Obama Announces Further Efforts to Combat Gender Pay Inequality
The proposed rule would dramatically expand the scope of required disclosures by employers.
This article was published in the January 29, 2016, issue of the National Law Review.
A little-known (or perhaps forgotten) fact is that the very first bill President Obama signed into law was an employment law: the Lilly Ledbetter Fair Pay Act of 2009. This law unwound the Supreme Court’s 2007 decision in Ledbetter v. Goodyear Tire & Rubber Co., and was intended to make it easier for employees to bring gender pay discrimination claims by clarifying that each allegedly discriminatory paycheck starts a new statute of limitations. To commemorate the seventh anniversary of his signing of the Ledbetter Equal Pay Act, President Obama held a press conference, attended by Lily Ledbetter, the Secretary of Labor, the Chair of the Equal Employment Opportunity Commission, and Billie Jean King – to announce the Administration’s latest initiative to address gender pay inequality, proposing a rule to expand the information required from employers regarding their pay practices.
President Obama’s announcement explained the Equal Employment Opportunity Commission (EEOC) will be proposing (in the form of a proposed new federal regulation) a revision to its longstanding EEO-1 form. The EEO-1 form currently requires employers with 100 or more employees to provide the federal government with workforce profiles containing data sorted by race, ethnicity, and gender. The proposed new rule would dramatically expand the scope of required disclosures by employers, and would specifically require disclosure of aggregated pay and hours worked data to the federal government. The proposed rule would also seek to require employers to submit this information via an updated and improved data collection mechanism, ostensibly easing the compliance burden on most employers.
According to the EEOC’s statement, the new data “would provide [the] EEOC and… Department of Labor with insight into pay disparities across industries and occupations and strengthen federal efforts to combat discrimination.” The EEOC believes the data would allow the agencies to use information “to assess complaints of discrimination, focus agency investigations, and identify exiting pay disparities that may warrant further examination.” However, aside from providing greater transparency and insight into the pay practices of America’s larger employers, a significant aim of the proposed rule appears to be to turn the conversation inward. According to EEOC Chair Jenny R. Yang, “this information will assist employers in evaluating their pay practices.” The EEOC statement similarly expresses the hope that the published aggregated data “will help employers in conducting their own analysis on their pay practices to facilitate voluntary compliance.”
If approved, the revisions would begin with covered employers’ September 2017 report. The proposed changes are scheduled to be published on the Federal Register website on February 1, 2016. Employers and members of the public will then have sixty days to submit comments, with the comment period ending on April 1, 2016. According to the White House, the proposed change would cover over 63 million employees.
Employers should also be cognizant of changes and proposed efforts to amend state equal pay laws, as several states led by California and New York have strengthened their respective state equal pay acts within the last year.