In one of a continuing series of actions moving away from the prior administration’s labor law policies, President Trump has canceled a requirement that employers provide the federal government additional gender, race, and ethnicity information about their compensation practices.
The Obama Administration had approved a new policy on September 29, 2016, requiring employers with 100 or more employees, and federal contractors with 50 or more employees, to collect and report data to the federal Equal Employment Opportunity Commission (EEOC) about how much they pay workers of different genders, races, and ethnic groups. The rule, which never took effect, was announced as seeking to remedy perceived pay disparities and pay discrimination in the workplace.
President Trump agreed with business leaders and elected Republican officials who had complained that the new requirement would be onerous and expensive for employers to comply with.
Ivanka Trump, who is serving as an unpaid adviser to her father in the White House, said in a statement that the proposed new Obama reporting requirement “would not yield the intended results. We look forward to continuing to work with EEOC, OMB, Congress and all relevant stakeholders on robust policies aimed at eliminating the gender wage gap.”
The Office of Management and Budget (OMB), in a memorandum to the EEOC dated August 29, stated that it was “concerned that some aspects of the revised collection of information lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.”
The expanded reports, called EEO-1s, would have been due on March 31, and were expected to cover about 60,000 employers and 63 million employees throughout the United States. The updated form would have grouped workers in ten categories, from service employees to managers, to executives. It would have also aggregated them into 12 wage bands, from about $19,000 a year to $208,000 and higher.
The EEOC had projected employers’ compliance costs to be about $54-million and to require about 1.9 million hours of staffing time. But a survey conducted by the U.S. Chamber of Commerce estimated the employers’ costs at $400-million and about 8 million hours.
Republican Senators Virginia Foxx of North Carolina and Bradley Byrne of Alabama issued a joint statement expressing relief at the OMB’s decision to pause and take a fresh look at the expanded data collection policy. The Obama-era changes “simply didn’t make sense” and didn’t actually combat pay discrimination, they said. “That’s why we were concerned when the EEOC spent its time and resources creating a convoluted reporting regime instead of addressing an unacceptable backlog of unresolved discrimination charges.”
Fatima Goss Graves, president and chief executive of the National Women’s Law Center, said the policy about-face contradicts President Trump’s claim that he wants prosperity for every American. “It’s not enough to say ‘equal pay,’ ” Grave said. “It matters what policies you stand behind.”
Proponents of the Obama proposal had defended it on the grounds that it would have created an evidence-based foundation on which to address pay discrimination through federal legislation. Jenny R. Yang, an Obama appointee and former chairwoman of the EEOC, said when the rules were drafted that, “Having pay data in summary form will help us identify patterns that may warrant further investigation.”
The EEOC may continue to use the previously approved EEO-1 form to collect employers’ data on race/ethnicity and gender during the review and stay of the proposed new rule.
Acting EEOC Chair Victoria Lipnic cautioned that businesses are still bound by their previous reporting requirements, and that the agency is not softening its focus on pay discrimination. Component 1 of the EEO-1 forms is still in effect and employers must still file it by March 31, 2018. That component seeks demographic data on race, gender, and ethnicity by job category that employers have long been required to report.
Lipnic said that the OMB’s decision won’t do anything to lessen the EEOC’s commitment to fighting wage inequity. She noted the agency “has been in the business of doing this for 50 years” and has brought numerous such enforcement actions in recent years under both the Equal Pay Act and Title VII. “Our enforcement [will] go forward,” Lipnic said. “It’s a high-priority area for the commission to focus on.”
Ms. Lipnic, an Obama appointee, was named Acting Chair of the EEOC by President Trump on January 25, 2017.