.

But DoL insiders and former agency leaders say they fearthe “transparency” directive will be most detrimental to new investigations.

The directive is “limiting the tools available to the agency to fulfill its mission”, said Janette Wipper, former regional director of the DoL contract compliance division. “This directive doesn’t address the interest of employees who work for federal contractors. It’s transparency in one direction.”

Under federal law, companies that do business with the US government agree to meet specific non-discrimination standards, enact proactive affirmative action plans, and allow the DoL to access salary records. The DoL’s compliance investigations are a significant opportunity for regulators to push for pay equality on a large scale. An estimated 25% of US employees work for federal contractors.

Workers protest against Google’s handling of sexual misconduct allegations and gender equality at the company’s Mountain View, California, headquarters in November. Photograph: Noah Berger/AP

The directive is ostensibly aimed at helping government contractors comply with the DoL’s anti-discrimination audits by directing investigators to work more “collaboratively” with companies. But it in effect limits the scope of information the DoL can request during an investigation and creates new time constraints for those investigations. Most notably, when the DoL wants to access additional data during its inquiry, the directive stipulates that labor investigators must provide a “summary of any preliminary indicators of discrimination” to the company under investigation.

“I don’t see how you can perform a competent investigation about whether there are problems with the pay gap if you don’t have the data,” said Wendy Musell, a civil rights lawyer and chair of the California Employment Lawyers Association. “This is one of the only mechanisms where we can ensure that our federal taxpayer dollars are not funding discriminatory employment practices.”

“The overall message is, ‘We know that you’re discriminating, and we are content to prevent regulators from catching you,’” said one longtime DoL employee, who was not authorized to speak publicly about the directive.

“It would tell the target of the investigation very early on the theory of the case,” said the DoL employee added. “They will be able to game the system.”

A national DoL spokesperson said the agency remained “committed to increasing compliance with the law” for contractors, adding: “The transparency directive ensures that contractors are made aware of [DoL]’s indicators of discrimination promptly in order to ensure that such discrimination is remedied sooner … so that America’s workers receive relief as quickly as possible when there are violations.”

Since 2017, the DoL’s contract compliance program recovered more than $44m from contractors with back pay and other awards for victims of discrimination, the spokesperson added. That includes financial relief for more than 22,000 workers and job applicants, she added.

But Shiu, the former DoL director, said it appeared the department was taking credit for cases launched under the previous administration, and that she expected the new directive would prevent these kinds of payouts moving forward.

The department was misleading the public about the intent of the new policy, she added: “If you don’t want to enforce the law, don’t enforce the law. But don’t pretend you are doing it under the guise of ‘transparency’.”

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