“Show Me the Money” – Why the EEOC Wants to Know What you Pay Your Employees

In late January 2016, the Equal Employment Opportunity Commission (“EEOC”) announced that it wants more information from you about your employees. Federal regulations already require employers with one hundred or more employees to report certain information to the EEOC. Presently, the EEOC requires qualified employers to disclose the gender and race of full – time and part – time employees employed as executives, senior level officials, managers, first or midlevel officials and managers, professionals, technicians, sales workers, administrative support workers, craft workers, operatives, laborers and helper and service workers. The EEOC’s proposed changes, if implemented, will require employers to disclose aggregate data on pay ranges and number of hours worked. The EEOC considers the collection of additional data to be “a significant step forward in addressing discriminatory pay practices” that will “help employers in evaluating their pay practices to prevent pay discrimination and strengthen enforcement of our federal anti – discrimination laws.” The measure will likely result in a crack – down on discriminatory pay practices by the EEOC. The measure will also place an added burden on employers who already expend precious time and money to compile the already extensive EEO-1 reports.

It should be noted that federal involvement in wage discrimination is nothing new. In fact, wage discrimination based on gender has been unlawful for over fifty years. In 1963, Congress passed the Equal Pay Act. The Act prohibited employers from paying male and female workers different wages for jobs which required equal skill, effort, and responsibility, and which were performed under similar working conditions. However, employers could still pay different wages to employees on the basis of a seniority system, a merit system, a system which measured earnings by quantity or quality of production, or a differential based on any other factor other than sex. One year later, the Civil Rights Act of 1964 was signed into law. Title VII of the Civil Rights Act of 1964 offers broad prohibitions against discrimination on the basis of gender and other protected traits. Title VII has been interpreted to prevent employers from discriminating against employees in the terms and conditions of their employment, which may give employees another avenue to bring claims for pay discrimination.

Gender pay equality continues to be a source of great debate. Women’s rights advocates argue that women are discriminated against on the basis of gender. Advocates cite as evidence the fact that women make around seventy – eight cents for every dollar made by a man in the same job. On the other hand, economists argue that the differences in pay between men and women are attributable to the types of jobs that attract women because of their historical role as “caregivers.” Claudia Golden, a Professor of Economics at Harvard explained that women and men when hired immediately after college earn nearly identical wages. However, Golden notes that women are traditionally called upon to raise children or to care for aging parents. Professor Golden hypothesizes that the “caregiver” role requires women to seek jobs with flexible schedules or that do not require travel for work. Ann Marie Slaughter, a distinguished scholar in public policy noted that women’s need for flexibility or inability to travel may prevent women from receiving the same compensation or the same promotion frequency as men. Whether the gender pay gap is a result of discrimination against women, or has another non- discriminatory explanation, the debate rages on.

The Obama Administration has taken a stance on the issue by creating the “President’s National Equal Pay Task Force.” The task force was created to “crack down on violations of equal pay laws . . . [by] bringing together the Equal Employment Opportunity Commission (“EEOC”), the Department of Justice (“DOJ”), the Department of Labor (“DOL”), and the Office of Personnel Management (“OPM”).” The Task force proposed the changes to the EEO-1 reporting as a means of combating pay discrimination in the workplace. The EEOC’s proposed changes to the EEO-1 reporting requirement were announced on the seventh anniversary of the signing of the Lilly Ledbetter Fair Pay Act. The Ledbetter Act was among the first legislation signed by President Obama. The act lengthens the time period during which employees must file a claim alleging wage discrimination, or be forever barred by the statute of limitations.

The EEOC’s proposed changes to the EEO-1 reporting requirements were published in the Federal Register on February 1, 2016. The publication in the Federal Register marked the beginning of a sixty day comment period during which employers and other interested persons or groups may submit comments or concerns relating to the EEOC’s proposed changes. The window for public comment expires on April 1, 2016, after which time the EEOC will formulate the final rule with which employers must comply. The proposed changes will require employers to include pay data beginning with employers’ September 2017 EEO-1 report. It is important to note that the EEOC’s proposed changes will not affect EEO-1 data which must be collected by employers for their September 2016, report. Changes to the EEO-1 reporting will enhance the already substantial burden placed on employers and may even land employers in hot water with the EEOC.

-Bricker S. Daughtry, Shareholder

*To view Bricker’s article as featured in ARHA Now Magazine, please click here.


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