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Paul Zimmerman

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Pay Data Solicited by Administration to Advance Equal Pay

On January 29, 2016 President Obama announced his Administration was taking further action to advance equal pay goals for all workers by seeking better insight into discriminatory pay practices across industries and occupations. This proposal will require employers with 100 employees or more to annually collect summary pay data by gender, race, and ethnicity, and provide such information to the Equal Employment Opportunity Commission (EEOC). Jenny Yang, chairwoman of the EEOC said, “Too often, pay discrimination goes undetected because of a lack of accurate information about what people are paid.”

If the proposal is accepted, employers would be required to submit the first pay data on September 30, 2017 using the EEOC’s revised EEO-1 form. The proposal would cover 10 job categories, 12 pay bands and over 63 million employees. However, the information will be summary data only, and will not require specific reporting of individual salaries. The data is meant to provide employers with the information they need to self-evaluate their salary standards, and to allow the EEOC to better focus investigations on discriminatory behavior.

Opponents of the expanded reporting requirements claim there is potential for false positives. The summary information provided on the EEO-1 form, they argue, could fail to account for acceptable explanations in pay grade, such as education, seniority, or experience.  Supporters see the law as a step in the right direction toward thoroughly addressing inequality in pay, particularly in light of California’s recently enacted Fair Pay Act, effective January 2016. The Fair Pay Act requires male and females who do “substantially similar work” to be paid at the same rate. The new proposal may help provide information to implement these heightened California regulations, although it is important to note that the proposal does not require the collected data to be made public.  

The proposal will follow the normal vetting procedures and requirements before it can be implemented. Those wishing to comment have 60 days after its publication in the Federal Register.

This article is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.