New Focus on Equal Pay: EEOC and DOL Propose to Collect Pay Information as Part of EEO-1 Report

By: Melanie M. Dunajeski, Drewry Simmons Vornehm, LLP

The EEOC 2013-2016 Strategic Enforcement Plan prioritizes enforcement of equal pay laws, such as the now fifty year old Equal Pay Act and anti-discrimination provisions of Title VII of the Civil Rights Act of 1964.  While expert opinions are widely divergent as to whether pay inequities as the result of impermissible bias exist, federal government efforts to aggregate more pay data directly from employers are  increasing. The EEOC, DOL and OFCCP have proposed a rule that will require employers of 100 or more employees to report wages from W-2 earnings and detailing hours worked, sex, race and ethnicity of employees associated with the wages as part of the existing EEO-1 annual report of an employer, creating a new flow of pay information to the EEOC on pay practices within individual workforces.  This information was previously not available prior to an investigation sparked by the filing of a complaint or charge against an employer.  This new flow of information may allow regulators to examine an employer’s pay practices for possible discriminatory bias before any complaint is lodged, and vastly broaden the tools available to prosecute employers. However, as all employers know, the considerations going into pay practices span many legitimate areas of consideration, from educational background, to experience, to attendance and performance issues—none of which would be reflected in the raw numbers that would be reported on the new EEO-1.  The proposed rule is currently open for public comment, but could become effective as soon as September 30, 2017.  In the interim—and knowing that the focus on equal pay issues is not likely to abate in the near future—employers should take a close look at their pay practices through the same lens that the regulators will use: stack up that raw data and see if the realities of your pay practices will give the appearance that pay bias may exist.  If they do, it is time to dig deeper and see why the numbers look the way that they do, and proactively take corrective action if it is indicated.