On January 29, 2016, the U.S. Equal Opportunity Commission (EEOC) issued a press release announcing a proposed revision to the Employer Information Report EEO-1. The revision entails collecting pay data from employers who are required to file EEO-1 reports. Specifically, starting with 2017 EEO-1 filings, employers would have to provide aggregate data on pay ranges in the form of summary W-2 compensation and hours worked for all employees by gender and race/ethnicity. A link to the proposed form can be found here.
The EEO-1 report collects information on an employer’s workforce including information regarding race, ethnicity, sex, and job category. All private employers with 100 or more employees or companies with fewer than 100 employees which are legally considered part of a single enterprise comprising 100 or more employees in total are required to provide this information to the federal government. In addition, all federal contractors who have 50 or more employees and a contract/subcontract or purchase order amounting to $50,000 or more must also comply with this requirement.
The press release emphasized that the data would be used to identify “possible pay discrimination and assist employers in promoting equal pay in their workplaces.” The proposed changes are available for inspection on the Federal Register website and were officially published in the Federal Register on February 1, 2016. Members of the public have until on or about April 1, 2016 to submit their comments.
The press release noted that the federal government’s goal in collecting this additional pay information was to gain insights into pay disparities across industries and occupations and to strengthen federal efforts to combat discrimination. In addition, the EEOC plans to compile and publish aggregated pay data which would then enable to employers to conduct their own analysis of their pay practices. This pay data may be used to assess complaints of discrimination, focus agency investigations, and identify existing pay disparities that may warrant further examination.
The EEOC announcement on the collection of pay data fell on the exact day of the 7 year anniversary of President Obama signing the Lilly Ledbetter Fair Pay Act (Ledbetter Act). The Ledbetter Act made it easier for American workers to challenge illegal unequal pay. Specifically, the Act amended the Civil Rights Act of 1964 and allowed for unfair pay complaints to be filed within 180 days of a discriminatory paycheck, and 180 day period resets after every such paycheck is issued. Even after the passage of the Ledbetter Act several years ago, unequal pay is still an issue that American workers are facing. According to the White House, full-time women workers are earning only about 78% of what male workers are earning. In addition, the pay gap is even wider for women of color where African-American and Latina women are earning 64 cents and 56 cents respectively for every dollar earned by a white non-Hispanic male. The EEOC is hoping to address these disparities by collecting and analyzing relevant pay data. There may, however, be some limitations in the usefulness of the aggregate pay data the EEOC is seeking to collect. For example, the EEO-1 categories do not distinguish between different jobs or the type or level of work performed by workers and therefore may not reflect similarly situated employees. It will remain to be seen how valuable the pay data ends up being for both the federal government’s enforcement purposes and for employers who are trying to avoid any potential liability by ensuring that their pay policies fall in line with equal pay for equal work.