The Equal Opportunity Employment Commission (EEOC) said it will beef up investigations into pay discrimination with the collection of summary pay data from employers beginning in 2018.
“More than 50 years after pay discrimination became illegal it remains a persistent problem for too many 
Americans,” said EEOC Chairperson Jenny R. Yang. “Collecting pay data is a significant step forward in addressing discriminatory pay practices. This information will assist employers in evaluating their pay practices to prevent pay discrimination and strengthen enforcement of our federal antidiscrimination laws.”
Background Information
Pay discrimination has been especially troublesome with regards to gender, racial, ethnic and age inequality. Employees are protected from pay discrimination under several federal laws, including:
- The Equal Pay Act (EPA) of 1963,
- Title VII of the Civil Rights Act of 1964,
- The Age Discrimination Act in Employment Act of 1967 (ADEA), and The American with Disabilities Act (ADA) of 1990, and their amendments.
The EPA requires that men and women be paid equally for work in the same establishment. The jobs don’t have to be identical, but they must be “substantially equal.” This is determined by the actual job — not job titles. For instance, the EPA provides that employers can’t pay unequal wages to men and women who perform jobs requiring substantially equal skill, effort and responsibility and are performed under similar working conditions within the same establishment.
The three other key laws in this area prohibit compensation discrimination on the basis of race, color, religion, sex, national origin, age or disability. Unlike the EPA, however, there’s no requirement under any of these acts for the claimant’s job to be substantially equal to one of a higher-paid person outside the protected class. Moreover, the claimant isn’t required to work in the same establishment.
Examples of Pay Discrimination
The EEOC points out that compensation discrimination may occur under these laws in a variety of manners. For example:
- An employer may pay an employee with a disability less than similarly situated employees without disabilities. Liability can occur when the employer’s explanation, if any, doesn’t sufficiently account for the difference.
- Compensation for jobs for women or African-Americans of either gender are set predominately below that suggested by the employer’s job evaluation study, while the pay for jobs predominately held by men or Caucasians of either gender is consistent with the suggested levels.
- An employer maintains a neutral compensation policy or practice that hurts employees in a protected class and can’t be justified as job-related and consistent with business necessity. For instance, if an employer provides extra compensation to an employee who is a male head of household, female employees may be adversely affected.
Note: It is unlawful to retaliate against an individual for opposing employment practices that discriminate based on compensation or for filing a discrimination charge, testifying or participating in any way in an investigation, proceeding or litigation under any federal legislation described above.
New Data Requirements
Beginning in March 2018, the EEOC will collect summary employee pay data from certain employers. The new data will be used to bolster investigations of possible pay discrimination, which remains a contributing factor to persistent wage gaps.
Specifically, the summary pay data will be added to the annual Employer Information Report (EEO-1) that is coordinated with the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP). That office collects data from federal contractors and subcontractors.
“Collecting data is a critical step in delivering on the promise of equal pay,” noted U.S. Secretary of Labor Thomas E. Perez. “Better data will not only help enforcement agencies do their work, but it helps employers to evaluate their own pay practices to prevent pay discrimination in their workplaces.”
The EEOC intends to provide support to employers as they transition to the additional reporting. The first deadline for 2017 reports is March 31, 2018, giving employers about a year-and-a-half to prepare.
Who Must Report?
Private employers, including federal contractors and subcontractors with 100 or more employees, must submit the additional data. These employers are prohibited from reporting individual compensation or any personal information, such as Social Security numbers.
Federal contractors and subcontractors with 50 to 99 employees won’t be required to meet the requirement, but they must still report employees by job category as well as by sex, ethnicity and race. Employers with 99 or fewer employees and federal contractors and subcontractors with 49 or fewer employees still won’t have to provide the additional information.
Be aware that the EEOC doesn’t disclose any EEO-1 data for a specific employer. It only publishes large-scale aggregated data in a way that fully protects employer confidentiality and employee privacy. The OFCCP holds EEO-1 data for federal contractors and subcontractors confidential as dictated by the Freedom of Information Act and Trade Secrets Act.
Further Information
Rely on your payroll provider for the necessary assistance in this area.
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Restaurant Served in Pay Discrimination Case The Equal Opportunity Employment Commission (EEOC) announced that a Steamboat Springs, Colorado, restaurant has agreed to pay $50,000 to resolve race and national origin discrimination charges, including charges of wage theft. The EEOC had issued a finding of reasonable cause to believe the employer had violated Title VII of the Civil Rights Act of 1964 by engaging in a pattern or practice of unlawful terms and conditions. The restaurant generally hired only immigrants from Mexico and other Latin American countries. Employees told the EEOC that they frequently had to request to be paid. Paychecks were handed out infrequently, usually once every six or seven weeks, and sometimes workers had to wait three months. One employee reported not being paid for over a year. When employees were finally paid, the restaurant reduced pay by deducting unsubstantiated amounts for tips. Also, the restaurant told employees they were withholding tax, but failed to do so. Finally, employees were never paid for overtime work. The restaurant has entered into a five-year conciliation agreement. It’s required to pay $50,000 in back pay and compensatory and punitive damages to eight current and former employees. |