Employers Won the Pay-Data Battle but May Lose the War

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By Jacquie Lee

The EEOC’s most recent attempt to collect wide-scale pay data stalled, and if the agency doesn’t draft an alternative, local governments may take up the equal pay cause themselves.

The Office of Management and Budget Aug. 29 halted proposed changes to the EEO-1 form that would have required certain businesses to report pay data to the federal government. Now, states could start filling the pay-reporting gap themselves, because “lawmakers recognize constituents care about it,” Emily Martin, general counsel and vice president for workplace justice at the National Women’s Law Center, told Bloomberg BNA.

“I suspect that in the wake of this stay we will see increased state and possibly local legislative attention around salary reporting,” Martin said.

The Equal Employment Opportunity Commission hasn’t thrown out national pay data reporting completely. The commission is reviewing its next steps, Victoria A. Lipnic (R), acting chair of the EEOC, told Bloomberg BNA.

“I will work with Commissioners, OMB, Congress and stakeholders to determine the appropriate path forward,” Lipnic said. The message from the OMB’s action is that the burdens on business and the usefulness of the information to be collected were not properly taken into account, she said. “Whatever actions the EEOC takes next will do so,” Lipnic said.

Almost all states already have their own equal pay laws, but more and more are starting to require employers to report salary data to the government. Minnesota requires all public jurisdictions, such as cities, counties, and school districts, to submit reports detailing how much men and women are paid for comparable jobs; however, pay data by race and ethnicity is not included in the reporting mandates.

A January executive order by New York Gov. Andrew Cuomo (D) requires state contractors to report “the job title and salary of each employee of a contractor performing work on a state contract.” New Mexico has had a similar executive order on the books since 2010. It also requires state contractors to report pay data to the state government as a condition of gaining a state contract.

A California bill would require employers with 500 or more employees to collect wage information and submit it to California’s Secretary of State office, which would publish the data on its website.

Localized pay data laws would be “a huge headache for multi-state employers,” David Cohen, president of DCI Consulting Group Inc. in Washington, told Bloomberg BNA. That’s because businesses would have to comply with a variety of standards across different states or cities. Logistically, Cohen wonders, “Did we win the battle but lose the war?”

Employer Headaches Nothing New

Businesses have had to deal with overlapping requirements before, and local EEO-1 pay forms would be no exception, Lawrence Lorber, an attorney at Seyfarth Shaw LLP and a member of the equal employment opportunity committee for the U.S Chamber of Commerce, told Bloomberg BNA.

“They would be in the same fix they are right now in terms of overlapping and differing requirements,” Lorber said.

Members of the labor policy committee at the Chamber haven’t heard rumblings of concern about local pay data reporting, Randel Johnson, senior vice president of labor, immigration and employee benefits at the Chamber, said.

“States could have done that any time,” Johnson said of creating their own reporting requirements.

But the NWLC’s Martin said the amount of attention the revised EEO-1 form got this time around could give more momentum to states considering local EEO-1 forms.

“I wouldn’t be surprised if we see states and localities stepping into the breach that the federal government has created,” Martin said. “We’re also seeing efforts in general to strengthen state and local pay discrimination laws. I predict in these next few years we will also see more effort to increase pay transparency.”

Similar to what states have done with pay equity laws, if federal pay data reporting is pulled completely for good, “states will propose and pass state EEO-1 pay forms,” Cohen of DCI said.

Possibility of Federal Pay Data Uncertain

“I would assume multi-state employers would want a one-stop shop to fill out forms and cover their facilities in each state,” Lorber said.

Lorber hasn’t ruled out the possibility of the EEOC readdressing the issue of federal pay reporting, but he said it’s unlikely.

However, one attorney wonders if data collection is the best way to fight wage inequality.

“I think too much of the talk is about how can we make the form better, but we need to have a discussion that’s bigger than that,” Michael Eastman, vice president of policy and assistant general counsel of the Center for Workplace Compliance in Washington, said.

Employers should be doing their own self-audits, Eastman said. The EEOC’s stalled EEO-1 form may motivate businesses to conduct “robust” self-audits, he said, but “we’re pretty skeptical that summary pay data can accurately capture information that can be used to direct enforcement.”

The future of pay equity may be in the Equal Pay Act or similar legislation, Eastman said. “A form may not be the answer.”

To contact the reporter on this story: Jacquie Lee at jlee1@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Chris Opfer at copfer@bna.com

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