By Fabiana Cohen
In a federal lawsuit filed in November, advocacy groups contend that the Trump administration illegally halted pay data collection intended to address the growing disparities in the wage gap. The National Women’s Law Center and the Labor Council for Latin American Advancement sued the Office of Management and Budget and the U.S. Equal Employment Opportunity Commission, among others, for their decision to block an Obama-era measure that would have required companies with 100 or more workers to report earnings data for employees by sex, race, ethnicity and job category.
Although Title VII of the Civil Rights Act has long required employers to keep records relevant to the determination of whether unlawful employment practices have occurred, under the Obama administration, employee pay data was added to the federal record-keeping requirements. The purpose of this addition was to enable the EEOC to better enforce federal laws prohibiting discrimination and to increase incentives for employers to voluntarily comply with laws prohibiting pay discrimination. Accordingly, on Sept. 29, 2016, after a robust process that invited commentary from the public and prompted several rounds of revisions in response to employers’ concerns, the EEOC approved changes to a longstanding employer survey known as the EEO-1.
Specifically, the revisions to the EEO-1 required employers to add W-2 earnings data for employees by sex, race, ethnicity and job category beginning in March 2018. This meant that employers would need to categorize the number of employees retained in each of 12 different pay scales. For example, an employer would need to state that it employs three Hispanic women as professionals in the highest pay scale as part of its revised EEO-1 form. According to the EEOC, the collection of pay data would “improve the EEOC’s ability to efficiently and effectively structure its investigation of pay discrimination charges.”
Nearly a year after the EEOC approved the revised EEO-1, the Trump administration directed the EEOC to halt implementation of the revised form. The directive, memorialized in a two-page memorandum to the acting chair of the EEOC, identifies concerns regarding the data’s lack of practical utility, the burdensome nature of the collection process and the potential for privacy and confidentiality issues.
In the lawsuit filed last week, plaintiffs argue that the Office of Management and Budget has not identified changing relevant circumstances or erroneous burden estimates that would justify review or modification of the approved measure pursuant to 5 C.F.R. Section1320.12(h)(2)(i). The suit challenges the Trump administration’s authority to halt the collection of pay data, arguing that the Office of Management and Budget has overstepped its legal authority by barring an already approved collection process. In doing so, the plaintiffs seek declaratory relief as to the both the boundaries of the administration’s power and its directive regarding the revised EEO-1. Most significantly, the plaintiffs are seeking reinstatement of the revised form.
The importance of the revised EEO-1 extends far beyond institutionalizing valuable data collection processes in the workforce. The revised form would have enabled private litigants with legitimate pay discrimination claims to rely on conclusive data to challenge such discrimination. In addition, such data is necessary to identify and address wholesale trends of compensation discrimination that cannot otherwise be identified. In the absence of data of this kind, employees are left with little recourse to pursue pay discrimination claims and employers are given little incentive to voluntarily comply with federal laws prohibiting pay discrimination.
The result is a system where those marginalized and most likely to experience discrimination in the workplace—women and ethnic and racial minorities—continue to suffer silently without much recourse to address legitimate grievances. The EEOC’s own admission that including employee pay data in recordkeeping would be necessary to fulfill its obligation to enforce Title VII and other anti-discrimination laws demonstrates the real need for regulations of this kind.
As the lawsuit highlights, women working full time are generally paid 80 cents for every dollar paid to their male counterpart and the disparity is even greater when comparing women of color to white men. African American women make 63 cents, Native American women make 57 cents and Latin American women make 54 cents for every dollar paid to white men working full-time. In a lifetime, African American working women stand to lose $877,480 and Latinas, more than $1 million. As such, laws that seek to identify and address these wage gaps, especially ones that have undergone robust deliberation processes and endured public scrutiny should not be dismissed lightly.
Pay data collection is necessary to tackle insidious pay discrimination. Without it minorities will continue to suffer the consequences of often unintended (but in some cases deliberate) sexism and racism that continue to exist in the workplace.
Reprinted with permission from the December 8, 2017, issue of the Daily Business Review. © 2017 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or [email protected]