EEOC Seeks to Require Equal Pay Data from Employers

Employment and Labor Update

In keeping with the Obama Administration’s focus on equal pay issues, the Equal Employment Opportunity Commission (EEOC) has announced a plan to collect information from employers about employee pay as part of the Employer Information Report (EEO-1). Employers subject to EEO-1 requirements currently are required to disclose to the federal government information about their workforce profiles by job category, gender, ethnicity and race. The EEO-1 reporting requirements have never required disclosure of information about worker pay.

The proposed changes to the EEO-1 report, which were announced on the seventh anniversary of the Lilly Ledbetter Fair Pay Act, would do just that. Specifically, the EEOC’s proposed changes will add aggregate data on pay ranges and hours worked to the EEO-1 reporting requirements for employers subject to EEO-1 reporting requirements with more than 100 employees. As set forth in the EEOC’s proposal: “[T]he revised EEO-1 will collect aggregate W-2 data in 12 pay bands for the 10 EEO-1 job categories. Employers will simply count and report the number of employees in each pay band. For example, a filer will report on the EEO-1 that it employs three African American women as professionals in the highest pay band.” The first EEO-1 to require the new data under this proposal would be the September 2017 report.

According to EEOC Chair Jenny R. Yang, the proposed changes to the EEO-1 are intended to help identify and eradicate pay discrimination. “More than 50 years after pay discrimination became illegal it remains a persistent problem for too many Americans,” she said in the EEOC’s press release announcing the proposal. “Collecting pay data is a significant step forward in addressing discriminatory pay practices.” Yang stated in the press release that “[t]his information will assist employers in evaluating their pay practices to prevent pay discrimination.” Yang noted in the press release that it will also aid enforcement efforts, acknowledging that the new requirements will “strengthen enforcement of our federal anti-discrimination laws.”

United States Secretary of Labor Thomas E. Perez elaborated on the intended aim of the proposal, stating: “We can’t know what we don’t know. We can’t deliver on the promise of equal pay unless we have the best, most comprehensive information about what people earn.” Secretary Perez further explained: “We expect that reporting this data will help employers to evaluate their own pay practices to prevent pay discrimination in their workplaces. The data collection also gives the Labor Department a more powerful tool to do its enforcement work, to ensure that federal contractors comply with fair pay laws and to root out discrimination where it does exist.”

The proposed change was published in the Federal Register on February 1, 2016. Members of the public have 60 days from that date—until April 1, 2016—to submit comments.

The EEOC’s proposed change to the EEO-1 report underscores the Obama Administration’s continuing focus on equal pay issues. Given the importance the Obama Administration has placed on equal pay—including through the Fair Pay Act, which was President Obama’s first piece of legislation while in the White House—it is anticipated that the EEOC and other federal agencies will continue to give heightened scrutiny to companies’ pay practices and any perceived disparities in pay. Companies therefore may wish to consider proactively examining their pay policies and practices. Companies that will be affected by the new EEO-1 reporting requirements may also wish to consider submitting comments on the EEOC’s proposal.

If you have any questions regarding this Sidley Update, please contact the Sidley lawyer with whom you usually work, or

Brian J. Gold

Partner

bgold@sidley.com

+1 312 853 2064 Jennifer B. Zargarof

Partner

jzargarof@sidley.com

+1 213 896 6058

Sidley Employment and Labor Practice

To receive Sidley Updates, please subscribe at www.sidley.com/subscribe.

Sidley Austin provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship.

Attorney Advertising - For purposes of compliance with New York State Bar rules, our headquarters are Sidley Austin LLP, 787 Seventh Avenue, New York, NY 10019, 212.839.5300; One South Dearborn, Chicago, IL 60603, 312.853.7000; and 1501 K Street, N.W., Washington, D.C. 20005, 202.736.8000.