The EEOC is poised to address what role the government should play in holding companies accountable for the persistent pay gap for women and minorities after a politically fraught pay data collection was scuttled.
The U.S. Equal Employment Opportunity Commission is actively collecting data this year from the annual EEO-1 forms that for the first time include pay data broken down by race and gender. The Trump administration is ending this attempt to push for uniform pay transparency this year and it’s unclear what will take its place. A public hearing will be held Nov. 20 on changes to the annual form and reporting obligations, and stakeholders are expected to discuss next steps.
The EEOC said it probably won’t collect this data in the same form after this year, citing employer costs 15 times higher than original estimates. The Trump administration had frozen the program, first started under President
The hearing comes at a time when the companies, advocates, and government officials are paying greater attention to gender imbalances in the workplace, partially sparked by the #MeToo movement and a new focus on sexual harassment. Litigation filed against major companies over pay and promotion practices have spiked. Both shareholder activists and employees have pushed for change, as well.
Recent data show that women make roughly 80 cents on the dollar compared with white, non-Hispanic men in comparable positions. The gap is larger for women of color: African-American women make 62 cents on the dollar, American Indian women 57 cents, and Latinas, 54 cents.
“We have an obligation to figure out how to address that,” EEOC Commissioner
Burrows said recently the civil rights agency should continue to find a way to press for transparency to address persistent pay gaps in the workforce, even though its effort to collect employers’ data will stop after this year.
Burrows said both business groups and civil rights advocates criticized the new collection because of the way the data was collected. Business groups found it onerous and some worker advocates said because it wouldn’t be public nor provide granular data it may not be as useful as other collections. Companies aren’t doing enough to root out disparities, Burrows said.
“A lot of these cases we find by accident. Pay determination is hard to fix because it’s hard to find,” she said Nov. 7, speaking at the American Bar Association Labor & Employment Conference in New Orleans. “We get a lot of data through other cases. That’s not the right way to go about getting civil rights laws working in the workplace.”
The agency didn’t have the opportunity to review the findings of its pay collection before a decision was made to end the practice, Burrows, the lone Democrat on the five-member board, said at the ABA conference.
Since the Equal Pay Act was passed in 1963, the pay gap has been cut in half for women compared with men, but Burrows said that’s not enough progress over several decades, especially given that women are graduating with post-secondary degrees at higher rates than men. “It’s actually a bigger gap than you think,” she said.
Transparency Key to Closing Gap
Pay transparency is often cited as a way to address gaps. European countries, including the U.K., France, Germany, and Spain have enacted or introduced legal measures related to gap reporting at a company-wide level. A recent study from Littler Mendelson said the vast majority of European employers, roughly 85 percent, are taking steps to address the issue, up from 80 percent the previous year. In the U.S., 63 percent said they are taking action to address pay equity.
The U.S. pay collection required by the EEOC will only be in place for a year, but academics and employment attorneys have said that the tool wouldn’t be as effective as the public methods used by the European countries. This is particularly true for the models that require public posting of pay data. The U.S. effort won’t be public.
Shareholder activists have pushed companies to disclose pay data, and many companies have been doing their own internal audits, said Erin Connell, a partner with Orrick, Herrington & Sutcliffe in San Francisco. She pointed to
The push for public pay transparency, like the U.K.'s system, is a way to pressure companies, said Anne Shaver, an attorney with Lieff, Cabraser, Heimann & Bernstein in San Francisco. She said she’s skeptical of companies analyzing themselves without accountability. A bill was proposed in California that mirrors the federal attempt to file pay data along with racial and gender breakdown. Other states could follow, if the measure passes, she said.
Transparency works, advocates said, beyond raw pay. Shaver said companies are forced to reckon with how they promote women to get them into higher pay levels as a result of wage reporting.
Maranda Rosenthal, an attorney with
There’s an aspect to “public shaming” that could incentivize employers to change, said Olamide Adetunji, an attorney for the Service Employees International Union in Washington.
“This is a starting point and employees have to start doing the work ... following through and making good faith efforts,” Adetunji said.