Obama Administration Takes Action on Equal Pay

Author: Marta Moakley, XpertHR Legal Editor

February 1, 2016

The Equal Employment Opportunity Commission (EEOC) has published a notice in the Federal Register regarding a proposed revision of the Employer Information Report (EEO-1), furthering the Obama Administration's plans to advance equal pay protections for all workers.

President Obama delivered remarks on the seventh anniversary of the signing of the Lilly Ledbetter Fair Pay Act, outlining his efforts to address the wage gap. The proposed actions would create additional compliance obligations for employers.

EEO-1 Reporting Changes

The EEOC, in partnership with the Department of Labor (DOL), is proposing to collect, on an annual basis, summary pay data by gender, race and ethnicity from businesses with 100 or more employees. The comment period for the proposed changes ends on April 1, 2016.

This information would be collected using an updated EEO-1 Report. In addition to the current requirements of submitting information regarding employees' race or ethnicity and sex in each of 10 job categories, employers would also be required to provide compensation data to be categorized in 12 pay bands. The compensation data would consist of Form W-2, Wage and Tax Statement, earnings information for a 12-month period, as well as the hours worked by employees. Form W-2 earnings information includes wages, salaries, fees, commissions, tips, taxable fringe benefits and elective deferrals.

This type of data collection would expand upon and replace an earlier plan by the DOL to collect similar information from federal contractors.

The EEOC states in its proposal that it will use this information to "discern potential discrimination while preserving confidentiality." Therefore, any information reported by employers may serve as a basis for an enforcement action or an audit.

Council of Economic Advisers Issue Brief

The Council of Economic Advisers also released an issue brief that explores the state of the gender wage gap. According to the report, in 2014, a woman's median earnings when working full-time, year-round were only 79% of the median earnings of a man working on an equivalent basis. The eight-page report studies factors that contribute to the wage gap, such as education, experience, family responsibilities and wage negotiations.

Equal Pay Legislation at the Federal and State Levels

President Obama also called on Congress to pass the Paycheck Fairness Act, which has stalled in the Senate. The Paycheck Fairness Act would amend portions of the Equal Pay Act to enhance remedies and enforcement options under the law.

With movement on equal pay delayed at the federal level, a number of pay equity bills have been introduced in various state legislatures, including Washington, Colorado, Maryland and New Jersey. A bill strengthening equal pay passed unanimously in the Massachusetts State Senate, and will now be considered by the House.

In addition, California and New York strengthened their equal pay laws this year.