Democrats’ Shot at EEOC Pay Report Dwindles in Trump Transition

The EEOC’s Democrats are running out of time to revive a key proposal to collect pay data from employers, as the specter of an incoming Trump administration and a more conservative commission loom large.

The proposal to enact a rule for large businesses to annually submit their pay data by race, sex, ethnicity, and job category to the Equal Employment Opportunity Commission is unlikely to survive a transition to a Republican administration with a de-regulatory agenda — and a president that upended a similar Obama-era initiative.

The commission’s switch to a Republican chair in January will all but end its best chance in years to enact the reporting requirement, leaving the job of collecting corporate data that can reveal key gender and race disparities to the states.

“Whatever window there was closed. I don’t see the Trump administration going forward with any of it,” said Michael Elkins, founder and partner at MLE Law.

The Biden administration has added a pay data disclosure proposal starting in its spring 2024 regulatory agenda with an initial January 2025 target date. The timeline was likely the agency betting on having a second Democratic administration to accomplish its goal, said Lawrence Lorber, counsel at Seyfarth Shaw LLP and a former Labor Department official.

“As we’ve previously noted, the agenda does not bind the agency, and timeframes may change. A majority of the current Commission has expressed strong support for collecting pay data, and hope the effort can continue to move forward,” EEOC spokesperson Brandalyn Bickner said in an email.

The EEOC would face a months-long rulemaking process that would not wrap up before Inauguration Day. It would have to publish a pay data proposal, allow for a 60-day comment period, and publish a final rule. Even if the EEOC opted to complete pay data collection using the less burdensome Paperwork Reduction Act, as it did during the end of the Obama-administration, a 60-day public notice period is still required.

Although Democrats will maintain majority voting power at the commission until 2026 due to the agency’s staggered terms, the power and control over the agenda will fall to a Republican chair, likely the sole GOP commissioner, Andrea Lucas.

‘Very Narrow’ Window

The Biden EEOC faced constraints on their ability to move aggressively and quickly on the rule. Due to staggered terms, Chair Charlotte Burrows didn’t have a Democratic voting majority at the commission until July 2023, when Commissioner Kalpana Kotagal was confirmed.

On a “fairly technical level” the EEOC may have been able to put the rule in place, but the window to do so was “very narrow,” said Vasu Reddy, director of state policy for workplace justice at the National Women’s Law Center. This was in part because the agency was waiting to decide how to proceed following a report it commissioned from the National Academies of Sciences, Engineering, and Medicine on the pay data it collected during the brief period it was legally permitted to do so, she added.

The pay data was collected from the years 2017 and 2018 through Component 2 of its EEO-1 form, as temporarily required by a court order while the survey was mired in litigation from the Trump administration. The report evaluating the data wasn’t released until July 2022.

In the first year of Kotagal’s term the new Democratic majority on the EEOC has had a full regulatory plate, passing final rules under the Pregnant Workers Fairness Act and workplace harassment guidance on party-line votes.

Collecting pay data in addition to the basic demographics the EEOC already gathers from companies would help the commission enforce Title VII of the 1964 Civil Rights Act, and the Equal Pay Act, worker advocates say.

“In some states, you don’t have any clue of what the value of the job is, what the range of pay of the job is even, so you can’t enforce those rules,” said Kelly Dermody, a plaintiff-side employment attorney at Lieff Cabraser Heimann & Bernstein LLP.

The numbers disclosed to the EEOC during the short-lived Component 2 collection showed significant gaps in national median pay between men and women, according to commission data. In 2017, men’s median pay nationwide fell between $39,000 and $49,000, compared to $24,400 to $30,600 for women.

Roadblocks Ahead

But implementing employer pay data reports will be increasingly challenging no matter which party is in the White House.

The new standard set by the US Supreme Court in Loper Bright Enterprises v. Raimondo, which overturned the Chevron doctrine that established lower courts should defer to agencies’ reasonable interpretation where statutes are silent or ambiguous, will make it harder for the EEOC, Lorber said.

Loper Bright leaves federal agencies like the EEOC open to more legal challenges over statutory authority to issue certain rules.

“If they want to come back again and do something in 2029, there’s a question as to what authority they have,” Lorber said. Even a PRA process would be more difficult since the EEOC would have to argue the pay report is “data collection,” not a regulation falling under Loper Bright, he added.

A lack of federal action on pay disclosures would leave the states to pass laws demanding companies provide that data. California and Illinois already have such laws in place. A pay data disclosure requirement written into a Massachusetts law would be triggered by the EEOC implementing collection federally.

State efforts “affirm the importance of demographic data collection for civil rights enforcement and advancing equal employment opportunity,” Burrows said in a statement.

“Having a single federal pay data collection for larger US companies would be a huge step forward in ensuring equal pay for equal work,” she said.

The states’ data could provide more evidence about a pay collection’s benefits, Reddy said.

“That would increase the momentum and make a better case, so that if the next administration came in, it would reduce the friction for reinstating this,” she said.