Hunton Employment & Labor Perspectives

The Equal Employment Opportunity Commission announced on January 29, 2016 its proposed revision to the Employer Information Report (EEO-1) that would obligate businesses with 100 or more employees to annually turn over pay data by gender, race and ethnicity. Although employers will not have to divulge specific pay rate information for individual employees, they would have to report pay bands across 10 different job categories.

According to EEOC Chair Jenny Yang, the Commission will work in partnership with the Department of Labor to collect and analyze this data, and the data will be used to focus wage discrimination investigations, identify existing pay disparities, and help employers evaluate their own practices.

Proposed changes have been 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 60 days from that date April 1, 2016, to submit comments. The EEOC expects the revisions to be finalized by September, with the first reports due in the fall of 2017.

The EEOC’s announcement highlights again the growing political and public interest in gender pay equality, and comes seven years after President Obama signed the Lilly Ledbetter Fair Pay Act — his first piece of legislation as president — which makes it easier for women to challenge discriminatory pay in court. President Obama is also once again calling for Congress to pass the Paycheck Fairness Act, which would protect women from retaliation when they seek equal pay. Democrats have repeatedly introduced the Paycheck Fairness Act during the current administration, but it has always been defeated.

Although the federal Paycheck Fairness Act has yet to pass, employers have been monitoring and working to comply with new legislation throughout various states that borrow aspects from the proposed federal law, including new fair pay laws in California and New York. In light of these laws and now the EEOC’s intent to collect pay data, employers should continue, among other things, to review their employee compensation data, assess the potential causes for any pay disparity, and make adjustments where necessary.