In his 2015 State of the Union speech, President Barack Obama pressed Congress to “pass a law that makes sure a woman is paid the same as a man for doing the same work.” Although the president’s plea for the passage of stronger pay discrimination laws is unlikely to sway the Republican-controlled House and Senate, the federal enforcement agencies have been working behind the scenes to bolster existing laws.
In September, the Office of Federal Contract Compliance Programs (OFCCP) drew a great deal of attention and scrutiny with the introduction of its new plan to collect compensation data from federal contractors. All the while, the Equal Employment Opportunity Commission (EEOC) has been stealthily moving forward with its own plans to collect pay data as part of its annual EEO-1 Survey.
Back in 2010, the White House established the National Equal Pay Enforcement Task Force, bringing together professionals from the EEOC, the U.S. Departments of Justice (DOJ) and Labor (DOL), and the Office of Personal Management (OPM), to promote efficiency and efficacy in enforcement of existing pay discrimination laws. The task force identified the lack of access to private-sector wage data as a major impediment and invited the EEOC and OFCCP to identify ways to systematically collect private-sector wage data that would be useful to enforcement without creating unnecessary burdens on employers.
The EEOC called on the National Academy of Sciences (NAS) to review the methods for measuring and collecting pay information. In 2012, the NAS panel released the results of its two-year study. The panel found that the enforcement agencies had no “clearly articulated vision of how data on wages would be used in the conduct of these enforcement responsibilities” and found “no evidence of a clearly articulated plan for using the earnings data if collected.” The NAS also pointed out specific concerns that would need to be resolved before the agencies could collect compensation data from employers and made a series of recommendations to assist the agencies with the process.
EEOC pilot study
The EEOC has been unusually tight-lipped since the study’s release, leaving many employers wondering if it has given up on collecting compensation data. Yet publicly available records indicate the agency has been quietly following the NAS study, including its recommendation that the EEOC coordinate with other enforcement agencies and collectively determine how employer pay data should be collected and used.
Following the panel’s recommendations, the EEOC has hired a consultant to conduct an independent pay pilot study and assist with nearly every facet of the project. According to the terms of the solicitation:
- The EEOC plans to revise its existing EEO-1, EEO-4, and EEO-5 reports to collect summary pay data from employers.
- The agency is pursuing the NAS’s recommendation that it collect data on “rate of pay” but has asked the consultant to conduct a detailed statistical analysis and recommend which test it should use when evaluating pay disparities. Once the statistical analysis is complete, the consultant will develop the model for collecting compensation data and obtain EEOC feedback before conducting the pilot.
- The EEOC will provide the consultant with simulated compensation data to run a pilot that will also incorporate the consultant’s recommended statistical measures for pay disparity tests in five EEO-1 industries.
- The consultant will provide the EEOC with an estimate of the burden and the processing cost to the agency and respondents for each of the revised EEO surveys.
This multiphased study may take as long as 18 months to complete. Since the EEOC will need to undergo a rulemaking before requiring employers to provide compensation information as part of its annual EEO survey, it will be a number of years before employers will need to provide summary compensation data to the EEOC. Employers that will be subject to the EEOC’s future compensation collection programs should take full advantage of this lead time and ensure their compensation practices and pay differences are lawful and defensible.