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Employment Practices: EEOC Takes On Gender Pay Gap with New Proposed Rule


Employment Practices EEOC Takes On Gender Pay Gap with New Proposed RuleLast month, the Obama Administration called for the Equal Employment Opportunity Commission (EEOC) to begin gathering data from federal contractors and other employers with 100 or more workers on pay based on gender, race and ethnicity. The data will be used to identify employers that may be engaging in pay discrimination so that the EEOC can target its enforcement resources where problems may be likeliest to exist. The plan, which will be open to public comment, won’t require legislative approval.

Federal law has prohibited pay discrimination since 1963. But in the United States, women on average earn 79 cents for every dollar paid to men. The gap widens by race, with African-American women earning 60 cents and Hispanic earning 55 cents to every Caucasian man’s dollar.

Here’s how the new rule would work? Companies would report the salary data on a form they submit annually to the EEOC. On the updated form, employers would have to identify the race and gender of each employee and report their total W-2 earnings for a 12-month period, including tips, taxable benefits and bonuses.

EEOC officials would not publicly name employers or employees, according to Jenny Yang, chairwoman of the agency, which published the proposed rule with the Department of Labor. However, if the agency files a discrimination lawsuit as a result of the findings, companies would appear in public record.

The EEOC currently collects demographic information annually about companies’ workforces, including data on the race and gender of employees. Ms. Yang said she expects the administrative burden of gathering compensation data to be relatively light, since employers will essentially be adding a few columns to the report they already file.

Statisticians and economists note, however, that analyzing wage disparities is a complex undertaking, and that aggregating data about many occupations is particularly tricky. “You can’t compare apples and oranges in the same group and draw meaningful conclusions,” said David Cohen, president of DCI Consulting Group, a Washington, D.C., firm that conducts pay-equity analyses for companies. “You’re going to get too many false positives and too many false negatives.”

Moreover, business groups immediately condemned the Administration’s move, blasting the policy as a government overreach into how pay is set in the private sector. Randy Johnson, senior vice president of Labor, Immigration, and Employee Benefits for the U.S. Chamber of Commerce, said that, though the organization supports equal pay for equal work, the new rule “would place unnecessary and onerous burdens on employers while providing no meaningful insight.”

Kelly Kolb, a vice president of the Retail Industry Leaders Association, said the information would be difficult to gather and could become “attractive fodder for those intent to mislead.”

What do you think about this new proposed EEOC rule? Is this an overreach by the government? Would the information gathered realistically tell the gender gap story? Let us know in the blog comment area below.

Axis Insurance Services specializes in Employment Practices Liability Insurance (EPLI), providing comprehensive, competitively priced policies to a broad spectrum of businesses. If would like to know about how we can help you secure protection against employment-related issues such as discrimination, harassment, wrongful termination and other claims, give us a call at (877) 787-5258.

 

Sources: Wall Street Journal, Washington Post, EEOC

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Blogged on: February 10, 2016 by Mike Smith
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