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Obama Administration Seeks to Expand Employer Reporting Requirements on Gender and Pay

Published by on February 6, 2016

New reporting requirements issued by the Obama Administration will require employers to track gender and pay data for the EEOC, DOL and OFCCP.

Expanding its workforce policy efforts beyond a focus solely on federal government contractors, the Obama Administration announced in January its intention to implement new rules requiring all U.S. employers with more than 100 employees to provide new data to the U.S. Equal Employment Opportunity Commission (EEOC), in an expansion of the EEOC’s existing reporting process.

Specifically, the administration proposed new rules that would require these employers to report worker pay and present the information organized by race, gender and ethnicity. The stated objective of the change would be to monitor and ensure ongoing progress aimed at eliminating the ‘wage gap’ between men and women in American workplaces.

The new information would be collected on the same EEO-1 Employer Information Report that employers presently use to provide mandated data to the EEOC.

The EEOC and the U.S. Department of Labor (DOL) are working jointly on the new rule, which would expand on a policy already established for federal contractors two years ago through an executive order. This expansion of the policy to cover private-sector employers will be published in September 2016, and is intended to require applicable employers to begin delivering the expanded reports beginning with the September 2017 reporting period.

The newly collected data would be used by the EEOC, DOL and OFCCP to provide insights that can lead to or inform investigations, and enhance the federal agencies’ ability to identify and penalize companies for engaging in pay discrimination on the basis of gender.

The proposed rule changes are available for inspection on the Federal Register website and will be officially published in the Federal Register on February 1, 2016. Members of the public will have 60 days (until April 1, 2016), to submit comments. After that point, the rule will be finalized for implementation.

Welter Insight:

Employers should begin preparing to collect and report data that digs deeper into their employment practices, to now include employee pay as a point of comparison against demographic data.

It is important to understand that this action sets the stage for the EEOC, OFCCP and/or DOL to pursue action against an employer if the data suggests that the employer’s policies have a disparate impact on employees because of their sex or race, even if no direct evidence of disparate treatment discrimination exists.

Therefore, employers should use this opportunity to consider whether to perform an internal assessment of pay equity by gender and other factors, in order to proactively address points of concern internally prior to making themselves potential targets of future federal investigations or enforcement.

Start now — it can take a significant amount of time to identify and correct any pay disparities that may exist, even those that have arisen inadvertently.

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