Are companies discriminating against women and minorities when it comes to paying equal wages for equal work? If so, just how big is the wage gap, and how widespread is it?
The answer is that we don’t really know. The federal government has never consistently collected the data needed to accurately calculate wage differences among different demographic groups that perform the same work. That’s why the Equal Employment Opportunity Commission (EEOC) has proposed regulations to collect wage data in order to identify possible wage discrimination in America.
As most employers know, Title VII of the Civil Rights Act of 1964 makes it illegal to discriminate against employees based on sex, race, color, national origin, and religion. Many companies that discriminate may be inadvertently paying male and female workers unequally for a variety of reasons; although, some employers may have an unwritten policy or corporate culture that promotes discrimination in pay.
In the past, however, the only available statistics to calculate possible discriminatory wage practices were from U.S. Census data reports of median wages broken down by gender, race, and ethnicity. The problem with these statistics is that they don’t take life choices into account, such as differences in chosen career fields, total hours worked, and other variable factors.
In response to President Obama’s National Equal Pay Task Force, the EEOC has proposed new employer reporting requirements that will help the government identify illegal wage discrimination in the workplace.
Since 1966, the EEOC has required all employers with more than 100 employees (50 employees for federal contractors) to submit data about the number of individuals they employ broken down by job function, race, ethnicity, and sex. The proposed new reporting standard will also require all employers with more than 100 employees to report related pay data based on wages reported on W-2 tax forms. The requirement will not apply to federal contractors with 50-99 employees.
According to Secretary of Labor Thomas Perez: “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. 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 Office of Management and Budget (OMB) will need to approve the EEOC’s plans before it can begin collecting the data. If the OMB approves the plan, companies will need to begin reporting data in 2017.
Any employer that does not already maintain wage records categorized by job function, gender, race, and ethnicity should begin collecting records now. Even if the government does not approve the new data collection standards, companies will be able to use the data internally to correct any inadvertent wage discrimination among people who perform equal work.
For more information about EEOC reporting requirements and other employment law matters, contact Beth Slagle or any other Meyer, Unkovic & Scott attorney with whom you have worked.