Obama-era rule to collect worker pay data is headed for the chopping block
The U.S. Equal Employment Opportunity Commission said Wednesday it plans to shelve an Obama-era rule to collect pay data in what Democratic lawmakers and advocates said was a setback to efforts to achieve equal pay for women and people of color.
The decision — yet another twist in the years-long fight to get employers to share more data about how they pay their employees — marks another win for the business community and the Trump administration’s deregulation agenda.
The EEOC is charged with enforcing federal anti-discrimination laws related to job applicants and employees.
In the notice, the EEOC said the cost to employers of collecting the confidential data was much higher than originally estimated and had “unproven utility.”
Under the Obama-era rule, the EEOC asked all employers with more than 100 employees to supply additional data, breaking down worker pay by race and gender across 10 broad job categories.
But the EEOC wrote in its notice that under the Paperwork Reduction Act, it is required to balance the usefulness of the data collection with the burden on employers. “At this point in time, the unproven utility to its enforcement program of the pay data ... is far outweighed by the burden imposed on employers,” the EEOC said.
Democratic lawmakers are expected to question EEOC Chair Janet Dhillon about the decision when she appears before a subcommittee of the House Committee on Education and Labor next week.
Rep. Bobby Scott, D-Va., who chairs the Committee, said in a statement that “this decision to eliminate the reporting of pay data is a step backwards in the fight for equal pay for equal work.”
The EEOC, in an email from spokeswoman Kimberly Smith-Brown, said Ms. Dhillon is “committed to exploring collecting relevant information that will assist the EEOC in its enforcement of equal pay laws.”
Asked how the decision fit with a response by Ms. Dhillon in her confirmation testimony, where she affirmed she would make finalizing a pay data collection a priority, the spokeswoman said “the decision is perfectly in line with the Chair’s previous testimony.”
“As required by federal law, any such collection must be done in a way that balances the burden on employers with the utility of the information to the EEOC’s mission,” Ms. Smith-Brown said.
Employers will still have to submit their pay data for 2017 and 2018 by a Sept. 30 deadline in response to a court order.
The Office of Management and Budget had frozen the data collection in August 2017.
But equal pay advocates expressed concern that the EEOC would do little with the data that is being collected this year, as well as about the signal the EEOC’s decision could send to employers about its commitment to exposing unequal pay.
“I think it sends a message that we don’t take this seriously,” said Jocelyn Frye, a senior fellow at the Center for American Progress who was director of policy and special projects for Michelle Obama during the Obama administration. “The ironic thing is that this proposal is going very much against the broader trend, and the broader trend is towards increased transparency.”
Emily Martin, a vice president at the National Women’s Law Center, which filed a lawsuit to preserve the rule, said “our job is to make sure they don’t take this data, stick it in a drawer and never look at it again.” She worries the EEOC is saying “we had to collect this but we don’t have to look at it and we don’t have to create the analysis” that would help with enforcement, she said.
Others also said it’s unclear if or how the Trump administration will use the data collected this year.
Marc Freedman, vice president for workplace policy at the U.S. Chamber of Commerce, which opposed the new rule, said “there’s no reason to think EEOC is less serious about pursuing pay discrimination merely because they’re now abandoning a form that wasn’t going to help them in the first place. When you look at the data that was going to be submitted, the job categories and pay bands were not reflective of actual positions.”
James Paretti, an attorney with Littler Mendelson who was a former chief of staff for EEOC Commissioner Victoria Lipnic, who voted against the rule, offered the example of a hospital where professions ranging from doctors to dietitians to accountants based in different geographic localities would be put in the same category. “You’re not comparing apples and apples. You’re comparing apples to oranges.”
Supporters of the pay data collection say such concerns obscure the intent of the rule. “This data is not meant to provide definitive proof that pay discrimination is happening; it’s meant to be a system that provides some red flags,” said NWLC’s Ms. Martin. Employers would be compared to their peers, and if differences in race and gender wage gaps are found, “that’s a signal that maybe it’s time to look a little more closely.”
Pay data is of particular value, said Ms. Frye, because it is so hard to access. The EEOC is driven by employee complaints, she said, and the hope was the agency could use the data to more proactively spot warning signs that might be worth investigating.
Deborah Vagins, senior vice president of public policy and research at the American Association of University Women, who was formerly the chief of staff for EEOC Commissioner Charlotte Burrows, said the decision echoes the business community’s complaints. “I don’t know how you can assert there’s no utility if you haven’t seen the data,” she said.
Proponents of the data collection had hoped it would also make employers more accountable for any wage gaps because they would have to report to an authority.
“That incentive for employers to do an internal analysis and fix problems that they find is much stronger when an employer is handing over this pay data [to the government] that before was completely secret unless someone sued them,” said NWLC’s Ms. Martin. “A lot of employers don’t want to know they have a problem. ... but if I look to see it’s there, then I’m really on the hook to fix it.”
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